Wiz
I got it a long time ago, thanks for your posts!
NDI
Yes, Doc, we ALL get it.
Point is, yours is a package deal, I assume. If the seller isn’t willing to put their property into a trust, I bet that you don’t pursue the deal any longer. Likewise, if they agree to the trust, they have to agree to give up 90% of their interest in that trust, they have to agree to let you control the actions of that trust (essentially because they have given up 90% of their interest, which makes it non-revocable under the letter of the law), and they have to agree to give up their occupancy rights (via a lease that YOU control) in order for you to agree to deal with these sellers. If all of that is correct, then the seller HAS to accept the package deal in order to get rid of the property.
If the seller HAS to accept the deal has a package, then the WHOLE package must be considered. The trust IS setup to hide the transer of 90% of the interest in the property (loan fraud). The transfer of 90% of the interest makes it NOT revocable by the original owner (violation). The lease DOES transfer occupancy rights and is required by the investor to do the deal (violation). Yes, you CAN argue is one separately and have legal grounds. However, they aren’t separate. They are REQUIRED for the seller to accept as a package deal, and therefore, legally speaking are ALL part of the trust setup.
Bye, Doc.
Raj
Rajah,
You should be ashamed of yourself.
“The trust IS setup to hide the transfer of 90% of the interest in the property (loan fraud).” WRONG. THE TRUST IS SET UP TO PROTECT THE SELLER AND NOT ONLY GUARANTEE THAT HIS MTG WILL BE PAID OFF AND HE WILL RECEIVE ALL HIS EQUITY, BUT HE WILL ALSO BENEFIT FROM DEPRECIATION AND MAKE MORE MONEY THAN HE WOULD WITH AN ALL CASH SALE. THERE IS NEVER A TRANSFER OF INTEREST IN THE PROPERTY, ONLY IN THE TRUST – PERSONAL PROPERTY. YOUR ALLEGATION OF FRAUD IS REALLY STALE AND SILLY.
“The transfer of 90% of the interest makes it NOT revocable by the original owner (violation).” WRONG. AND, BY THE WAY, SOMETIMES THE ORIGINAL OWNER WILL REMAIN IN THE PROPERTY AND LIVE IN IT AND HOLDS 50%. DEPENDS UPON HOW WE MUTUALLY STRUCTURE THE DEAL. THE ORIGINAL OWNER CAN STILL REVOKE THE TRUST IF HIS CO-BENEFICIARY AGREES. IT IS STILL LEGALLY REVOCABLE.
“The lease DOES transfer occupancy rights and is required by the investor to do the deal (violation).” WRONG. SOMETIMES THE SELLER REMAINS IN THE PROPERTY. THE LEASE IS SPECIFICALLY MADE LEGAL BY GARN ST. GERMAIN, and HE CAN LEASE TO ANYONE.
YOU HAVE JUST PROVEN HOW LITTLE YOU KNOW ABOUT TRUSTS – AGAIN – AND PROVEN IT VERY WELL. I strongly recommend that you never use one and stick to simple transactions in which you can understand what you are talking about. Here you clearly do not.
Da Wiz
I see we have been changing posts again over the weekend after it had already been previously responded to. Good thing I quoted the part I did, before you changed it to try to make yourself look good.
2 or 3 OWNERS huh!!! Ownership denotes a purchase by someone. This also means something must have been sold. SO A SALE HAS TAKEN PLACE…interesting, but we can get back to that later.
Blacks Law states the following definitions:
Inter vivos trust. Trust created by an instrument which becomes operative during the settlor’s lifetime as contrasted with a testamentary trust which takes effect on the death of the settlor.
Settlor. The grantor or donor in a deed of settlement. Also one who creates a trust.
Revocable trust. A trust in which the settlor reserves the right to revoke.
Remember that this trust is a revocable trust, set up by the seller (settlor), owned by the seller (settlor) and if set up according to law, could be revoked by the seller (settlor) .…(or is it ???)
So now you are telling us that all the “owners” must vote and unanimously approve a revocation???
