“FLIPPING” WITH THE EHTrust™ STRUCTURE 

(Wholesale Acquisition, Rehabilitation, and Resale Using a Title-Holding Trust)

The EHTrust Transfer™ is a private, beneficiary-directed method for conveying real estate ownership benefits without publicly transferring title. Built on the Illinois-type land trust framework, the EHTrust™ vests legal and equitable title in a bonded third-party trustee while assigning beneficial interests among parties through private agreements.

This structure can support traditional acquisition-to-resale strategies while enhancing asset protection, preserving title integrity, and enabling flexible exit options. The EHTrust™ arrangement complies with federal due-on-sale protections under 12 USC §1701j-3 and does not involve a credit extension, formal assumption, or retail transfer. Instead, it leverages the temporary placement of property into trust and private reassignment of interest to achieve secure and private disposition of control and financial benefit.

The trust structure is also adaptable to resale scenarios that involve a party assuming possession or occupancy through a lease, while acquiring beneficial interest over time.

Strategic Application of the EHTrust™ for Flipping

“Flipping” refers to acquiring a property below market value for the purpose of resale at a profit. When conducted transparently and without fraudulent intent, flipping is legal and widely practiced. The EHTrust™ supports flipping through legally compliant structures that respect disclosure, protect against title disruption, and provide investors with tax and control advantages.

The recommended acquisition price for a property being flipped typically ranges between 65% and 75% of its After Repair Value (ARV), less all estimated repair and resale costs.

Example:

• ARV: $100,000
• Repairs: $20,000
• Resale costs: $5,000
• Carrying costs: $2,400
• Recommended max offer: $100,000 – $27,400 = $72,600 (preferably lower)

The EHTrust™ can be used in conjunction with any of the following flipping models:

Flip Strategy 1: Refinance and Appoint Occupant-Beneficiary

After renovating the property, refinance based on the improved value. Place the title into an EHTrust™ and assign beneficial interest to yourself as Investor Beneficiary. Then lease the property to a qualified occupant who enters a separate lease and may be assigned a beneficial interest with obligations to cover all carrying costs. The occupant receives agreed-upon homeownership benefits contractually, without requiring a deed or loan assumption.

You retain title control, participation in future appreciation, and offset opportunities through cash flow and debt reduction.

Flip Strategy 2: Sell As-Is at a Discount

If renovations are not feasible, sell the property as-is slightly below market value. The EHTrust™ can still be used to deliver control and value to a new investor or occupant with terms that facilitate acquisition and later conversion to full ownership.

Flip Strategy 3: Assign the Deal

Secure the property under a purchase agreement, then assign your interest to another investor for a fee. This assignment strategy allows for immediate gain without requiring financing or repairs. Use of an EHTrust™ can formalize this transfer and limit exposure by placing title in trust and assigning beneficial interest accordingly. In jurisdictions with assignment restrictions, clarify that you are assigning a contractual interest or position within the trust, not conveying real property title.

Flip Strategy 4: Leave Seller’s Loan in Place Temporarily

If the property has existing financing, retain the seller’s mortgage temporarily. Place the title into an EHTrust™ and allow a new occupant-beneficiary to assume occupancy via lease while the trust is administered. This structure facilitates exit options once the buyer qualifies for a loan, while all ownership benefits and obligations are transferred through the trust.

Flip Strategy 5: New Mortgage with Delayed Exit

Obtain a new mortgage and place the title into trust. Use the EHTrust™ to assign control and occupancy to a vetted party while exit financing is arranged. The trust structure allows full benefit transfer without triggering title transfer until a future close. The EHTrust™ may include a mandatory exit clause or non-renewal term to ensure possession reverts if financing is not secured by a fixed date. Lease and trust terms can be written to require move-out if financing is not obtained by a deadline.

Flip Strategy 6: Use Occupant Contribution to Fund Rehab

Identify a buyer or occupant who is willing to contribute funds toward rehab in exchange for beneficial interest and future participation in equity or resale proceeds. The EHTrust™ permits this party to be assigned beneficial interest with the contribution treated as a documented offset, refundable or credited upon exit per trust terms.

The structure allows a flexible split of appreciation and principal reduction while the original owner or investor retains direction rights. Offset contributions should be documented in an addendum to the Beneficiary Agreement for enforceability.

Flip Strategy 7: Joint Venture with Seller

Offer to rehab the property on the seller’s behalf. Title is placed in trust, and a new occupant is brought in to cover all expenses. At the trust’s termination, proceeds are shared between the seller, the investor, and the occupant based on pre-agreed splits. This structure works well for free-and-clear properties or sellers with equity who wish to participate without managing the property.

Flip Strategy 8: Build-to-Exit Through Deferred Transfer

Instead of assigning or wholesaling, consider using the EHTrust™ to control a property during rehab or occupancy while gradually preparing it for a clean retail sale. After taking title into the trust and assigning yourself as Investor Beneficiary, complete the repairs, then identify a qualified buyer. Allow the buyer to occupy the property under a lease agreement and a conditional Beneficiary Agreement that defines a future buyout.

This strategy offers a compliant pathway to seller-exit without recording a title transfer prematurely. It provides time to resolve seasoning issues, assist buyers in qualifying, and stage the property for resale. All parties’ obligations, offsets, and termination rights must be clearly defined in the trust documentation.

Important Notes

All obligations to pay mortgage, taxes, insurance, and maintenance should derive from the trust and Beneficiary Agreement—not from occupancy alone. Occupancy must be secured by separate lease agreements executed under trust direction. Offsets in favor of contributing beneficiaries must be clearly documented to preserve their enforceability.

The EHTrust™ model separates title from benefit and offers scalable, asset-protected flipping strategies across all deal types. Where original financing remains in place, it is strongly advised that the Settlor (original borrower) retain a nominal beneficiary interest to preserve Garn-St. Germain protections.

This summary is not legal advice. Consult qualified counsel before structuring any transaction.