By Bill J. Gatten, Author of the run-away best seller, “No Down! No New Loan!” (i.e., THIS author’s best seller that is)
For interest’s sake, the following is a recent letter to network members who suggested that he might want to reconsider using the NEHTrust or PACTrust because it takes longer to facilitate and close than does a L/O or Wrap. Well…being the thin-skinned meek little (sweet) jelly muffin I am, I suggested that if he didn’t want it done right, I couldn’t help him; but that if he did want it done right it would take more time than most other creative financing schemes (L/O/s CFD’s, Wraps, Equity Shares, etc.).
Our motto around here is: You can pick any two (but only two) from the list below, and we'll be your Huckleberry…
1) Have it Done Properly
2) Have it Done Quickly
3) Have it Done Cheaply
So…after it was suggested that we shouldn’t take such criticisms so personally, I responded with the following:
Yup…I do take personally anything that has to do with the safety and well being of your business and/or mine. My business is ME, and my products and services are 100% ME: and [product or service comprises my very alter ego to the nth degree (to the bone, as it were). And, hey, that's not a bad thing though, because that quality within me is what keeps me and all my students and clients out of court and out of jail.
As well (I continued), I do understand your frustration Elmo, (“Elmo T. Flopenenwaller”) and I am willing to work through it with you with any constructive suggestions you might have for improvement: but in the meantime, you MUST understand that certain processes simply may not be avoided or compromised. If we allowed that, we could not hold ourselves responsible for these transactions and keep you and your clients out of serious trouble later on down the line.
The entire process comprising the Third Party Co-Beneficiary Transaction (PACTrust™ or NEHTrust™) is as follows (I have given reasonable time spreads for the number of workdays that might be (could be) involved in each of the steps or phases which comprise the documentation process...variations in mailing and shipping times and weekends and intervening holidays notwithstanding:
1. Fist, your clock starts ticking (though ours doesn’t yet) when you meet with you client and get their acceptance of your proposal – 1 – 2 DAYS
2. Next you obtain all the appropriate information and send it to us (or have us obtain it for you). 1,2 3 OR MORE DAYS has usually gone by since your original contact) – 1 DAY
3. Next, you compile and forward us Appendices 1 through 5 completed (if not completed accurately or fully, add another day or two for us to round-up all the information we need for data input) - 1-2 DAYS
4. Our data input and document formatting is completed (3 or more hours of work), whereupon the initial land trust is created and sent to legal for review and to PAC or Equity Holdings for holding once the signed original is received following COE) - this serves as notice to collections and the trustee that the transaction is in process and entering Escrow within the next 1-2 days, and for them to get their procedures in line to receive the new project when Escrow closes - 1-2 DAYS FOR INPUT AND FORWARDING
5. A Verification of Data (VOD) report is then sent to you (the investor) for review. At this point nothing is sent to the parties until you have personally approved and verified that the figures are accurate and that no information is being given to anyone that shouldn't see or have it (e.g., your acquisition price, mo payments, initial work-out arrangements, etc.). We then have to wait up to 48 hours for a return or acceptance of the VOD: though we will proceed without you if we haven't heard from you in 48 hours - 2-3 DAYS
6. When your VOD has been signed and returned to our office, or when your 48 hours are up, we then draw First Drafts. At that point if no corrections are necessary (‘happens VERY rarely), then the first drafts are individually forwarded to all parties (by regular or overnight mail, unless we are instructed differently): Allow for 2 days to delivery and 2 days for return or verification - 4-5 DAYS
7. When all drafts have been returned with corrections or acknowledged to be OK as is (happens rarely), we then either -- 1) complete and forward 2nd drafts (if corrections were made) – 2-3 DAYS; or 2) proceed to final documentation (if no corrections were required) – 1-2 DAYS. All final documents are forwarded (by overnight mails or PDF computer file) to Escrow - 1-2 DAYS
8. Any additional verbiage in the Rider Agreement or in related documents (other than boilerplate) must be run though our legal department (outside law firm) for review and approval - 1-3 days (depending upon attorney's case load)
9. Following legal review, documents are forwarded to Escrow, who then prepares the Settlement Statements and any other necessary documents simultaneously with their Escrow Instructions for shipping. 2 DAYS
10. At this point Escrow either arranges for a sit-down closing in the client’s area, or (if preferred) documents are sent Over Night for execution in counter-part for return to Escrow for final review and approval of completeness. The documents have then to be signed notarized and returned to Escrow by the US Mail, Fed Ex or UPS – WHOLE PROCESS CAN TAKE 6-7 DAYS
11. When everything is back in Escrow’s hands--if no mistakes have been made—the final title search is run and the deed is sent by messenger for recording in the local area (US Mail, Fed Ex or UPS): all monies are then distributed (checks cut) to the appropriate parties and the Escrow is closed - 1-4 DAYS (depending upon time-of-day materials are received and/or mailed out by Escrow)
12. Upon their receipt by Escrow, all original signed documents are reviewed for correctness and forwarded (Overnight Mails) to PAC or Equity Holdings and to NARS for final set-up of the Holding and Collections files. PAC then sends a Welcome Letter and remittance instructions…and voila, the transaction is finalized - (ANOTHER 1 - 2 days).