Well let’s see how this might work:
- We have the seller (settlor) (the original owner of the trust) who created and owns this trust (that you, the investor help set up) and wants to revoke this revocable trust to get his house back;
- We have the new buyer (new owner within this trust and not a settlor) in the house who doesn’t want to revoke because he will be forced to move and lose the house he paid money for and thought he was buying; and
- We have YOU the investor (another new owner within the trust and not a settlor), who will probably lose money and possibly be sued by the new buyer if the seller (settlor) takes back his house (gee, I wonder which way the investor will vote???).
Unanimous vote…yea right.
With the way you have it set up, the seller (settlor) can’t change his mind and revoke, his own trust, by himself, and without the vote all of those new beneficiaries that YOU the investor have set up, then the seller (settlor) has lost control of his trust; then if this is the case, is this a legal trust??
Now we haven’t even started to address the issue that the SETTLOR, and not additional beneficiaries, is the one who makes the determination, by law, as to if or when the trust is to be revoked…and nothing about other added beneficiaries.
If the seller (settlor) no longer has occupancy rights and can’t revoke his trust, then at the very least, this is a violation of the act and subject to the possible calling of the loan through the DOS; or even worse, if this was done with the intent to hide the transfer from the lender, then it is fraud punishable by whatever means the court may find against YOU the investor.
Why would the settlor want to revoke when his equity is guaranteed, his mtg will be retired before he ever has to give up title, and he is depreciating the property and improving his credit by having his tenant make payments on time? If the tenant decides not to purchase at the end of the lease term, the settlor may indeed repurchase the property from his Trustee. And, by the way, many revocable trusts have multiple ownership but can still be revoked by a unanimous vote. Difficult concept?
Read the post at 2:05 pm. A refresher course in English Comprehension is advised for you. Your entire answer is without basis in law or in fact, and incorrect as usual. I find it boring since you don’t identify yourself and have little to offer other than incorrect assumption. You know so little about trusts and a little bit of knowledge is dangerous – to yourself. As I told you before, you should stay away from trusts. Don’t use them and don’t talk about them. Thank you.
Da Wiz
“settlor may indeed repurchase the property from his Trustee.”
Why would he need to repurchase something he “never sold”
or are you finally admitting what we have been saying all along that this is really a disguised sale.
The Trustee has the deed to the property – remember? If the term repurchase confuses you, how about reacquire? A lease option may be a disguised sale, not a land trust. Back to class. Aren’t you tired of demonstrating how much you DON’T KNOW or are you just too cheap to buy Bill’s course and trying to acquire a free education?
Da Wiz
You mean the seller’s (settlor) trust has the deed with the trustee controlling the assets of the trust.
So why would the settlor need to buy back something he already owns (in trust)?
Figure it out.
Da Wiz
I did.
It is a disguised sale and fraud
So it’s your ‘OPINION’ that it is disguised sale and fraud? You have not shown yourself to be an attourney and you have not noted any caselaw stating that this is a fact. Doc let’s us all know what his credentials are and when ever he speaks he offers case law to back up what he says. If you don’t like the system that he uses don’t use it. I don’t believe the Land Trust is the cure all for everything but I do believe that the Rich have used it for years to hide and grow wealth.
Peace
NDI
And that’s your opinion, NDI. What case law has Doc used to “prove” that his system is legal? Those that he routinely posts at the bottom of his posts? What do they have to do with land trusts? Why does CA case law prove that they’re legal in all 50 states? What does any of them have to do with the NARS system when the Doc has bragged that you can’t find a case study with it in it?
Have you read those case laws, NDI? Heck, even Doc admitted on another board that he hadn’t. It’s just what he is supposed to post. Look 'em up, then tell me how that they prove that the NARS system is legal and valid, please.
Again, no one at all is saying anything about land trusts. That’s just Doc twisting things around again. When something is posted that he can’t/won’t respond to, he cries “land trust hater.” The whole debate has been over a) the way the NARS trust system is used and b) Doc’s blatant advertising of it on this site.
