Win/Win example #4 - Posted by John Behle

import · January 12, 1999, 9:11pm

Posted by David Alexander on January 13, 1999 at 10:00:11:

I’ve been going about looking for Investors the wrong way. Seems you could look for this situation and you would have a motivated Investor to give you money. And at non-agressive rates to boot.

Thanks, for some enlightenment

David Alexander

import · January 12, 1999, 9:11pm

Win/Win example #4 - Posted by John Behle

Posted by John Behle on January 12, 1999 at 22:11:00:

Lady I run into asks me what I do. One of the hardest questions to explain. I usually just say mortgage banker. She says “I hate you guys.” “I can’t sleep at night because of you.” I’ve always wanted a woman to say that to me, but this wasn’t how I envisioned it.

She explained that she had sold a property about year ago at 70% of value with 10% down and a 30 year note (seller financing). She sold it that way because she could not afford any more taxes (sometimes even millionaire property owners don’t get it about taxes and real estate).

Now the buyer had fixed it up a little and was going to sell the property. She couldn’t sleep because of the tax damage she perceived. Her basis was almost zero and she believed she would lose 50% of what she received to Uncle Slam and the Infernal Revenue Service.

I explained to her two ways to avoid her capital gains problems even right now. One involves charitable trusts. One is a technique that I think only I and one other person in my state new - because I had developed it and shared it with him. I call it the “Installment Sandwich”.

I work it out to assume their position in the note and using a substitution of collateral technique, I receive the cash and she maintains the installment sale. I get investment capital at 9% and they save tens of thousands in taxes.

To me that is a Win/Win for everyone but the IRS and I figure it works there too, because I would just as well not see any of us feed their viscious machine (legally) whenever possible.

import · January 13, 1999, 8:22pm

I can’t sleep at night because of you, John… - Posted by Cathryn

Posted by Cathryn on January 13, 1999 at 21:22:20:

I lie awake at night, staring into the darkness and thinking “John Behle…John Behle…gee,that guy knows a lot. If I just keep reading his posts, I may figure out a way to make some money!” LOL

import · January 13, 1999, 9:30am

Who’s the other guy? - Posted by FJW

Posted by FJW on January 13, 1999 at 10:30:43:

Is it Mr. B. Zick?

FJW

import · January 12, 1999, 9:16pm

Re: Win/Win example #4 - Posted by Dan Fink

Posted by Dan Fink on January 12, 1999 at 22:16:46:

John sounds great could you expand your expalnation of the installment sandwitch.

Thanks Dan Fink

import · January 13, 1999, 1:28pm

Wasn’t Barney - Posted by John Behle

Posted by John Behle on January 13, 1999 at 14:28:49:

I don’t know where Barney is at nowadays, but I don’t think it’s in Utah. If anyone gets a chance to learn from him live or through his courses, you’ll be well rewarded.

Barney is by far one of the most creative and intelligent individuals in the field of creative real estate. Very few have anything close to his background or experience.

import · January 12, 1999, 10:25pm

Installment Sandwich - Posted by John Behle

Posted by John Behle on January 12, 1999 at 23:25:04:

Nancy has a note from a property she sold on an installment sale - providing her favorable tax advantages. She is taxed on the money as it comes in. It can avoid a large tax hit all at once and throwing some of the income into a higher bracket.

Peter is paying on the note. He won the lottery. He wants to pay off - causing Nancy a tax problem.

It is possible for me to assume Nancy’s position, receive the cash, deliver the property to Peter free and clear and still maintain Nancy’s tax status of an installment sale.

I buy the note for zero down and then receive a full payoff in cash immediately. The result is I borrow investment capital at the same rate as the rate of the note.

Hard to explain without seeing some illustrations and numbers - nearly impossible to do here.

import · January 15, 1999, 5:01pm

Barney was in Houston at the monthly club meeting. - Posted by HankTX

Posted by HankTX on January 15, 1999 at 18:01:44:

I guess he is travelling to other cities. He
came to the local club meeting on January 2, 1999.
That guy sure is tall. He is funny too. His stuff
was too expensive for me. I had no cash or credit.

-HankTX

import · January 14, 1999, 12:46am

Here’s Barney . . . - Posted by Reif

Posted by Reif on January 14, 1999 at 01:46:44:

Don’t know the man or where he lives but I know where he will be tomorrow (14 January) night - at the San Diego REI club.

Being a newbie, I’ve never been to a meeting but it’s pretty cool that you guys speak so highly of the speaker at the first meeting I will attend.

Reif