Now, Understand CLEARLY that IF at any point along the way a mistake is made and not caught soon enough, it may become necessary to redraft certain documents (e.g., if the MAV were not stated correctly in the beginning, or if payments were not calculated properly, or if a key profit center wasn’t clearly defined in the beginning…or new Rider information were to requested, etc.)
Ways to shorten the processing time or your transaction:
1) Make sure all “I’s” are crossed and all “T’s” are dotted on the original worksheets (Appendices #1 thru #5) when you send them to us
2) Verify and clear all anticipated charges through NARS (Appendix 4) first, before sending in the worksheets (Appendices #1 thru #5).
3) Assure that all start-up moneys (Retainer Fee and Good Faith Escrow Deposit) accompany your order for documentation; and assure that the Retainer Fee Agreement is properly signed and dated when we receive your package. We can not start without a signed and paid Retainer Fee Agreement
4) Provide NARS with a good and valid Legal Description of the property along with your order for documentation and facilitation (full Lot, Tract, Map Book, Page, Plat, Parcel, Assessor’s I.D. Number, etc.) at start. If we have to order it, it can add 2-3 or more days onto the turn-around time.
5) Volunteer to handle the walk-in and recording of the transfer document (deed) yourself once it has been signed and notarized by the transferor (state that you will do that in a note with your documentation order)
6) Handle all mailings by overnight or express mail
7) Be prompt in reviewing and returning VOD’s, drafts, corrections, changes or amendments by Fax. And, above all, be explicit enough in your notation (re. variations from standard documentation) that you do not have to be contacted for clarification
8) Be as brief as possible, but complete (i.e., be succinct) in all written (faxed or E-mailed) correspondence.
9) Volunteer to handle the final signing of documents yourself in your office (must have a Notary standing by) so that clients can’t dawdle and procrastinate.
10) Never be mean to anyone in the NARS documentation department (but do not send candy or flowers alone…cold hard cash and booze bribes seem to work best).
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, December 27, 2007
Thursday, December 20, 2007
Big Fat “Lies” To Tell So You Can Have Your Way In The Creative Real Estate Business
By - Bill J. Gatten
Have you ever ridden a roller coaster? Did you ever stop to think why someone would do that just for the thrill of it, but they wouldn't want to ride in a rattling little jalopy going the same speed on a winding mountain road of the same track-width, with sheer 200 foot drops on both sides…while someone they never met did the driving?
Well, the answer is obviously that one is real and dangerous, while the other is real but not dangerous. On the roller coaster you can have the thrill of fear with a predictable safe outcome, rather than experiencing fear with death being a potential (if not probable) outcome. The squeals and screeches emanating from the roller coaster ride are usually articulated through gleeful smiles and feigned contortions of the face, followed with “Wheeeee!” or “Whoopee!” or “Yaaaaagh!” Whereas on the narrow mountain-road in the out of control jalopy, the screams are sincerely generated and followed with a loud tapering-off exclamation, possibly like: “Oh…sh………..…!”