What does the rich using land trusts have to do with any of the above? Nothing. The rich don’t use the NARS system.
What I find completely comical is that for a month now, the Doc has been arguing semantics with cries like “it’s not a sale!” Yet, now that is a big deal when it’s turned around.
And as I said before, you will be hard press to find any case law on the NARS system or any Sub2 transaction that has had trouble. Why? Because the majority are settled OUT OF COURT, hence no case to look up. So yelling, PROVE IT! doesn’t really work.
However, if you want a case to look at, look no further than the great NC case that brought so much attention and fame a year or so ago, and the rise of the infamous HB 725.
In that, the investor WAS using land trusts in the way Doc describes. Were they NARS, I couldn’t say. However, I do know that Bill Gatten himself took a personal interest in the investor’s defense. What happened? In a nutshell, the land trusts were considered invalid and fraudalent, considered a disguised sale by the courts. ALL properties were given back to the original owners and the investor fined $20K, if memory serves. BUT, no case file to look up because it was all settled out of court.
Now, the Doc is going to rail on this and that’s okay. Everybody is entitled to an opinion. However, if you want to review for yourself, simply go to the creative investor site and do an article search on the subject as well as some forum searches. It’s all there. (Sorry for the plug, Mods, but I think that it needs to be there for now)
Raj
You know Roger it is my expressed opinion. And you seem to push your opinion and attack anyone who does not see it your way.
You know I have PM Doc on the trusts and he has NEVER pushed his system on me! I have several properties that I am seriously considering putting in Trusts. Will I call the Doc and use his system, propably not. Will I contact my attourney and CPA here in ND and see what they recommend for my situation, probably.
When did I “YELL” prove it? I think that is what you “heard” because I don’t agree with you or Boo Boo.
NDI
Thanks, NDI.
Don’t you get suspicious when Booboo and Rajah keep asking even dumber questions? I’ll destroy his latest fantasy about NC HB 725. Here’s his quote: “However, if you want a case to look at, look no further than the great NC case that brought so much attention and fame a year or so ago, and the rise of the infamous HB 725…”
By the way, Bill Gatten and John Locke (good friends) worked side-by-side in NC to fight the legislation. Here is Bill’s response:
“The NC Attorney General flare-up was due to the Barberios having bought someone else’s course (some couple named someone and Francis or something like that) and trying to do a PACTrust look-alike while simultaneously being the beneficiary and trustee. They were two seperate entities, but each was owned by the same parties (i.e., merger of title:ergo no equitable conversion) and what I preach and teach happened as I say it will. The trust was defeated and set aside and the Barberrios were fined $20,000 and forced to return all properties having been acquired or managed in this manner.”
“As a matter-of-fact, is was John Locke himself who told me in private during that time that if they followed our system, they would have been off the hook with the AG, as the merger of title issue would not have come up. Understand that it is imperative that one in a long-term hold have a bona-fide third-party trustee that is not related to the beneficiary/ies, in order to avoid merger of title issues.”
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What is actually happening in NC is that the AG is banning SUBJECT 2 transactions unless you are a realtor because the AG claims they have “hundreds of defaults”. However, not only are land trusts still legal – OF COURSE, and they are covered under "Chapter 36C. "North Carolina Uniform Trust Code.
Land trusts are legal in all 50 states, and Rajah and the subject 2 boys who tell you to ignore the DOSC can’t stand or understand it. He keeps wanting me to prove it’s legal and keeps trying to prove it’s not – which is impossible. We do hundreds of trusts every year. Have a nice day.
Da Wiz
Yes, NDI, it is your opinion. And no, I don’t ‘push’ my opinion on anyone and no, I haven’t ‘attacked’ anyone.
You said that Doc used case law to back up his system as legal. My question was simply ‘what case law?’ What he cites has nothing to do with land trusts or his system so what does that prove? That he can cite case laws dealing with anything?
Let’s be really clear here, too. You accuse me of ‘attacking’ when originally, this was a simple discussion/debate on an issue. Doc is the one who simply cannot handle a civil discussion and has routinely completely ignored any questions or comments and responded instead with name-calling, bad-mouthing, flaming child-like responses (see above for one example).
