Scared to do Lease Options? - Posted by Matt

Re: be careful! - Posted by Innovator

Posted by Innovator on April 15, 2006 at 03:06:54:

Matt,

Since Brad recommends Bill Bronchick’s course on land trusts (because he thinks it is the best!)
I guess I can recommend Bill Gatten, in my option the king of land trusts, (www.landtrust.net).

Brad has never personally pulled the trigger on one land trust deal and most of his advice is right out of the seminars.

I have personally done 12 land trust deals in the last year. I am talking from experience. You decide! I recommend you do your homework, because we are talking big money.

In my opinion, if there is only one beneficiary you lose the unique propensity for converting real property ownership to ownership of personal property, which effectively protects and shields the property?s title: not only hiding it from view, but when multiple beneficiaries are involved, protecting it from litigation. Consequently, the risks and hazards of creative real estate financing are greatly reduced, while investment and home ownership benefits are maximized for the buyer (resident beneficiary), the seller (nonresident beneficiary), the investor (nonresident co-beneficiary), any involved Realtor and even the mortgage lender?whose prompt payments are ensured and backed by more than one person, and which lender?s right of foreclosure remain unaffected by the land trust and the ensuing documentation that comprises the properly constructed land trust. No way does this convolute the structure or leave you without COMPLETE control. If anything it gives you much MORE CONTROL!

David

I agree . . . be careful! - Posted by Brad Crouch

Posted by Brad Crouch on April 15, 2006 at 03:39:20:

Hi bill,

I agree that anyone contemplating using a land trust ought to be
careful! Do your homework and don’t be fooled by anyone elses’
opinion or words. Even mine.

Oh yeah . . . don’t forget to consult with Chicago Title for the straight
scoop.

Brad

P.S. If you are not the sole beneficiary of a land trust, you don’t have
COMPLETE control. It then becomes a “commitee” mentality. Even if
the other beneficiaries give you a power of attorney, this can be easily
revoked. So at best, you would have “limited” control.

Re: I agree . . . be careful! - Posted by spidey

Posted by spidey on April 16, 2006 at 10:58:54:

gee thanks for the warning
Been to court and kicked the person out thats didnt pay the rent . They even had a lawyer review the papers. The lawyer told the person they had no case.

I have read and heard about the land trust. I think it has a different purpose then whats being discussed here and it may worthwhile to have.An example would be if he was getting the property on some type of wrap. Where the person was not getting a new mortgage and then would be concerned with the due on sale.
Again what I disagree with is he idea of having someone that you dont know name on the trust. Which is what you are saying. These people are tenants . If they buy the home then they can get more pieces of paper with their name on it (;
Of course anyone doing this should review this with a local lawyer. Different areas may be more tenant friendly and may be more inclinded to decide the tenant has equity rights. I dont see how a land contract would have any bearing on this. You just want to make sure you have a strong lease option.

Re: I agree . . . be careful! - Posted by Innovator

Posted by Innovator on April 16, 2006 at 02:00:57:

Your P.S. is evidence that you don’t understand the concept of using a properly drawn land trust instead of a lease option to avoid an equitable interest in the property (amoung many other advantages that prevent any act that would cloud the title).

By the way my name is David not Bill!

Re: I agree . . . be careful! - Posted by spidey

Posted by spidey on April 15, 2006 at 19:44:28:

Not sure why this became a trust discussion . I have never done one but I have done l/o’s.
You do not want the tenant buyers (tb) name on anything beside the rental agreement and lease option. This is just common sense.

I don’t believe you! - Posted by Brad Crouch

Posted by Brad Crouch on April 17, 2006 at 13:49:20:

Innovator,

  1. > By the way my name is David not Bill!

I don?t believe that?s true. I believe you are just bill gatten with
another e-mail address.

Bill, your writing style and the words you use, give you away. Also your
animosity that is clearly evidenced in the venom you display (for no
good reason) against me, convinces me that you are indeed gatten. No
one else could be so hateful.

  1. > Brad has never personally pulled the trigger on one land trust
    deal and most of his advice is right out of the seminars.

These are the exact same words that you have used before.

  1. > I only mentioned that a trust was a great solution for the
    equitable interest problem and then the Bull Crouchers had to jump in
    and add a bunch of bull they don’t know anything about because they
    have never done one!