Now take prevarication (lying) as another example…that's another fun and dangerous pursuit more popular with some than others, which invariably wreaks disastrous results (e.g., shame, a whack on the head, a poke in the eye, jail time, loss of respect, loss of friends, destroyed
future, etc.). But have you ever secretly wondered what it might be like to have a “license to lie”…tell big ol' fat bold-faced mendacities all day long…say, for just one day, in order to get what you want out of people, while not risking any damage to your good name or your Karma. Wouldn't it be great to have that privilege, but to know in advance that all the lies you told that day would actually turn out be the God's Honest Truth by the end of the day? Would that be cool, or what?
Well, let's try a little experiment. Here are some of the wildest lies imaginable that one could tell in order to acquire, control, sell or lease real estate. Let's see how many of them could be made to fly (i.e., actually become the truth at the end of the day) via the use of the
North American Realty Services Equity Holding Trust Transfer System™ (the “NEHTrust™). And remember…none of these statements have to be true.
As of right now, there's a day long moratorium on honesty…these assertions are simply what you might say—true or not—in order to get your way. Accept them as flat-out lies, and ask yourself…”What other baloney could I spew to get some houses”; or ”If this lie were in-fact told, would it get me what I want?” Also know that your objective is to acquire that property, or the control of it at any cost…but with no cost to you. Now, remember, in this role you're also flat broke and your credit stinks.
For The Landlord Whose Property You Would Like To Control
Mr. Landlord...I saw your 'For Rent' ad (sign), and if I can have the opportunity to buy the place from you in a few years…
• I'll pay you more than your asking for rent
• I'll pay all your maintenance costs during the rental agreement
• I'll cover all your property tax expense while I rent from you
• I'll cover all your management costs during our agreement
• I'll eliminate all of your negative cash flow
• I'll take 100% responsibility for the property and everything associated with it
• I'll put in a 3rd party tenant for you, and guarantee his rent and performance 100%
• I'll set our arrangement up so that the property and the title are shielded from bankruptcy, tax liens, creditor claims, probate, or marital dissolution legal actions on your part
• I'll eliminate all of your negative cash flow
• I'll put an end to all possibilities for Vacancies
• I'll completely annihilate all landlording woes and headaches for you—forever
• And, sure, you bet I have all the cash needed for the deal
For the 'For Sale By Owner’
Mr. FSBO. I saw your For Sale by Owner” ad (sign), and if you can stay on the loan a while longer, say for a couple years, and leave your equity in until then, I'll buy the place from you today for full value. And not only that, but…
• I'll pay you more for the property than your asking
• I'll even pay more for the property than it's worth
• I'll take over all payment responsibilities without even going on title
• I'll pay you the full value for your home, townhouse or condo and give you all cash
• I'll pay you full price-- 1) all cash, or 2) buy for a higher price on your terms
• I'll preserve and protect all of your existing equity
• I'll pay all maintenance costs
• I'll pay all property tax expense
• I'll buy the property from you today, but let you keep half of my appreciation and principal reduction over the next 5 years
• I'll buy your house and put you into another one with only minimal up-front cost and no credit check
• I'll buy your house and put you into another one with no down payment
• I'll buy your house and give you a letter than will allow you a 100 percent Debt-to-Income Ratio credit on you next mortgage loan
• I'll arrange it so that you can stay on the loan and give me the benefits of ownership without a Due-on-Sale Clause violation
• I'll never need to be on your title
• I'll protect your from any liens, suit or creditor judgment that could befall me
• We can close in a week (if the Escrow and documentation process doesn't slow me down)
• I'll cover all back payments; clear up and re-establish your credit with your lender (re. arrearages, back taxes and penalties)
• And, sure I have all the cash needed for the deal
Bold-Faced Lies You Can Tell A Tenant/Buyer To Manipulate Him/Her As Well
Dear Mr. & Mrs. Tenant/Buyer…thanks for calling. Through me and my special know-how and broad range of brilliant expertise…
• You can lease the property with a full tax write-off
• You can buy the property without a credit application
• You can buy the property without a new bank loan
• You can buy the property without a down payment
• You can put your closing costs on a credit card
• You can be just a renter, but still participate in it's appreciation, mortgage loan principal reduction and tax write-off
• You can own the property without great or even "good" credit
• You can own the property, versus renting, and pay less than you would to rent it
• You can enjoys all the benefits of homeownership without further scrimping and saving
• You can live virtually rent-free, given reasonable appreciation over time
• You can buy now with all benefits of homeownership now, but finance later when/if you feel like it
• You can have 100% of the benefits of Fee Simple real estate ownership, including tax write-off, and never have to be on title (thereby protecting your home from the threat of litigation of all types)
• And, nope, you don’t need a lot of cash for the deal
OK…now, the day is done and the jig's up (a phrase, the origin of which I wonder about a lot)! All your big fat lies have to suddenly become truths now. Well, if you were planning on utilizing the Equity Holding Trust System (NEHTrust or NEHTrust)…then everything said above is in-fact all true…plain and simple!