So, NDI, yes everyone is entitled to their opinion and choice. For instance, you choose to defend a person, that in this thread alone, has been wholly unprofessional, has used misdirect and deceit to “answer” questions, has re-edited his posts after being responed to so that they ‘look better,’ and has used libel and slanderous statements to try to discredit anyone disagreeing with him, and you accuse me of attacking?
Now, as I said a long time ago in this post, before, Doc and I agreed to just disagree, fine. However, I can’t respect any person that would drop to the depths that he has in this thread to promote his system. Forget about the system at this point. Anyone acting in that way would have to bring up enough questions on it’s on. If it’s all so up front and legal and such, why is it necessary to act in such a manner as opposed to just giving the answers? Or better still, follow the old saying, of “can’t say something nice…”
Bye
Raj
I went back through the archives and Rajah was asking the same questions on this forum a LONG TIME AGO, and Colvegas and several others already provided him with EVERY ANSWER that I have – ON MANY OCCASIONS, yet he keeps repeating the same questions, YEAR AFTER YEAR. He knows his “facts” are wrong yet likes to confuse the issue. What’s his agenda? In reviewing his posts, it seems he is a subject 2 lover. No wonder he hates land trusts. They DON’T violate the DOSC and are legal. A Subject 2 without a land trust requires secrecy and subterfuge are being banned in NC, and targeted in many states. They also require a little prayer that banks don’t again decide to rear their ugly heads and start calling loans as they did years ago.
Thanks to NDI for his common sense appraisal of the situation, and all the others who sent supportive emails and PM’s, and thank you Rajah for being so desperate, and making it all happen. Your silly questions have enlightened many posters on this forum as to the benefits of the land trust.
Da Wiz
Roger
I don’t claim to be an expert on Land Trusts so why are you asking me the questions if it’s not an attack? I think it is time to put this topic to bed.
Readers:
What is your opinion if this were a debate who won by giving the most crediable and consistant comments? This is only ‘My Opinion’ since I am not a debate judge.
I say
Doc (1)
Roger and Boo Boo (0)
Look forward to seeing others comments!
Have a Great Day!
NDI
Raj,
I should have listened to you in the first place…he ain’t gunna quit (a true Gattenite).
I accomplished what I started out to do in questioning something that was “suppose” to be the all saving investment vehicle. Now it is time to get back to work in the real investing world.
NDI,
This is what is great about America. We can all agree, disagree and have our own opinions.
I happen to not have a problem with trusts as asset protection and financial planning as they were designed for. My family and I have been using them this way for years.
I do however have a problem with the way they are being implemented here.
We all know that there is an air of animosity growing against investors by the number of new state laws going into effect, because of stupid and illegal activities being done by a few individuals. The state officials are starting to look at and scrutinize our industry with a fine tooth-comb.
Now, for some unknown reason, Da Wiz is on a crusade that his way is the ONLY way to invest with no risk and that is just plain false. The only way to show this “falseness” was to poke holes in his investment strategy because there is risk in ANY investment strategy, including this one.
If I can do this chipping and poking holes as a layman, I’m sure that the attorneys and state officials can also do it, but with a lot more gusto.
This trust is NOT a do all; and in my opinion using it in this manner will eventually get someone in deep trouble especially if they are not aware of these risks.
If nothing else, this has been one of the more spirited threads I have seen in a long time.
Final Response. BooBoo, YOU ARE RIGHT. My intent is not to say that a land trust is the ONLY way to invest without risk. That was a simplification. -Why? Because a land trust is only a component of the equity holding trust system I use which I firmly believe is not the only way, just the best. You have not only privacy and asset protection, but you can accomplish just about anything you choose. I don’t know of any other creative financing method that provides that kind of flexibility. If you do, tell me, I’m all ears.