Most posters on this newsgroup try to post accurate information. At
least they think the information they post is accurate. After looking at
several of your posts, I conclude you?re in this category . . . until I
become involved.

And then for some reason, you seem to throw caution to the wind and
begin ?slamming?. In my opinion, this reduces the believability of
whatever else you might say.

You would be well advised to stick to the facts. Whenever there is a
possibility of what you want to say (for whatever reason) being
inaccurate, you have a responsibility to verify accuracy, before you
post.

These are three different statements in three different posts you have
made in the last few days. It HAS to be you, bill!

I?m going to assume that the statements you have made relative to my
experience, are actually believed by you . . . as of the last time I saw
you several years ago. What makes you think those statements are still
true?

Brad

P.S. By the way, are you coming to the convention? I would like to
meet you, face to face.

Re: I agree . . . be careful! - Posted by Innovator

Posted by Innovator on April 16, 2006 at 02:11:04:

In a properly drawn land trust there is no lease option. It is the option agreement that creates the equitable interest danger. You can do all the L/O deals you want and may never have a problem, but that is like riding a motorcycle without a helmet, sometime you could run into an “equitable interest” problem. When it happens you’ll remember my warning!
Common sense or not!

Re: I agree . . . be careful! - Posted by Brad Crouch

Posted by Brad Crouch on April 15, 2006 at 20:30:45:

Spidey,

Matt said he was afraid of the “due on sale” clause. Most folks around
here know that if the DOS is an issue for them, the best way to avoid it
is through the use of a land trust.

This was mentioned, and then innovator decided that extensive
attention was merited, and posted so, recomemending a complex (and
unworthy, in my opinion) trust system.

You are correct in my view, that a tenant buyer’s name should be on
nothing except the lease and option agreements.

Using land trusts is pretty simple, and learning how to use land trusts
is not difficult, either. But they don’t have to involve the renter’s name,
at all . . . unless there is a rental and/or option agreement with the
trust, instead of a “natural” person.

Certainly not as anything other than a tenant or optionee. And
certainly not with a “vote”.

Brad

Re: I don’t believe you! - Posted by Innovator

Posted by Innovator on April 17, 2006 at 23:34:48:

Believe what you want!

My name is David Henderson, I live in Salt Lake City. I use the handle Innovator because that is what I do (I guess I could use the handle Dealmaker). I have never posted on CRE with any other handle. I don’t feel I’m an investor because I do a lot of deals, but never use my own money. I’ve done 12 land trust deals in the last year using Bill Gatten’s NARS program and maybe that’s why my posts sound like they do. I have had “Great” teachers! If you want proof of who I am, E-mail me privately and I’ll prove it. I am “real”!

The reason I have a tendency to “slam” you is because you started it. Everytime I would post anything about land trusts and their benefits you “bad mouthed” what I had to say and called me “one of those Pac Trust guys” as if I was “one of those dummies” that didn’t know what he was talking about. I don’t even use the PAC Trust. The NEHTrust is such a marvelous tool that it is my tool of choice.

When I slammed you I merely pointed out that because you’ve never done a trust deal you are the one that is all talk and you don’t really know the land trust program (a Bull Croucher).

I’m willing to call a truce if you are. You keep bad mouthing me and my program and I’ll continue to return fire! You better know what you are talking about in regards to land trusts (a little real experience would help!).

David B. Henderson

Re: I don’t believe you! - Posted by LeasePurchase

Posted by LeasePurchase on April 17, 2006 at 23:18:53:

Brad, I assure you David is not Bill. David is a friend of mine in Salt Lake City and Mr. G is too classy to post here.

>“By the way, are you coming to the convention? I would like to meet you, face to face”.<

I know Dave is not coming and I don’t know about Bill but to look either one in the face you would first have to get your butt off the couch and stand up. You’re probably better off not looking at either one. They’re both pretty ugly but really smart guys.

Dave would prefer punching you and Bill would forgive you and give you a big hug.

That is also an interesting statement only because in previous posts you said you knew Bill G and used to work for him. Either he has change a lot or you weren’t telling the truth.

