Lease Options Help!

General Real Estate Investing
21

You have been provided incorrect information. Under a lease option a tenant MUST get a new purchase loan.

Denise Tenant exercising L/O - NEW
« on: Tue. Jan 03, 2006, 10:01 PM »

If a tenant wants to exercise their L/O and they go to a lender for financing, would they be refinancing the loan? Or would this be considered a new purchase finance?

IndyBruce:

Re:Tenant exercising L/O - NEW
« Reply #1 on: Today at 09:02:41am »

They are exercising their option to buy.
So it would be a new loan.

Bruce

As to the mortgage interest writeoff:

You can deduct home mortgage interest only if you meet all the following conditions.

You must file Form 1040 and itemize deductions on Schedule A (Form 1040).

You must be legally liable for the loan. You cannot deduct payments you make for someone else if you are not legally liable to make them. Both you and the lender must intend that the loan be repaid. In addition, there must be a true debtor-creditor relationship between you and the lender.

The mortgage must be a secured debt on a qualified home.

22

Gary,

Thanks for another great explanation. What type of fees does the NARS trust charge for their services (rent collection and the such)? Also, when looking for a tenant, do they go through the same process as applying for a mortgage?

Herschel

23

Well, the mortgage broker may have been inaccurate about lease options (but I’ve talked to more than one about it), but it’s certainly doable with land contracts which makes your statement about it being unique to a NARS trust FALSE.

I can just imagine being counseled by you. It’s obvious that you don’t listen to anyone but yourself.

Herschel you’ve zeroed in on it. FEES

24

Pittcrew,

Please refrain from personal insults. I am addressing the concerns of a person who needs ACCURATE information and who thanked me for my answers. I am communicating with him privately. Thank you.

The information I provide comes from 25 years of experience using lease options (I wrote a book on them back in the 1980’s), and now from the information I have gathered from researching, studying and actually USING the trusts in my own transactions, not from what I heard from someone.

25

Please refrain from marketing your services and products at the exclusion of every other method of investing. Your trust is not the end all be all of investing no matter how many years of experience you have using it. People invested without it before you, and they will invest without during you, and will happily invest into the future without it after you.

Creative investing didn’t begin the day you decided to enter this forum. The fact that I don’t see you promoting your trust on TCI is because they prohibit board spamming there. And this is exactly what you are doing.

I recommend you learn something about internet marketing so we don’t have to witness your beginner Internet marketing 101 for dummies efforts here simply to drive traffic to your website which is where people discover you are selling a service that many of us know is not necessary.

Every newbie here deserves to hear more than YOUR version of the truth. No one said your system doesn’t work. But you HAVE said that doing it other ways is SUBTERFUGE. Guess what, some of us do our transactions in the OPEN. YOU are masking your transactions and that is closer to SUBTERFUGE than simply recording the deed in your entities name.

Don’t tell me to refrain from personal insults when you began doing for your first post.

26

With all due respect, I have the right to answer questions and follow up with others without personal attacks from someone who “hears things”. I suggest you return to Mars and quit the harassment. Just ignore me and I’ll happily do the same for you. Thank you.

27

Gary and Jeff,

I think I started the fire going :slight_smile: being that I had no clue about lease options, land contracts or NARS Trust. I enjoy reading information regarding real estate. I think both of you should be open to saying what you feel is safer/works better and why. Either way, I would like to keep hearing more details about this these topics. I am not going to be sold on any method just by reading a website. I will do my research and speak to lawyers if need be.

Keep the info coming!!!

Herschel

28

Stop promoting your product and calling other methods subterfuge and I’ll be glad to shut up

29

Come on guys, please don’t fight over this!

From my studies I’ve learned that there are major benefits as well as major pitfalls associated with any means of REI. You are both doing well with your respective methods, so how can either of you say that either way is the wrong or right way? Isn’t there enough room on this board for BOTH of you to engage in mature sharing and explaining of your preferred investment methods?

And more importantly, can we all make a pact to never utter the word SUBTERFUGE in this thread again? :wink:

30

Thank you, Deborah. I reviewed all my posts on this thread and I never used the “s” word. I appreciate your input and like I said, I was just trying to answer questions asked of me.

31

I agree with you 100%…and you aren’t the only one who sees through his thinly veiled attempts to sell himself and his services. It completely takes away from the forums.

32

Gary Gary Gary
You are at it again.

25 Real Estate Investing / Sub2, Owner Finance, Options, Lease Options Forum / Re:I’ve read the sub-to articles on: Mon. Dec 26, 2005, 08:12 AM

“Forget subject 2’s unless subterfuge is a way of life. Use a NARS land trust. Safe and profitable.”

Yes , you wrote it.
We all know it is not true.

;D

Bruce

33

IndyBruce,

Remember Gary is a learned person, which shows in the way he posts, giving him that his Street Smarts are a little under par as he has a way of, should I say, not using the proper diplomacy in his posting.

However read what he said…

“Thank you, Deborah. I reviewed all my posts on this thread and I never used the “s” word. I appreciate your input and like I said, I was just trying to answer questions asked of me.”

Now although what he posted smacks of SUBTERFUGE in essense in this thread he did not use the “S” word.

