Help a newbie sell or hold!!!

I purchased a hse 2 years ago at $237000 it is now worth $34500.
I don’t want to sell it but it is hard to rent it because my payments are: $1656 (30 years fixed) and I am requesting a rent of $1770 (that’s the max I can get in this area ).
Should I:

  • Just sell? (The area is still appreciating)
  • Refinance and take the cash out? (I need the cash to buy other properties)
    I absolutely need to lower the monthly payments.

I don’t really know what would be my best startegy in this situation. What interest rates should i expect (i know that more info is needed to determine this, but just a range will give me an idea as to waht to expect). I have 650 credit score with no late/missed payments.

Are there other things that I could/should do?
???Please help I am not sure what to do.


An asset is something that you should manage properly to make as much money as possible. When you sell it, it’s gone. And, you are right – it’s hard to rent. NEVER RENT.

I can show you how to take a bunch of cash out, lower your payments, get your tenants to live in the property, take full responsibility for maintenance and repairs, and pay a HIGH rent that someone else will collect for you. You will be protected from liens and encumbrances and your debt-to-income ratio won’t be affected so you can acquire other property(s). In addition, this will be a private transaction. You will make a huge profit.

If I do this, certain posters who use less effective methods of holding such as lease options, will scream and cry that I am board hustling or thread hijacking so let’s do this. I invite all the resident geniuses to show you how to make the most of your deal. Once they have, I’ll be happy to show you my way and you can compare.

Best of luck to you.

Da Wiz


I would like to hear how BAMI should handle this. Are you talking about lease option or rent-to-own???

Please explain. Eager to learn.


Hey wizard,

Do you happen to have a link or a post showing excatly how you set up the triple net leases and putting the property into a land trust? If you do I would love to read it, maybe you have the link saved? I have the general idea, but i’m an info geek.

Or maybe you have references to good land trust books?

when are You coming out with your courses? ;D

People keep asking me that. I will prepare a pdf file with the answer to this poster’s question that will include a step by step guide on exactly how to do it. If my email gets any more full, I may be forced to write some kind of a book and/or to set aside a day of the week to answer questions and consult by phone. Hopefully, I will have this pdf posted on this forum by Friday. Best of luck to you and I still invite people to make their suggestions to BAMI.

Happy 4th

Da Wiz

Thank you for everything. I’m still hoping to receive advices from others.
Also, I’ll wait to read your step-by-step guide.
It will be great for me and all the newbies on this forum.

To BAMI and Others:

Real estate laws limit your ability to utilize all the benefits available to YOU and share them with your tenants. For instance when you rent/lease your property, your tenant gets the use and occupancy. There are other benefits available to you as an owner such as the mortgage int. writeoff, property tax writeoff that you cannot provide to your tenant, and others that are just not safe to provide.

The secret is to convert your real property to personal property. It’s called the “Doctrine of Equitable Conversion”. I’ll offer two alternatives to you but first, REFINANCE at 80% LTV and get a 5-YR ARM Option loan @ 1.25% (it could be slightly higher as your credit is right on the borderline). Your new loan is for $276K, and you can pull out $39K, less costs to use for other purposes. Your minimum payment will be about $910 per mo., plus Taxes & Ins. Your interest only payment is about $1610. That is the lease amt. you will charge. Then:

A Simple Tax Lease; or, A Co-Beneficiary Equity Trust. Both require that you place your property into a Land Trust and deed title to your Trustee (I always use the same prof. non-profit corp. Trustee (He has safely handled thousands of trusts,) You have now taken the same step that celebrities and the wealthy have taken for years – you have converted your home from realty to PERSONAL PROPERTY. Your transactions no longer have to be public, they are private property. In fact, you are no longer governed by mortgage law, but by the UCC., Art. 9. Your trust will provide you privacy and shield you from liens and encumbrances as title is in your Trustee’s name.

  1. A Tax Lease -
    I would grant my tenant a 10% beneficiary interest in my trust, making him an owner of realty in the eyes of the IRS. Set the lease term, say at 2 years, and he pays the full mtg payment including taxes and insurance. The IRS allows him the property tax and mtg write-off, so his after-tax situation is greatly improved and he can afford the higher payment. At the end of the lease, the contract calls for him to grant his 10% back to the trust (you). You have in essence sold the tax benefits for 2 yrs.


