Posted by Bill Gatten on May 14, 1999 at 16:13:01:
I like this. What I (personally) would do is buy to hold, and do a “quick condominiumization” with a Land Trust. That is I would bring folks in as owner-beneficiaries of the trust that holds title to the property, and give them each a proportionate share of the beneficiary interest and the benefits and incidents of ownership (say, 50% to me and 25% to each of them along with the tax write-off, etc.), with an agreement that we would all sell at a specified point in the future and share the profits with respect to our percentages of beneficiary interest held in the title-holding trust (e.g., akin to to a sooper easy Ltd Prtrsp stucture). The cash flow potential here is excellent and the apparent difficulty in disposition likely means you could pick it up for a lot less than a knowledgeable person might sell it for.
The 50/25/25 split of the whole, means that they each share 50:50 with you in the net profits on their own “unit” when the property sells.
You could, of course, L/O in the same manner, but that wouldn’t give you the ability to “sell” the tax write-off in exchange for the significantly larger rents and cash up-front (let alone the protection of non-partionability in the event that someone’s personal problems would create legal entanglement threats to the title: e.g., BK, marital disputes, tax liens, creditor judgements, etc.).