Re: Is there a deal here? (Ed Garcia please respond.) - Posted by Bill Gatten
Posted by Bill Gatten on March 25, 2000 at 17:35:16:
Not an advertisement (gawferbid)…but I’ve done a dozen just like this and made a lot of money. And my gosh I hate to see you take some of the advice proffered here and walk away from an excellent opportunity. This is like a miner throwing a diamond away because theirs no gold in it. One should not only THINK outside the box: he should GET th h? outside of it and stay that way! Think of the landlords who complain about negative ( or no) cash flow, never realizing that they could easily sell the tenant all or part of the tax write-off, the equity build-up, the appreciation, the water rights, etc…in the property if they just knew how and wanted to.
OK, on your deal…consider this:
Put the property into a title-holding land trust (yawn), become a beneficiary with the owner (she keeps 10% of the beneficiary interest, which she forfeits to you at termination (4-5 years later). Her holding the 10% saves you from a load of worries (…DOS, insurance issues, owner issues, dispossession, property tax, reassessment, etc.). With the proper documentation, you now have 100% of the benefits of ownership (including the tax write off and the ability to sell it to someone else, assuming they live in and own a part of the same property).
Next you put someone else in as a 3rd co-beneficiary who handles all (your) closing costs and monthly payments, as well as all mtce, repairs, etc. for the term of the trust. You agree that you will give them the property, the tax write-off and, say, half of any future appreciation in exchange for their doing it your way. Now you have acquired the property with no cash out and no costs and no credit or credit risk of bank loan. (Yawn again).
However, before you did any of this, you should have approached the seller about her paying off that second TD first. She says she can’t. You say, “Then when can you?” She says “In 4 or 5 years at best.” You say “Great! We’ll just leave it on then, so long as you make the payments on it.” She says, “I can’t make all those payments.” You say, “How much CAN you afford to pay?” She says “Half.” You say “OK then.”
Now your have a positive cash-flow on top of the equity you created by raising the price to your 3rd party by $4-5,000.
No URL’s; no trademark names…just think about it. Please? (sigh).
Bill Gatten
