Posted by dewCO on January 13, 2001 at 20:31:00:
He means you answered with a question. You can’t do that! It’s a joke–Bill G. is the jokester you know.
PACTrust - Posted by DaveR
Posted by DaveR on January 12, 2001 at 13:02:54:
Ok, just got in this biz and I rip’roarin’ ready to go. And my vehicle of choice…The PACTrust concept. With all that it has to offer and the headaches it saves you from, why would you NOT use it as your primary tool in REI?
This PACTrust is just simply unbelievable. All my RE dreams WILL come true.
DaveR
Re: PACTrust - Posted by Bud Branstetter
Posted by Bud Branstetter on January 12, 2001 at 19:23:44:
I’ve used land trusts for some time. A Pactrust as you know, starts with a land trust. Set up a little difference but the essence is in the beneficiary agreement.
The Pactrust is not the the panecea to solve all your problems. You will need to learn many other things to learn why the Pactrust deals with the issues on many things in a better way. It does not do your marketing. It doesn’t do you negotiating, repairs or management. I do hope all your RE dreams come true. Just be sure to have an action plan to assure those dreams.
Re: PACTrust - Posted by Marc in PDX
Posted by Marc in PDX on January 12, 2001 at 13:48:20:
> All my RE dreams WILL come true.
Well, do your homework. Read William Bronchick’s articles on Land Trusts at www.legalwiz.com and on this site as well. There is also a newsgroup on the topic on LegalWiz.
Marc
Re: PACTrust - Posted by Bill Gatten
Posted by Bill Gatten on January 13, 2001 at 16:24:48:
Marc, I think you meant to say "…a newsgroup on the topic of creative financing on Bronchik’s site…not the PACTrust (gawferbid…).
Bill’s (Bronchik’s) comment when asked about the PT was that it is a sound system, but more complicated than some other methods of creative real estate finance. Here’s my response to him on that issue:
Bill,
I agree with you in that context. However, I also agree that the Lease Options and Rent-to-Own concept works more simply as well…if one is not concerned about the potential involvement of unforeseen creditor liens, tax liens, marital disputes, probate actions or BK’s. And too, the idea of the settlor remaining as a beneficiary of the trust eliminates so many hypothetical and real problems sometimes associated with other creative financing devices: obtaining hazard insurance, title insurance, subterfuge, lender’s acceptance, protection against the personal and legal problems of the “other” party, etc.
As you may have noticed, I regularly suggest to people who want to do a simple land trust or lease option or contract for deed that they take your course and use your programs and forms…the PACTrust has another use, however (and it doesn’t have to be complex at all…and we provide the documents and the instructions and personal hand holding through it all). Although I DO agree that it is more complex and time-consuming to learn than is the concept of lease optioning or contracts for deed.
My intent in creating the PACTrust originally was to shield ANY creative financing scheme from a legal standpoint (my favorite being equity sharing). The Due on Sale issue, so bandied about and overworked lately, is a very minor one compared to the safety and protection of the parties and the ease of selling it to a too cautious or hesitant seller.
In recent months I’ve seen a number of transactions wherein the seller refused to cooperate at the end (feeling he’d made a bad deal and wanting to screw things up for the buyer), which were saved by the PACTrust concept. In some others, I’ve seen the resident beneficiaries trying desperately to take advantage of the seller (non resident and investor beneficiaries), but to no avail because of the protection of the co-beneficiary, afforded by the co-beneficiary, 3rd party trustee land trust-net lease arrangement. And nobody had to sue anybody. The trustee and the collection service merely complied with the contract and things went swimmingly.
Be all of that as it may, however, the highlight and delight of my day today is knowing that you used the word “sound” when referring to my baby. Thank you (it took long enough).
Bill Gatten
Re: PACTrust - Posted by DaveR
Posted by DaveR on January 12, 2001 at 16:53:46:
Are you saying that PACTrust is a good or bad thing with that statement? From what I understand, Bill Gatten and William Bronchick get together sometimes to discuss law and trusts and stuff.
Anybody else out there have any comments on this?
DaveR
Re: PACTrust Questoin??? - Posted by ThomasBr@hotmail.com
Posted by ThomasBr@hotmail.com on January 13, 2001 at 16:52:46:
What if the current seller who will become a co-beneficiary runs into financial problems?
Isn’t it possible that other creditor and banks can
put liens against him and the property?