Go back and check it out: every one of these promises is fulfilled through the NARS Equity Holding Trust Transfer System™ every day.
I'd dare anyone to try to convert ALL the above statements to truths when using any 'other' creative financing vehicle: lease, option, purchase option, wrap, contract for deed, equity share, subject-to, short-sale, etc..
You might want to give this one a lot of thought folks.
Bill
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Have you ever ridden a roller coaster? Did you ever stop to think why someone would do that just for the thrill of it, but they wouldn't want to ride in a rattling little jalopy going the same speed on a winding mountain road of the same track-width, with sheer 200 foot drops on both sides…while someone they never met did the driving?
Well, the answer is obviously that one is real and dangerous, while the other is real but not dangerous. On the roller coaster you can have the thrill of fear with a predictable safe outcome, rather than experiencing fear with death being a potential (if not probable) outcome. The squeals and screeches emanating from the roller coaster ride are usually articulated through gleeful smiles and feigned contortions of the face, followed with “Wheeeee!” or “Whoopee!” or “Yaaaaagh!” Whereas on the narrow mountain-road in the out of control jalopy, the screams are sincerely generated and followed with a loud tapering-off exclamation, possibly like: “Oh…sh………..…!”
Now take prevarication (lying) as another example…that's another fun and dangerous pursuit more popular with some than others, which invariably wreaks disastrous results (e.g., shame, a whack on the head, a poke in the eye, jail time, loss of respect, loss of friends, destroyed
future, etc.). But have you ever secretly wondered what it might be like to have a “license to lie”…tell big ol' fat bold-faced mendacities all day long…say, for just one day, in order to get what you want out of people, while not risking any damage to your good name or your Karma. Wouldn't it be great to have that privilege, but to know in advance that all the lies you told that day would actually turn out be the God's Honest Truth by the end of the day? Would that be cool, or what?
Well, let's try a little experiment. Here are some of the wildest lies imaginable that one could tell in order to acquire, control, sell or lease real estate. Let's see how many of them could be made to fly (i.e., actually become the truth at the end of the day) via the use of the
North American Realty Services Equity Holding Trust Transfer System™ (the “NEHTrust™). And remember…none of these statements have to be true.
As of right now, there's a day long moratorium on honesty…these assertions are simply what you might say—true or not—in order to get your way. Accept them as flat-out lies, and ask yourself…”What other baloney could I spew to get some houses”; or ”If this lie were in-fact told, would it get me what I want?” Also know that your objective is to acquire that property, or the control of it at any cost…but with no cost to you. Now, remember, in this role you're also flat broke and your credit stinks.