  1. A Co-Beneficiary Equity Trust. Advertise saying that your home is in a Trust and you need a Live-in Property Manager to live in the property, make the payments on time, and be responsible for maintenance and repairs on a 3-year, triple net lease. Say: “I want you to treat this house with love – as if it were your own. I ask for no down payment – you will only pay closing costs (your cost of setting up the trust, plus 3 monthly lease payments (two of which are held in reserve in case of default”

There will be no bank or credit qualifying. If you agree to this and keep your end of the bargain, I’ll GIVE you the house. How? When you sign the lease and pay the closing costs and advance lease payments, I will immediately assign you a Beneficiary interest in my trust. You will (although only leasing) acquire IMMEDIATE home ownership benefits and are allowed by the IRS to write off the monthly mortgage interest payments and property taxes. I will also share in the future appreciation of the home on a 50/50 basis. At the end of three years, if you want to buy the property, you can do so at Fair Market Value. If you choose not to, there is no obligation or penalty. HE’S FLOORED AND SAYS YES.

The home is worth $345K. You are doing him a great favor. I’d settle on a Mutually Agreed Value (MAV) of say $360K. No down payment, he only pays the cost of setting up the trust (about $2800) plus 2 lease payments to be held in reserve in the event of default. Set his monthly lease payment at $1610, plus taxes and insurance for a regular payment. That should return you about $700 per mo. positive cash flow.

You have just converted your negative cash flow of say $200 per month to a $700 per mo. positive, and instead of losing $7200 over the next 3 years, you’ll make a positive cash flow of $25,200. Your negative amortization will probably equal that amount so you are using your own equity to provide a nice monthly income.

When he REFINANCES in 3 yrs and buys you out for $390K, you get about $125K (the diff bet $235-360K), then another $15K, your 50% share. During this 3-yr period you have also been able to depreciate the home. This is the method I use and have used very successfully. It is safe and private.


You turned a loser into a money-maker with proper asset management. This is NOT about real estate. It is about MANAGING your PERSONAL PROPERTY. Your return upon sale will be: $130,000 (less taxes but including negative amort.) profit with solid asset protection and your name nowhere on public records. In addition, you had no responsibilty for the upkeep and didn’t even collect the rent – your Trustee did and sent you a check each month) It’s not immoral or unethical, it is simply good business.

I wish you the very best of luck.

Da Wiz

And, you are right – it’s hard to rent. NEVER RENT.

I’m curious why you think so. I rent my properties, and have had no problems whatsoever, both trying to rent and with the tenants themselves.


Good for you. That shows you have sound judgment. However, in most cases on a rental, the only way you can have a positive cash flow is to put a large down payment. I prefer to do the NNN because I have:

  1. no responsibility for maintenance and repairs;
  2. no property management responsibilities;
  3. no vacancies;
  4. No rent collection duties;

Because my property is in a NNN, lenders do not ding my debt-to-income ratio and I am free multiple loans in my own name if I so choose. I usually am acquiring the property with a land trust and it is the seller whose name is on the loan.

Congrats to you for your good work.

Da Wiz

Thank you so much for the advice.
I have one more question. Since I have a loan, will this trigger a due on sale clause?
Do I need to have 'permission from the bank to set up the trust?


You don’t need permission from the bank to set up the trust. They gave you permission when they passed the Garn-St. Germain Act of 1982. Specifically you are exempt from the DOSC under US Code, Title 12, Chapter 13:
1701j–3. Preemption of due-on-sale prohibitions which states:

"(d) Exemption of specified transfers or dispositions: With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—

(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property;

You are in compliance by remaining “A” beneficiary and the trust documents make no reference to occupancy rights. If the code said “THE” beneficiary, you would be in violation. The best way to explain the difference is to ask, "Would you rather be a man who slept with your wife or THE man. Big Difference.

Once your trust is created, you now have the right to lease the property for less than 3 years with NO option to purchase to a co-beneficiary. Your lease is for 2 yrs., 11 mos. 29 days, and your buyer has FIRST RIGHT OF REFUSAL TO PURCHASE AT FAIR MARKET VALUE. He does not have an option or a fixed price so there are no equitable interest concerns.

Good luck and keep us informed.

Da Wiz

Awesome wiz, will be looking forward to reading it!!

The post at 10:07 will serve as a step-by-step guide until I am able to coordinate all the info I will need into a credible book that will be helpful, yet simple and easy to understand. This is a busy time as I’m moving to a new home and triple net leasing mine. I expect it will take until probably Sept. 1 to have it written and available. I will also be establishing a mentoring program. Thanks for all the requests and suggestions. Now let’s go out and have some fun and make some money.

Da Wiz