Equity Holding Trust


An equity holding Trust is an especially complicated transaction, but it has its place as a superior transaction in many instances.  This is likely the one real estate transaction most investors won’t offer because of its many moving parts.

To put it simply:

The property is put into a trust and certain percentages of the beneficial interest are assigned to the parties in the transaction.   However in this transaction, even though the buyer gets full ownership rights, the deed does not convey.

At the time the property is refinanced, the seller and buyer will agree upon a sales price or they can choose to sell the home at its appraised value.   Property appreciation from the time the agreement began can then be split among the parties as originally agreed or given to one individual.

The benefits of this type of transaction are numerous:

  • Faster Sale
  • Larger Pool of Buyers
  • Seller doesn’t have to be a landlord
  • Easier “eviction” process if buyer stops paying
  • Flexibility
  • Possible share in property appreciation
  • Depending on the structure of the trust…No “due on sale” clause trigger