I though you might find a good message here.

The following is a little repartee between a tardy NARS Network Member (an investor who is also an attorney, gawfer-bid) and our own extraordinarily resourceful, creative, (overly) handsome, (highly) intelligent and (virtually) angelic, Bill J. Gatten.

I though you might find a good message here.
by Bill J. Gatten
Sent: Saturday, July 05, 2003 5:23 AM
To: Bill Gatten

Dear Bill, sholem aleichem. I hope you're having a great day. I hope your wife is well. I was impressed with her when I met her. But how am I to know you'alls internal existential reality (Hey is an Okie thang). But my 3rd party impression was that you married well. I'm delighted that that is one of my own gifts: marrying well. It's good to have such talent.
Believe it or not, I am finally getting around to reading the package I bought from you. I knew from past experience that the problem would not be the quality of your work, but my getting the reading and listening part done.
I thought before I started that I would really like it, and so far such as been the case. Like unto the boffo job you did at the workshop when we first met, so is the package.
Of course, you're not the only one recommending the use of trusts for certain situations, but you are, in my limited experience, the most detailed and thorough of all those who do.
The existential question for me is, although I like your ideas a lot: since I have never had a problem with due-on-sale clauses or leases with purchase options; and since there is always a risk in any transaction, is the risk worth the game? My own answer: based on a good deal of experience and my knowledge of both law and real estate, I haven't the foggiest idea. My main intent at the moment is to study your materials first, and then go on from there. My taking the time to go through all of the materials (after all, I do have a life) is testimony to how impressed I am with your knowledge and ability.
You know, I have recently been re-impressed with maybe the premier conundrum in selling real estate: A seller just can't win by fighting the market. Like unto fighting the mountain when you snow ski: they (the market and the mountain) are both bigger than you are and won’t budge just because you wish they would. But the most common mistake I see seller's make is fighting the market anyway, and pricing their property either too high or ‘way’ too high. And it happens not only with an individual’s one or two property sales experience, but with major banks and large mortgage companies as well.
My own bank, which is a very well-run organization whose crappy assets officer is my banker, always starts off too high and engages in what turns out be be nothing but a ‘Dutch auction’ in slow motion. As anyone know, Dutch auctions (where the price of the commodity for sale is reduced until someone buys) are always bad news, because they miss the frenzy of the first few weeks, when the best traffic takes place. They miss many better offers because multi-list filters don't bring up the property, and because too high a starting price causes many people not to ever make an offer. With me and, I suspect, a guy I you, I/we don't mind making offers far below the asking price then coming up if necessary, when we comfortable with our knowledge of the market; besides, I'm just naturally cheap anyway. I figure until I own it, it’s someone else's problem and until I sign on the dotted line, only then is it my problem.
Time and technology changes, but people don't. They never quit being more eager to pay too much for property when it is priced too high, that paying less when it is priced low. Is this a great country, or what!
By the bye, the reason for your luck in hearing from me is my starting to read and listen to your material. I'm delighted I bought it. But since it has taken me so long to read it, what about interest on my money for the delay?
Peace and grace,
David
Response From: Bill J. Gatten
David, 'glad you've finally condescended to reading my materials. And thanks for the kudos.
On your question about interest ("...what about interest on my money for the delay?"): I definitely believe there is a considerable amount due. Just send it to: Bill Gatten, POB 17931 Chatsworth, Granada Hills, and California.
On the issue of whether or not one should be afraid of due-on-sale clauses...I say "No": but then again, the 'Crocodile Hunter' is not afraid of rattlesnakes and cobras either. Do you 'spose that may, however, be because he's never been bitten by one. Do remember, David, you don't need a parachute to jump off a chair...but when you fly higher than you're afraid to fall, having one might allow you to sleep better on your journey. The Equity Holding Land Trust trust concept does a million times more than just avoid the DOSC, but if you're happy with what you're already doing, and have no need for anything better or more profitable, or safer (by a light-year or two), then the Equity Holding Trust Concept is just something you should know about, but will perhaps never need.
The reasons I wouldn't do it any other way are because...

• No transfer tax on conveyance
• Seller need not deal with capital gains tax (yet)
• Buyer can obtain the full benefits of fee simple ownership without credit, cash, application, waiting periods, bank approval process, etc.
• I never have to go on title and announce my "sue-ability factor" to the general public your legal kindred
• Allows for easiest and quickest RE transfer without a bunch of falderal
• Allows for quick eviction vs. foreclosure of a tenant-buyer who is essentially an "owner with full tax benefits." without fear of "Equity' claims to forestall eviction and force foreclosure and ejectment (and Quiet Title) actions
• Protects the property from liens by lawsuit by judgment: re. tort claimants, creditor actions, bankruptcy, probate even IRS tax liens.
• Allows for quick flips without double escrow or seasoning issues
• Avoids ancillary probate administration in the event of one's demise
• Avoids reversionary penalties upon termination of the trust and reconveyance of the property
• Allows for layering of saleable benefits to a tenant or tenant-buyer: I can sell all the fee-simple bundle of right; or I can sell only appreciation, use and occupancy and nothing else; or I can sell only tax write-off and nothing else; or I can sell only use and occupancy and nothing else.
• (Lastly) Allows for achieving the objectives of Wraps, CFD's, Options and all forms of Seller Financing without a DOSC compromise.
On the issue of the DOSC, which, I agree, many are not worried about or affected by it: When rates are low, lenders do no want to rock the boat re. perfectly performing mortgage loans. However, when interest rates go up and foreclosure rates go up and exodus rates go up and unemployment rates go up...and the Housing Affordability Index goes down, THEN...those same docile old lenders begin to pay BIG money for crews to come in and pore over their portfolios, looking for ANY fraudulent application or unauthorized transfer that can allow them justification for calling in the loan in order to retrieve the money and put it out at the higher prevailing rates. Ergo: The DOSC? A toothless tiger for now...but soon to become a raging, red-eyed, fire-breathing, spittle-dripping, sneaky little poisonous Platypus when interest rates begin to climb in the face of a dwindling Affordability Index.
Good to hear from you, my friend.
Bill

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