For The Landlord Whose Property You Would Like To Control
Mr. Landlord...I saw your 'For Rent' ad (sign), and if I can have the opportunity to buy the place from you in a few years…
• I'll pay you more than your asking for rent
• I'll pay all your maintenance costs during the rental agreement
• I'll cover all your property tax expense while I rent from you
• I'll cover all your management costs during our agreement
• I'll eliminate all of your negative cash flow
• I'll take 100% responsibility for the property and everything associated with it
• I'll put in a 3rd party tenant for you, and guarantee his rent and performance 100%
• I'll set our arrangement up so that the property and the title are shielded from bankruptcy, tax liens, creditor claims, probate, or marital dissolution legal actions on your part
• I'll eliminate all of your negative cash flow
• I'll put an end to all possibilities for Vacancies
• I'll completely annihilate all landlording woes and headaches for you—forever
• And, sure, you bet I have all the cash needed for the deal
For the 'For Sale By Owner’
Mr. FSBO. I saw your For Sale by Owner” ad (sign), and if you can stay on the loan a while longer, say for a couple years, and leave your equity in until then, I'll buy the place from you today for full value. And not only that, but…
• I'll pay you more for the property than your asking
• I'll even pay more for the property than it's worth
• I'll take over all payment responsibilities without even going on title
• I'll pay you the full value for your home, townhouse or condo and give you all cash
• I'll pay you full price-- 1) all cash, or 2) buy for a higher price on your terms
• I'll preserve and protect all of your existing equity
• I'll pay all maintenance costs
• I'll pay all property tax expense
• I'll buy the property from you today, but let you keep half of my appreciation and principal reduction over the next 5 years
• I'll buy your house and put you into another one with only minimal up-front cost and no credit check
• I'll buy your house and put you into another one with no down payment
• I'll buy your house and give you a letter than will allow you a 100 percent Debt-to-Income Ratio credit on you next mortgage loan
• I'll arrange it so that you can stay on the loan and give me the benefits of ownership without a Due-on-Sale Clause violation
• I'll never need to be on your title
• I'll protect your from any liens, suit or creditor judgment that could befall me
• We can close in a week (if the Escrow and documentation process doesn't slow me down)
• I'll cover all back payments; clear up and re-establish your credit with your lender (re. arrearages, back taxes and penalties)
• And, sure I have all the cash needed for the deal
Bold-Faced Lies You Can Tell A Tenant/Buyer To Manipulate Him/Her As Well
Dear Mr. & Mrs. Tenant/Buyer…thanks for calling. Through me and my special know-how and broad range of brilliant expertise…
• You can lease the property with a full tax write-off
• You can buy the property without a credit application
• You can buy the property without a new bank loan
• You can buy the property without a down payment
• You can put your closing costs on a credit card
• You can be just a renter, but still participate in it's appreciation, mortgage loan principal reduction and tax write-off
• You can own the property without great or even "good" credit
• You can own the property, versus renting, and pay less than you would to rent it
• You can enjoys all the benefits of homeownership without further scrimping and saving
• You can live virtually rent-free, given reasonable appreciation over time
• You can buy now with all benefits of homeownership now, but finance later when/if you feel like it
• You can have 100% of the benefits of Fee Simple real estate ownership, including tax write-off, and never have to be on title (thereby protecting your home from the threat of litigation of all types)
• And, nope, you don’t need a lot of cash for the deal
OK…now, the day is done and the jig's up (a phrase, the origin of which I wonder about a lot)! All your big fat lies have to suddenly become truths now. Well, if you were planning on utilizing the Equity Holding Trust System (NEHTrust or NEHTrust)…then everything said above is in-fact all true…plain and simple!
Go back and check it out: every one of these promises is fulfilled through the NARS Equity Holding Trust Transfer System™ every day.
I'd dare anyone to try to convert ALL the above statements to truths when using any 'other' creative financing vehicle: lease, option, purchase option, wrap, contract for deed, equity share, subject-to, short-sale, etc..
You might want to give this one a lot of thought folks.
Bill
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, December 13, 2007
Bend with the Trend - The PACTrust™ to the Rescue
Bill J. Gatten
A tough question posed recently by a would-be investor in the East: "Where I live there hasn't been any appreciation in real estate for several years now. If I truly want to pursue being a real estate investor, should I move elsewhere, or wait for the market to turn?
To some this might seem a reasonable question; however, my response was: "Stay put! Empowering such bogus rationale is what keeps the millionaire ranks as low in number as they are."
