NARS LAND TRUST

Bird Dogs, Wholesaling
1

HEY FRIENDS,

CAN ANYONE EXPLAIN TO ME HOW MUCH IT COST’S TO SET UP A NAR’S LAND TRUST? WHO ALL IS INVOLVED IN SET UP COSTS, ETC…

THANKS,

ALLPLAY

2

call local attorney and ask. I think from 300 to 1000.

3

HOLY PHENOLY! WAS THIS SO BASIC, NO ONE WANTS TO TOUCH IT?!

4

Hi,

I’ll try to answer without being accused of advertising since I use the NARS Trust exclusively to acquire and manage properties. The cost depends upon what you want to accomplish. For a simple trust to protect your own home, it runs around $350 and the paperwork is very simple.

For investment properties:

  1. One type of trust typically involves only two parties – a Settlor Beneficiary and a Resident Beneficiary (i.e., “seller” and “buyer”), and

  2. another Trust involves three beneficiaries: Settlor (seller), Investor (buyer), and Resident (co-buyer).

Overall, there is a combination of documentation including, but not limited to:

  1. the Land Trust,
  2. an Assignment of Beneficiary Interest,
  3. a Co-Beneficiary Agreement,
  4. a Triple-Net Possessory (lease) Agreement, and
  5. a Limited and Revocable Power of Attorney.

NARS charges 1% of the Mutually Agreed Value plus about $400 for accounting and legal review to prepare the documentation. This usually runs around $1600 or so, which cost I immediately get back as it is included in my tenant’s initial upfront payment.

The Trustee setup fee is $500, plus they charge $40 per month for payment processing (they collect your rents and pay your mortgage, sending you a check each month for your positive cash flow). This cost is also including in the “closing costs” the tenant pays. There are those who will tell you you can do it cheaper and you can. However, a trust is a vital document and must be prepared so that it will withstand any challenge.

Whatever you do, the selection of your trustee is vitally important. There are those who will tell you to just appoint a friend or your attorney. That is bad advice for a variety of reasons. For instance:

An individual would most likely never be bondable as a trustee and would likely not have the resources to provide a completely separate, free and bonded collection and bill-paying service.

An individual would not be seen by the courts as a standard trustee, charging fees “commensurate with industry standards”: therefore severely impairing the integrity and structure of the land trust.

One’s own personal appointment would not be seen by a 2nd or 3rd co-beneficiary as a mutually trustworthy holding entity. Such likely bias obviously would not be in the best interests of any of the co-beneficiaries.

Using one’s own attorney would perhaps not pose a problem as long as no other unrelated beneficiaries were involved who would have separate and independent interests and financial objectives within the arrangement.

An individual trustee’s failure to charge a fee would not support the land trust’s validity in court. The attempt to charge a fee would not be seen as adequate unless the party were a bonded entity.

An attorney or law firm would most likely not be bonded as a trustee for land trusts; though his/her malpractice insurance may suffice as protection against malfeasance and/or errors and omissions.

An attorney or law firm would likely not be recognized as a bona fide trust holding institution by any court that would be challenging the integrity and purpose of a a co-beneficiary land trust title transfer.

One’s own attorney would not create a mutually trusted, unbiased third-party “escrow” entity. A biased attorney (acting in primary favor of a client) could wreak havoc in a contest involving dissention between/among beneficiaries.

I wish you the best of luck and hope I answered your questions to your satisfaction.

Da Wiz