In this episode I want to talk about trusts and the due-on-sale clause. In my private coaching group, a lot of people ask if they should put a property into a trust to mitigate the due-on-sale provision. Here’s my take on it.
What We Cover:
- What is a trust – definition
- What is due-on-sale clause and its origins
- Cases in which due-on-sale clause might be violated
- The risks of putting a property into a trust
- What I prefer to do in terms of due-on-sale provision
- How to mitigate the risk if you have owner financing property
- Applying the substance over form doctrine in your deals
The due-on-sale provision is just not as mean and scary as it sounds. I’ve not found it to be a big risk factor in what we do. But I’m really against the deal structures that don’t make sense, so just keep things clean and simple.