What if that seller decides to file BK during
the terms of the Pactrust?
Re: PACTrust - Posted by Marc in PDX
Posted by Marc in PDX on January 12, 2001 at 20:48:07:
I am not judging it “yea” or “nea” yet. I’m just saying research, research and research. However, I do know that I’m not crazy about the idea that I have to depend on someone out of state, and pay them to boot, to administer the PAC Trust.
Re: PACTrust - Posted by dewCO
Posted by dewCO on January 12, 2001 at 18:10:58:
Can’t speak for either but I don’t think Bill is a total “convert” yet. Bill B. does trusts and he’s an attorney. I think the PACtrust is a “better” trust vehicle, especially for non-attornies. Many here on this site don’t use the PACTrust yet, so don’t know that you’ll get much of a aresponse, but don’t think there’s anything bad. Except to set up the PACTrust is little costly, so I wouldn’t use it on flips, I think Gatten says that too. Super for properties with little or no equity and great for LOs. For what it’s worth.
Answer to PACTrust Question - Posted by Bill Gatten
Posted by Bill Gatten on January 13, 2001 at 17:09:52:
No. These are the very reasons you use the PACTrust in the first place. The co-beneficiary relationship protects the title from either (any) party?s liens, suits, judgment (creditor or tax liens); bankruptcy or marital dispute actions…as well as probate (assuming no breaches of the Statute of Fraud, fraudulent conveyance or uniform regulations pertinent to bankruptcy).
In the unlikely event that a properly drawn co-beneficiary land trust would somehow be declared a general partnership in form, thus enabling charging orders against the beneficiaries individually (and subsequent partition), we recommend that at least one of the parties hold its beneficiary interest as an LLC or Limited Partnership.
Bill Gatten
Re: PACTrust - Posted by dewCO
Posted by dewCO on January 13, 2001 at 20:33:54:
No no! You can close it all yourself. You don’t have to use the entities Bill G. has set up.
Who pays? - Posted by Bud Branstetter
Posted by Bud Branstetter on January 13, 2001 at 01:07:21:
The new Resident beneficiary is the one that pays the cost of administration. Maybe even the seller if they are in a bind. There is a thing about being too greedy. Or deals too skinny to support it.
Most mortgage collections are done with out of state property. What’s the difference? A default happens and a local attorney is hired to evict them if necessary. Get enough down/buyin/contingency and you cut down on the problems.
Then you can become a member and get the editable disk and set up your own entities to do the same things. A local attorney here will be trustee for $100-200. Find a collection service that is willing to do it without pay may be more difficult. Type up all your docs yourself and have your attorney review them. Make a mistake and who pays?
Re: PACTrust - Posted by Bill Gatten
Posted by Bill Gatten on January 13, 2001 at 16:28:10:
Nope Dew, Gatten doesn’t necessary say that. It’s only more costly when you have us do it for you. But so would be a lease option or a Florida sample ballot.
When you do it it yourslef, it costs the same as anything else you do without help. We are merely here if you need us, and as Bill B says, it’s a bit more complex and you may eed us the first few times.
Bill Gatten
Re: Answer to PACTrust Question - Posted by ThomasBR
Posted by ThomasBR on January 13, 2001 at 17:49:43:
Can the investor hold his beneficiary interest in
a business trust entity.
I live in Wisconsin. Business trust affords
protection unmatched by LLC and corporations.
Thanks
Bzzzzt! Wrong answer. Next. - Posted by Bill Gatten
Posted by Bill Gatten on January 13, 2001 at 18:14:41:
Finaal answer? Nope…not an answer at all, but yet another interogatory eh?
Yes, it can. And a land trust works similarly to a busines trust. As a matter-of-fact, its prototype form was once that of a Massachusetts Business Trust.
Bill
Re: Bzzzzt! Wrong answer. Next. - Posted by ThomasBR
Posted by ThomasBR on January 13, 2001 at 18:21:43:
“Finaal answer? Nope…not an answer at all, but yet another interogatory eh?”
What do you mean by this? Which part are you
answering?
Tom
Re: Bzzzzt! Wrong answer. Next. - Posted by Bill Gatten
Posted by Bill Gatten on January 14, 2001 at 15:49:49:
Can the investor hold his beneficiary interest in
a business trust entity?
The answer is yes.
Bill