Real Estate Crowdfunding (LA 862)

Transcript:

Steven Butala:                   Steve and Jill here.

Jill DeWit:                            Hello.

Steven Butala:                   Welcome to the Land Academy Show, entertaining land investment talk. I'm Steven Jack Butala.

Jill DeWit:                            I'm Jill DeWit, broadcasting from sunny Southern California.

Steven Butala:                   Today Jill and I talk about real estate crowd funding, and it's here to stay let me tell you. I love it.

Jill DeWit:                            I know.

Steven Butala:                   It's just, I love crowd funding in general. It opens up opportunity, where it wasn't before.

Jill DeWit:                            Is it just me or is it not like, I don't think ... It should be huge and celebrated, but I don't see it very often. Is it because there are not as many people out there, or are you going to share that when we get into the show, because I'm ...

Steven Butala:                   I just don't think it's caught on yet. I don't think it's even in the first inning.

Jill DeWit:                            That's even better.

Steven Butala:                   Yeah.

Jill DeWit:                            Well good, that's where I want to be.

Steven Butala:                   Right, me too. That's why we're doing this show.

Jill DeWit:                            Cool.

Steven Butala:                   I think it's, especially for real estate. We all know what crowd funding is.

Jill DeWit:                            Right.

Steven Butala:                   I think it's, in its current form, is really silly, but we'll talk about that in the show. Before we get into it, let's take a question posted by one of our members, on the landinvestors.com online community. It's free, and as you're listening please drop your questions into the comment section below.

Jill DeWit:                            Matt asks, Hello, I'm looking to purchase a parcel of land that was rolled into someone's mortgage for their primary residence. It has its own EPN from the property, with a home on it. Will I be able to purchase that? I could foresee the mortgage having some due on sale clause, or something if you sell part of the property, that was used as collateral for the loan.

Steven Butala:                   Yeah.

Jill DeWit:                            They still have the house and everything, so maybe they can be separated. Anyone have experience?

Steven Butala:                   The best way to ... Unfortunately it's probably not going to be good news. Deals like that are cross-collateralized, so ... We've all seen this. If there's a house and a vacant lot next door, and they're being sold together, and they're two EPNs, if you're lucky there are actually two EPNs. Banks love that, because you just kind of look, and buyers love it. It's like getting a free piece of property.

Jill DeWit:                            Right.

Steven Butala:                   Hopefully the owner of the property was smart enough to separate them out, but I really doubt it.

Jill DeWit:                            Sounds like so maybe they could be separated. It sounds like they didn't.

Steven Butala:                   Yeah.

Jill DeWit:                            Is there a chance that there is a lien on both? That's, I think, the question.

Steven Butala:                   Yeah, I think it's the same lien.

Jill DeWit:                            That's what I think is the problem.

Steven Butala:                   I think there's one lien.