Trust Question - Posted by Jim (Alaska)

Posted by Jim (Alaska) on February 25, 2000 at 13:03:57:


Trust Question - Posted by Jim (Alaska)

Posted by Jim (Alaska) on February 25, 2000 at 02:01:31:

With such a small population base as we have here, lenders who understand creative financing are few. I have found two that I think I can work with, but came across something that has me puzzled. In all the posts and articles I have read on trusts, the main thrust seems to me “anonimity”, which makes perfect sense to me for all the right reasons.

The lenders I have tried to get financing info from have both talked about wanting to see my “portfolio” of property. According to them, this will help “sell” me to the various people and institutions they deal with. This seems to fly in the face of what I have read regarding trusts.

My question is: Is this something I want to do, or am I better off not mentioning “other properties” and not doing a “portfolio”? It was pointed out that I may have other property that has equity and/or cash flow and this would make me look better financially.

Any ideas?

Thanks for listening, Jim

Re: Trust Question - Posted by JoeB(Atlanta)

Posted by JoeB(Atlanta) on February 25, 2000 at 06:07:51:

Hi Jim, you’re right–one of the main thrusts of trust (try saying that quickly :slight_smile: ) is to provide anonymity from frivolous/unfounded lawsuits where a lawyer first does an asset search to see what you own…to see if you’re ‘fat’ enough to be sued. Usually these lawsuits are instigated by tenants.

The other primary purpose of trusts is to avoid the Due on sale issue.

But–neither of those are an issue when you’re simply showing a ‘portfolio’ to a lender. You just show them all your Profit & Loss or other Financial statements, maybe photos of the houses, etc. If the issue of ownership in a trust comes up, explain that it’s an estate or entity planning vehicle recommended by your attorney/CPA, etc…

I do think it’s a big benefit to be able to show lenders your portfolio and I’m able to do this even while holding title in trusts.

Hope this helps,
Joe Brillante