Dave has done a dozen deals this year and is working on several more. He must be doing something right, right? Bill is a mad man and is touring the country doing his workshops and positively changing peoples lives.

why beat a dead horse - Posted by LeasePurchase

Posted by LeasePurchase on April 16, 2006 at 14:43:15:

Innovator/Dave

Why are you continuing to beat a dead horse? You and I both know the legal and financial reasons to name the Tenant as a Beneficiary of the Trust.

Brad is correct when he says that Land Trust are really simple things to do. It’s even simplier when you take Legal Short Cuts as he proposes. A short cut is not always a short cut. Look what happened to Little Red Riding Hood.

There is no substitute for the Full Legal Process of Documentation. If the objective is to allow the Tenant the Option, Obligation or Right to purchase down the road then creating a trust and NOT making the Tenant a beneficiary accomplishes nothing. It is still a Lease Option and could expose the property to Lawsuits and claims of Equity.

The only way to total avoid Tenant Claims of Equity and Fully Protect the property from Tenants Creditors Claims is by naming the Tenant a beneficiary of the Trust with the “Right” not the Option or Obligation to purchase at a later date. The Tenant, having nothing more than a Straight Lease from the Trust only would have an interest in the Trust not the property.

An Interest in Trust is only of a Personal Interest and not of Realty. A Creditors Claims, if awarded, may only result in a claim in the way of a Charging Order against the Tenants Personal Interest in the Trust and not a claim or Judgment against the property as would be the case if there were a Lease with Option.

There are also specific Financial and Tax Benefits of naming the Tenant a beneficiary of the Trust. One; increased monthly rent as a result of being able to pass on advantage #2. Two; the ability under section 163 4(h)d of the IRS Code to pass on Active Tax Benefits to the Tenant, who as an Owner Beneficiary and by way of a Triple NET Lease is 100% responsible for all PITI and Maintenence. By being able to pass on Active Tax Benefits to the Tenant it allows you the Investor to collect more than normal Fair Market Rents while reducing the Tenants Net Rent and increasing your positive cash flow.

Of course there are a myriad of other benefits and advantages of naming the Tenant a beneficiary of the Trust but this Horse is now dead and either can’t or doesn’t want to hear them anyway.

Of course this is only coming from someone who has only done several hundred transactions using both Lease Options and Properly Prepared Beneficiary Directed Land Trusts.

Re: I don’t believe you! - Posted by Brad Crouch

Posted by Brad Crouch on April 18, 2006 at 19:27:24:

Hello David,

> Believe what you want!

> My name is David Henderson, I live in Salt Lake City. I use the
> handle Innovator because that is what I do (I guess I could use the
> handle Dealmaker). I have never posted on CRE with any other
> handle.

Well, I guess I was wrong about you being bill gatten. I could of sworn
. . .

> The reason I have a tendency to “slam” you is because you started it.
> Everytime I would post anything about land trusts and their benefits
> you “bad mouthed” what I had to say and called me “one of those Pac
> Trust guys” as if I was “one of those dummies” that didn’t know what
> he was talking about. I don’t even use the PAC Trust. The NEHTrust
> is such a marvelous tool that it is my tool of choice.

Before I go any further, I’d like to let you know that I am a big fan of
using land trusts. I can think of no reason NOT to use them, unless
you’re going to hold a property for less than 6 months. And
sometimes it is better to use them even then, depending on the
method of conveyance desired. It is definitely cheaper (if you care, in a
given instance) to assign beneficial interest than to pay (or have
someone pay) for new loan fees.

I AM sorry that I made you feel this was something personal. I don’t
even know you, so I assure you it wasn’t personal. My beef is not with
you, but bill gatten. To tell the truth, I am not “totally” against the
PACTrust (apparently now modified and known as the NEHTrust),
although I DO have some reservations about the legality of some of the
methods used. I DO find it annoying that you are continually talking
about a “properly structured” land trust as though the only way a
“properly structured” land trust can be used is to adopt the methods of
NARS.

Take Disneyland for example . . . do you want to be the one who tells
them they don’t have a “properly structured” land trust? You know, the
Disneyland that holds millions of dollars worth of real state? They have
successfully held that property for many years now. That land trust
was created before NARS was even thought of. Just an educated guess,
but I would think they have a “properly structured” land trust.

I think that you have bought into SOME stuff, simply because that’s
what was taught. Which speaks directly to my point that everything
that is taught, is not ALWAYS right.