John $Cash$ Locke

34

I want to thank Indy, Cash, Pittcrew, Bobo for being so pliable (you’ll have to look that word up, Pittcrew).

I guess our definition of thread is different. The only reference I made to the “s” word was in another topic on this forum regarding acquiring properties via “subject to”, which is exactly what I do. The only difference between the method I use (the NARS Trust) and your method is that my method is LEGAL, SAFE AND QUIET - A “Subject-To,” without the necessity of public notification, secrecy or “quiet” documentation. It has been employed successfully without legal incident or challenge with regard to IRS, lenders, or legal and accounting issues since 1984. It is ASSET PROTECTION at its best (property protected best from creditor judgments, tax liens, and probate) and it does all of this without undue and/or notorious due-on-sale compromise…

In my opinion, that makes it the best way to acquire properties. You can scream and yell all you want, that is simply my opinion and that of an increasing number of people around the country who are realizing its benefits. The trust can be structured to effectively accomplishes the purpose and all the objectives of:

*  Lease Options,
*  Lease Purchases,
*  Contracts for Deed,
*  Land Contracts,
*  Wrap-Around Mortgage schemes,
*  Equity Sharing and even wholesale "flipping" and assignments.

There were even complaints that I am saying it is useful in all situations, an end-all. What I did say is that once I have acquired a property (no matter how), I believe the best way to manage and protect that asset is through the use of the trust. I am able to get higher rent, always have a positive cash flow, have no responsibility for maintenance or repairs, and my collections are handled by the trustee.

So again, gentlemen, in my humble opinion the NARS Trust is the best way to both acquire and manage single family residential property.

THANK YOU for being so helpful in bringing the attention of those on this forum to this outstanding strategy through your childish personal attacks. Everything from not being a good counselor, to an attack on my education. As they say in the Guinness commercials: BRILLIANT!

:smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley: :smiley:

35

Wouldn’t the line, “…(you’ll have to look that word up, Pittcrew)” be, in fact, a “childish personal attack”, Doc? If I’m wrong, please correct me…

The other posters are right – you just can’t help yourself.

OK, gang, let’s let the “good Doctor” answer the questions posed him and I’m sure that he will dispense his “wiz-dom” accordingly.

Keith

36

Gary,

My way of doing Subject To deals…

“I am able to get higher rent”

I sell on a Contract for Deed so my buyer feels true home ownership, not a tenant or renter and the buyer is able to deduct the interest on their taxes, etc.

“always have a positive cash flow”

I have 3 profit centers, the down payment, increase in the interest rate from the original loan, which gives me a monthly passive income and 2 years worth of apprciation added to the purchase price, so I really have a positive cash flow.

“have no responsibility for maintenance or repairs”

Since my buyers have the true feeling of home ownership not only do they handle all maintenance and repairs, but in the majority of cases improve the property.

“and my collections are handled by the trustee.”

I believe that my way of handling collections was a creative industry first as I use a License and Bonded Loan Servicing Company to collect the mortage payments from the Buyer. This comes in handy when my Buyer is required to re-finance in the two year period as there is a record of how they made their payments.

The DOS clause has never been a factor with me or anyone I know who does Subject To deals the proper way.

Personally I do not use a Trust and never have because of the fraud issues which I felt would happen sooner or later. If you read my report again from the powers that be in North Carolina, they are prosecuting on the Fraud aspect of a Land Trust, which is controlled by the State and not the Federal Statutes.

John $Cash$ Locke

37

Good for you, John. As we both know, the North Carolina case did not involve a NARS Trust which has been employed successfully without legal incident or challenge with regard to IRS, lenders, or legal and accounting issues since 1984. There are no fraud issues.

The North Carolina case involved a couple of guys who established a trust and made themselves Trustees – a NO-NO. I always use a non-profit corporation. They ripped off the client and deserve whatever they get.

Your method accomplishes virtually all of the goals of the Trust with the exception of legal protection from creditor judgments, tax liens, bankruptcy, probate, etc., which only a trust can provide.

Good luck.

38

Gary,

Once the deed is in my entity, how will anything attach to the property in the sellers name since they no longer own the property?

Since I do a preliminary title search for leins and encumberances, once I am certain there I none I record the deed, then whatever happens to the seller past the deed being recorded, does not attach to the property.

Looking forward to your answer.

John $Cash$ Locke

39

John,

I’m referring to the tenant/buyer AFTER you have acquired the property. If I have a property in trust and I have a tenant on a 3-year triple net lease and he goes into bankruptcy or a judgment is recorded against him/her, the property is protected. No lien can be placed against it and the trust cannot be penetrated. If a default occurs, it’s a simple eviction, no foreclosure needed.

40

Gary

Top Real Estate Attorneys in Indiana say that the way we do it is LEGAL, SAFE AND QUIET. This method has never lost in court. And yes people if you do enough deals, you will end up in court. Most of the time it is from your L/O people not paying their rent.

For you to imply it is not legal is absolutely FALSE.
I do not know if your way is OK or not. But for you to imply that it is the only way that is legal is outrageous.
It sure looks like you are just trying to reel in the fish…

Bruce