The key to creative real estate investing is to have a plan that adapts quickly to ANY market…it doesn't matter which direction market dynamics flow, the force is still there: water flows east with the same strength as when it runs west. In a "down" market, there are few willing buyers; but obtainable properties abound, and they're all for sale at the best prices. In an "Up" market there may be fewer "easily" obtainable properties: but there are more buyers, and they'll do just about anything you want in order to get in on the action.
The fact is that market dynamics in creative real estate have always required "thinking outside the box." The true CRE entrepreneur lives with, copes with, and makes his/her living with that fact. Think about it…a fisherman who goes fishing armed only with catfish bait, most probably won't catch trout. All he can expect to bring home is catfish…if they're biting that day. If the catfish aren't hungry the fisherman will be. On the other hand, the serious and well-studied angler, carries a "full" tackle box, so that when the catfish aren't biting, he can hook up for trout, bass, walleye…or a sperm whale, if he wants to…at a moment's notice.
Understand that when real estate appreciation trends are up, a seller's market prevails: sellers set high prices and hang in there till they get them. On the other hand, when appreciation is down or stagnant, that's a buyer's market: fewer properties are available and sales are sparse. It's during these downtimes that most folks are counting pennies and digging in for a long winter, than looking for a new home. In other words, a Seller's market pushes prices and circumstances toward the seller's benefit; whereas a Buyer's Market pulls everything down to suit the buyer's needs. But none of this should be a concern of the well-studied CRE investor. In an up market you sell, in a down market you buy and hold.
During our last major downturn here in California, a common cry was: "Help! Houses are a dime a dozen, but I can't find any buyers." But now that the market has turned, the current entreaty is, "Help! Buyers are everywhere, but I can't find any houses!" And (for the most part) whom do you suppose these two disparate plaintive cries come from? Right! Exactly the same people: those who choose to blame their own shortcomings on market condition, having failed to plan to "bend with the trend (as it were)."
To excel in any market, we need education…and tools that work in all circumstances. In a seller's market, we must be able to attract and serve buyers who would love to climb on the home-buying bandwagon, but who haven't yet saved up the cash or garnered the credit to do so. In a buyer's market, that knowledge and those same tools must attract sellers of no, low, or negative equity properties; fixer-uppers; distress sales; NOD filings; and "hard-to-moves"…while simultaneously wedging us, the investor, into the middle.
This is where the NARS PACTrust™ comes in. The PACTrust™ is a third-party title-holding land trust system, which works virtual wonders in any market (see advertising here in CRE). With this remarkable tool, the existing loan stays in place without a due-on-sale compromise; full income tax write-off is transferred to the tenant (in exchange for much higher payments); the property is shielded from creditor judgements, tax liens, law suits, bankruptcy action and marital disputes. Think of it…no down payment, no bank qualifying; no payments; no expenses. This is creative real estate investing!
Imagine telling a seller who is reticent about "carrying," that he needn't transfer the title to you until you can sell or refinance in the future. Or that he needn't worry about liens, suits, judgements or personal problems ever compromising the property's title while he remains on the loan (nor do you need to worry about such occurrences on his behalf).
The PACTrust™ gives your tenant full tax write-off in exchange for paying (your) full mortgage, property tax and insurance. For a share in future appreciation potential, they'll gladly paying 100% of the (your) maintenance, repair and management costs. In other words:
"Mr. Buyer, if you can afford the payments (which include a few hundred positive cash-flow for me) and a few thousand dollars in closing costs (most of which goes into my pocket)… I'll give you the property. The only thing I want out of it all, is to be assured that you'll refinance in a few years--at which time, if there's been any appreciation, I'd like to split it with you."
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
A tough question posed recently by a would-be investor in the East: "Where I live there hasn't been any appreciation in real estate for several years now. If I truly want to pursue being a real estate investor, should I move elsewhere, or wait for the market to turn?
To some this might seem a reasonable question; however, my response was: "Stay put! Empowering such bogus rationale is what keeps the millionaire ranks as low in number as they are."