I realize that you and your buddy (Lease Purchase) think that you know
gatten pretty well, but I’m afraid you don’t know him as well as you
think you do. I know him much better. I was one of the original
students after bill decided to drop the classes for real estate agents
and “go for” the investors. Which was long before the National
Marketing campaign began. In those days, all we had was the
PACTrust and it was only local . . . and I was one of the most
enthusiastic and loudest voices present. I went to no less than a dozen
of bill’s seminars and was one of the primary sources for PACTrust
information.

In fact there was a time when bill referred to me as “his very good
friend”.

I am the first one to give respect to someone who exhibits integrity,
but that respect quickly dies if and when I am presented with evidence
to the contrary.

When I first became disillusioned with bill gatten, I threw out all the
materials I had pertaining to the PACTrust and Cal Equity (now known
as NARS), and told anyone who asked that I was no longer associated
with the organization . . . and no more than that. But bill wanted more!
He wanted me to continue recommending his product, and failing that,
he wanted me to stop posting about land trusts. Of course I refused. I
also refuse to EVER do business with either bill or his company. I only
do business with people I trust.

He began bothering me with private e-mail, and I finally had to create
a “twit list” to screen and reject his e-mails. Then he began attacking
me on the newsgroups. I finally gave him a choice of leaving me alone
(and I would continue to keep my silence), or he could continue and I
would be relentless in my attempt to expose him. He chose to keep on
with his personal attacks, so I have made it my mission in life to show
folks that everything is not ALWAYS as they may appear. So actually,
bill has brought this all on, himself. I believe it’s called “ego”.

There is much more to this that what I have written about here, but the
rest is more appropriate for a one-on-one conversation, than it is for
this note.

> I’m willing to call a truce if you are. You keep bad mouthing me and
> my program and I’ll continue to return fire!

This is O.K. with me . . . I will make the distinction in any future posts I
may make, that YOU are not the “bad guy” but you have to understand
that I am not abandoning my mission with regard to bill gatten or his
products (your program).

I believe bill gatten is a slime ball . . . and if that offends you, I’m sorry.
But that’s the way it is. Although it may be commendable if he
currently displays the illusion of truth, honesty and integrity, he is still
the same guy who’s currently “in charge” as before, in the “PACTrust
only” days. Lessons that may have been learned do not indicate a
“cure”.

Take care David,

Brad

P.S. In the spirit of attempting to make a helpful suggestion, I have
something to add: David, you have GOT to find a way to stop taking
this stuff “personally”. While you’re reading material that you normally
take personally, just tell yourself, “This a$$ hole would be saying the
same thing to ANYBODY in my position, and it really doesn’t matter
that’s it just happens to be me, at the moment”. Guess how I learned
that? :slight_smile:

Thanks LeasePurchase! - Posted by Innovator

Posted by Innovator on April 17, 2006 at 23:44:58:

I might add: I’m 6’4", 350 lbs., a former football player, raised in Butte, MT (redneck) and in spite of what LeasePurchase says I’m pretty handsome!

Great Post! - Posted by Innovator

Posted by Innovator on April 16, 2006 at 22:35:36:

This is a good post to continue the trust discussion. I was not flogging a dead horse. My orginal intent was to warn Matt that DOS was not his big problem, but he should be aware of the equitable interest problem that could happen in a L/O deal.

I only mentioned that a trust was a great solution for the equitable interest problem and then the Bull Crouchers had to jump in and add a bunch of bull they don’t know anything about because they have never done one!

LeasePurchase, I’m not continuing to beat a dead horse? This is the end of my warning, they will remember the warning when it happens to them! I?m just the messenger who is concerned about this happening to some poor unsuspecting sole who has bought into these seminar gurus, (90% of whom haven’t bought a stick of anything in their lives, we call them Bull Crouchers) misleading information.

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Re: Thanks LeasePurchase! - Posted by LeasePurchase

Posted by LeasePurchase on April 19, 2006 at 09:54:19:

Ok, so you’re the sexiest fat man I know. But don’t get any ideas. I don’t care if you’re from Montana and loved Broke Back Mountain. Cowboys ain’t my thing. Now if you’re talk’in Cowgirls, as in my wife, now you got somet’in pardner.