Our equity holding trust system may be seen an effective legal shield for virtually ANY creative financing objective. It can, in essence be tantamount to a Long Term Lease (i.e., a lease for more than 3 years); a Lease Option; a Lease Purchase, an All Inclusive Trust Deed, an Equity Share Arrangement, or a Land Contract (e.g., Contract for Sale, Contract for Deed, Contract for Warranty Deed, etc.). The Trust can meet the objectives and functions of any of these arrangements without the many risks associated with them. In addition to the Triple Net Lease which I employ, the Trust can function:
AS A LONG TERM LEASE: A Co-Beneficiary Trust can be set up for up to twenty years, with a Lease of the property to a Resident Co-beneficiary for 2 years, eleven months and twenty-nine days. The lease with the trust will stipulate that at the end of the original lease term, the tenant may “hold-over” in the property until the end of the trust period, unless evicted sooner. Since an eviction would have to be by mutual direction by ALL beneficiaries: the tenants being one of the beneficiaries, protects him and effectively continues his/her holdover until the termination of the trust.
AS AN AITD (Wrap-Around): A seller places its property into a Trust, assigning a full Beneficiary Interest to the “buyer,” with the agreement that the property will be leased to the co-beneficiary on a Triple-Net basis for some specified period of time. The property is then scheduled to be sold at the end of the Agreement. Upon sale there is a distribution of proceeds to (between) parties with respect to each of their proportionate shares of Beneficiary Interest. In order to avoid reassessment for property tax purposes, and to justify mutual Power of Direction, we recommend that the shares of Beneficiary Interest remain at 90%:10% in favor of the “buyer.” Then at the end of the term, the “seller” can forfeit its 10% in consideration of the co-beneficiary’s prompt payment record and strict adherence to the contract.
AS A LAND CONTRACT: (Contract for Deed): Benefits are the same as above.
AS A LEASE OPTION: The property is placed into a Trust with the understanding that, at the end of the Agreement, the property will be sold to the Resident Co-Beneficiary for Fair Market Value, minus any and all sums owed to the Resident Co-Beneficiary. In this scenario verbiage is such that there is actually no “Option” per se; and that there is no “bargain buy-out” provision other than “…at Fair Market Value, less amounts due the respective beneficiaries.”
AS A LEASE PURCHASE: Same as above, except that the Agreement provides that the property will definitely be acquired by the Resident Beneficiary at termination irrespective of market conditions, relative values, etc. The Rider in this scenario provides that the co-beneficiary has the obligation to either sell or refinance at termination.
AS AN EQUITY SHARE: Same as above, except that parties share 50:50 in the Beneficiary interest within the Trust, with an agreement to share all net profits proportionately at termination.
AS A BRIDGE-LOAN DEVICE (e.g., when a buyer can’t finance, or afford a down payment for several more months or years and the seller may be willing to wait awhile): The Trust affords such a buyer the opportunity to live in the property, while paying all costs and enjoying all the benefits and incidents of homeownership, including tax write-off and waiting until financing and outright purchase is possible. In this scenario, the Trust is set up to coincide with that point in time when the property can be purchased outright by the Resident Beneficiary.
AS A VEHICLE FOR HIGHER RENTS AND FREEDOM FROM ACTIVE LANDLORD RESPONSIBILITIES AND COSTS: A prudent landlord would be well advised to consider making his rental tenant a Co-Beneficiary in a Trust in which the rental property’s title is vested. This will give the landlord an ideal opportunity to trade such items as tax write-off, equity, equity build-up, appreciation and the psychological peace of homeownership, for such commodities as free maintenance, repairs, upkeep, management… and much higher rents. Each one of these “items of trade” has a value, and giving up all or some of each one can more than double rents while simultaneously [greatly] reducing the expense of renting for the tenant.
You said the land trust is “not a do-all”. I agree. But, as part of the equity holding trust system, I’d say it’s pretty darn close. Anytime you convert your real property to personal property, you not only have privacy, but you open up a whole new world of options previously unavailable. Is it any wonder why the wealthy have used these methods for decades and kept it to themselves?
I enjoyed the exchange. Have a good day.
Da Wiz
<<Final Response.>>
…one could only hope…
Keith