The key to creative real estate investing is to have a plan that adapts quickly to ANY market…it doesn't matter which direction market dynamics flow, the force is still there: water flows east with the same strength as when it runs west. In a "down" market, there are few willing buyers; but obtainable properties abound, and they're all for sale at the best prices. In an "Up" market there may be fewer "easily" obtainable properties: but there are more buyers, and they'll do just about anything you want in order to get in on the action.
The fact is that market dynamics in creative real estate have always required "thinking outside the box." The true CRE entrepreneur lives with, copes with, and makes his/her living with that fact. Think about it…a fisherman who goes fishing armed only with catfish bait, most probably won't catch trout. All he can expect to bring home is catfish…if they're biting that day. If the catfish aren't hungry the fisherman will be. On the other hand, the serious and well-studied angler, carries a "full" tackle box, so that when the catfish aren't biting, he can hook up for trout, bass, walleye…or a sperm whale, if he wants to…at a moment's notice.
Understand that when real estate appreciation trends are up, a seller's market prevails: sellers set high prices and hang in there till they get them. On the other hand, when appreciation is down or stagnant, that's a buyer's market: fewer properties are available and sales are sparse. It's during these downtimes that most folks are counting pennies and digging in for a long winter, than looking for a new home. In other words, a Seller's market pushes prices and circumstances toward the seller's benefit; whereas a Buyer's Market pulls everything down to suit the buyer's needs. But none of this should be a concern of the well-studied CRE investor. In an up market you sell, in a down market you buy and hold.
During our last major downturn here in California, a common cry was: "Help! Houses are a dime a dozen, but I can't find any buyers." But now that the market has turned, the current entreaty is, "Help! Buyers are everywhere, but I can't find any houses!" And (for the most part) whom do you suppose these two disparate plaintive cries come from? Right! Exactly the same people: those who choose to blame their own shortcomings on market condition, having failed to plan to "bend with the trend (as it were)."
To excel in any market, we need education…and tools that work in all circumstances. In a seller's market, we must be able to attract and serve buyers who would love to climb on the home-buying bandwagon, but who haven't yet saved up the cash or garnered the credit to do so. In a buyer's market, that knowledge and those same tools must attract sellers of no, low, or negative equity properties; fixer-uppers; distress sales; NOD filings; and "hard-to-moves"…while simultaneously wedging us, the investor, into the middle.
This is where the NARS PACTrust™ comes in. The PACTrust™ is a third-party title-holding land trust system, which works virtual wonders in any market (see advertising here in CRE). With this remarkable tool, the existing loan stays in place without a due-on-sale compromise; full income tax write-off is transferred to the tenant (in exchange for much higher payments); the property is shielded from creditor judgements, tax liens, law suits, bankruptcy action and marital disputes. Think of it…no down payment, no bank qualifying; no payments; no expenses. This is creative real estate investing!
Imagine telling a seller who is reticent about "carrying," that he needn't transfer the title to you until you can sell or refinance in the future. Or that he needn't worry about liens, suits, judgements or personal problems ever compromising the property's title while he remains on the loan (nor do you need to worry about such occurrences on his behalf).
The PACTrust™ gives your tenant full tax write-off in exchange for paying (your) full mortgage, property tax and insurance. For a share in future appreciation potential, they'll gladly paying 100% of the (your) maintenance, repair and management costs. In other words:
"Mr. Buyer, if you can afford the payments (which include a few hundred positive cash-flow for me) and a few thousand dollars in closing costs (most of which goes into my pocket)… I'll give you the property. The only thing I want out of it all, is to be assured that you'll refinance in a few years--at which time, if there's been any appreciation, I'd like to split it with you."
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, December 6, 2007
THE QUESTION:
Because I think it's in the millions, I haven’t called on this ad. It’s been in the newspaper for the last several weeks,
What would you do Bill? Would you call anyway? And if so, how do you deal with that expensive a property?
The ad reads: "Fantastic ocean front property in Del Mar, Ca. 2 owners in 63 years. Illness forces sale. Call now!"
Regards,
Julie
THE GATTEN RESPONSE:
Julie, since when is “what you ‘think," prior to a prospecting call, of the slightest importance? And what if the property IS in "the millions?" Do you honestly have an aversion to owning a multi-million dollar property with no loan, no bank qualifying, no cost to you, no payments by you and no risk?
Immediately call and ask the poor sick seller if he or she would consider--for a full price offer--staying on the existing loan for a while, during which time you and your "partner (your resident beneficiary)" will take over all costs and on-going expenses of payments, management, repairs, upkeep, property tax and insurance...in exchange for being able to retire the loan in, say, 3 to 5 (or ?) years, at the end of which time you will repay the sellers 100% of their currently existing equity. This gets them full price, builds a net egg and defers capital gains taxes (which could be in the hundreds of thousands of dollars if your value assumption is correct).
Sandy, I really need to tell you the following story (I think you’ll see why):
Several years ago a woman was given a brand new free and clear Porsche 911 in a divorce settlement, but a caveat in the settlement was that she was allowed to drive it only for six months. At the end of her allotted time, the six months, she was ordered by the court to sell the car for any amount she wanted to, but she had to turn over 100% of the proceeds to her ex-husband, for whom she apparently harbored some disdain (‘been there, ‘done that…’know the feeling. Even all these year later I am still referred to as what sounds like a “bass pole”…whatever that means…I don’t even fish).
After the woman’s allotted six months were up, she placed an ad in the San Francisco Chronicle that read: "For Sale. One year-old Porsche Targa 911. $1.00. Call now. Won't last."
Sandy, do you know that it took two days before someone finally called on that ad and bought the car for a dollar (about $50,000 worth of car)? At least a half million people saw the ad and didn't call because of having formulated a limiting falsehood in their heads that started out: "...because I 'think'..."
Don't EVER do that again! I know where you live. Don’t MAKE me come over there!
Bill
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Because I think it's in the millions, I haven’t called on this ad. It’s been in the newspaper for the last several weeks,
What would you do Bill? Would you call anyway? And if so, how do you deal with that expensive a property?
The ad reads: "Fantastic ocean front property in Del Mar, Ca. 2 owners in 63 years. Illness forces sale. Call now!"
Regards,
Julie
THE GATTEN RESPONSE:
Julie, since when is “what you ‘think," prior to a prospecting call, of the slightest importance? And what if the property IS in "the millions?" Do you honestly have an aversion to owning a multi-million dollar property with no loan, no bank qualifying, no cost to you, no payments by you and no risk?
Immediately call and ask the poor sick seller if he or she would consider--for a full price offer--staying on the existing loan for a while, during which time you and your "partner (your resident beneficiary)" will take over all costs and on-going expenses of payments, management, repairs, upkeep, property tax and insurance...in exchange for being able to retire the loan in, say, 3 to 5 (or ?) years, at the end of which time you will repay the sellers 100% of their currently existing equity. This gets them full price, builds a net egg and defers capital gains taxes (which could be in the hundreds of thousands of dollars if your value assumption is correct).
Sandy, I really need to tell you the following story (I think you’ll see why):
Several years ago a woman was given a brand new free and clear Porsche 911 in a divorce settlement, but a caveat in the settlement was that she was allowed to drive it only for six months. At the end of her allotted time, the six months, she was ordered by the court to sell the car for any amount she wanted to, but she had to turn over 100% of the proceeds to her ex-husband, for whom she apparently harbored some disdain (‘been there, ‘done that…’know the feeling. Even all these year later I am still referred to as what sounds like a “bass pole”…whatever that means…I don’t even fish).
After the woman’s allotted six months were up, she placed an ad in the San Francisco Chronicle that read: "For Sale. One year-old Porsche Targa 911. $1.00. Call now. Won't last."
Sandy, do you know that it took two days before someone finally called on that ad and bought the car for a dollar (about $50,000 worth of car)? At least a half million people saw the ad and didn't call because of having formulated a limiting falsehood in their heads that started out: "...because I 'think'..."
Don't EVER do that again! I know where you live. Don’t MAKE me come over there!
Bill
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
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