1) Double closings are no problem as long as the end buyer is bringing in cash. Most title companies deposit end money into an escrow account, pay of 1st seller funds, and then the difference to the middle investor.
2) But the end buyer must bring cash. If you are bringing in a loan, you can not to a double-close.
3) You can however add the end-person onto the purchase agreement… have him get the loan, pay the difference to the first buyer in cash in exchange for the quit claim off the title after closing.
4) The only problem with that is the “fee” has to be paid in cash and if you are wholesaling for 10-20 + thousand difference, then it gets difficult.
5) If the property is being bought hugely under-market then private money for the first closing is the way to go. Then bring in end buyer.
6) Each situation is different … Sometimes you can take a quit claim deed during a short-sale and then sell it to the end person. In such a case it’s best not to use the bank-owned property’s title company for the second closing…
7) You can actually have the second closing at another title company and have them wire the money for the first title company. You really need everyone on board and for them to know what their job is for all of this to happen.
8) An other way is to use an LLC to control the property.
9) There are so many good and legal ways to do things it all just depends on the situation.
And too, the owner in redemption can quit claim their redemption interest to you, even with the sheriffs deed in place. They can not, however, give you a warranty deed; but they can give you their interest in the property via quitting it.
So many ways to do things!
2) You can not cash-out if you purchase the house on a short sale…you have to purchase it and then refi it, or sell it…
3) Be very careful with a contractor’s lien on it…. This can create a worse problem and does create tax issues and fraud…there are better ways to do it.
Most important thing to know is that what ever you are doing needs to be insurable by the title company and have no fraud involved. There are too many ways to do things the right way. If you can’t then you need to concentrate on setting yourself up right so you can.
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, February 28, 2008
Thursday, February 21, 2008
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
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
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
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, February 14, 2008
BROKE? IN NEED? DOWN ON YOUR LUCK? UNFULFILLED? THERE’S A REASON…YOU HAVEN’T APPOINTED A DIRECTOR OF YOUR LIFE’S AFFAIRS
By Bill J. Gatten
North American Realty Services,
Creator of the Equity Holding Trust™ (the PACTrust™ and NEHTrust™)
During a visit with a good friend yesterday I was reminded of something I hadn't thought much about in months, which I'd like to share with you guys. If it affects your life like it did mine, you’ll be glad I took the time.
The friend, a woman of 50 or so, confided in me that she was flat broke, that she'd lot her business, didn't know where this month's rent was coming from...or even this month's food, and that her unemployment benefits had run out. She said she knew she would make it in the real estate investing business…eventually…and just wanted some advice on how to get the ball rolling as quickly as possible.
Well, being the old softie I am, I couldn’t resist telling her to go pound salt, get the hell out of my office, and go bitch to someone else. I had enough problems of my own what with my Mercedes’ transmission dragging on the ground, my Black Lab being pregnant by a sheep, a bad case of prickly heat and a gangrenous left…(oh never mind).
No! No!! Just kidding...I wouldn't do that (…oh ye of little faith…).
Here's what actually transpired:
I told my friend (...for the sake of confidentiality we'll call her "Suzie"...although her real name is Evelyn Fenster) that what she needed to do was stop trying to chop down the trees for a while, and spend some time sharpening her axe. This, of course is not what a person who sees themselves as ‘down-and-out’ and on their last leg wants to hear. What would be much preferred is to hear that there is a guardian angel hovering two feet above who is about to drop a load of fresh manna on them at any minute (BTW did you know that “manna” is the root word for manure?).
Well, OK, the guardian angel… it may have been there, but probably just sitting on a chair smiling understandingly and waiting to see how “Suzie” was going to attack her challenge, and thereby get to know herself...and her strengths…and qualify for entry into the next realm (whatever and wherever that might be).
My suggestion to Suzie was that for the quickest fix, she might use a technique that was given to me by my son Michael a few years back, and one which I have used very successfully since that time. That is the technique of appointing a mental director or “chairman” or “manger of life affairs” to manage the fulfillment of my needs and goals.
The essence of the “Director” concept is that in our daily lives we are 100% in control of everything that happens to us (or which befalls us). It is therefore ‘We’ who create the situations in which we find ourselves, and it is We who get ourselves out of those situations…one way or another. The various ways out of a bad situation includes: doing nothing and languishing in a stupor until it blows over; admitting defeat and living on pity and handouts; mugging old ladies; living off the government; knocking over an ATM machine; prostitution ('tried that...cut my price twice and still no takers…except for some old guy in a rubber chicken suit who I turned down when I found he was lying about being able to lay golden eggs); robbing a bank or liquor store; getting drunk and staying that way; or going “dry-land snorkeling” with an exhaust pipe.
OR…we can just STOP. We can relax and let our depression take over and have its way for a while, letting it naturally distort our problems, magnifying their various components so that we can better see and finally deal with them.
Contrary to what most people think, non-clinical depression is a god-given protective device that allows us to separate the dilemmas and the quandaries from each other. A dilemma is a choice between two bad things (e.g., the frying pan or the fire); a quandary is a state of perplexity in not knowing what to do next. The former is unsolvable and should be tossed into your mental trash can…it’ll either go away by itself, work itself out or kill you, no matter what you do: it doesn’t need, and cannot use, your help or energy. The latter, on the other hand—the quandary—now that’s the good one. A quandary is always solvable, simply by eliminating indecision and procrastination. The problem with quandaries, however, is that they are comprised of hundreds of tiny microscopic components that we’d never be able to see if we opted to take a pill or a bottle of booze in order to hide or run away from our natural depression reflex.
What are the myriad components of depression? They are all the random solutions your “internal staff” is coming up with…all at the same time: they are a cacophony of confusing demands, laments, bright ideas, test solutions and a bunch of begging and mewling that simply cannot be sorted out and processed by one brain.
Your male side wants this, your female side wants that; your child-self wants one thing; your adult-self wants the opposite; your parent-self wants something completely different; your Fear is demanding retreat while your impetuous and curious personality disagrees completely, and so on. The fact is that all of these disparate inputs are blocking and neutralizing each other, short-circuiting any possibility for logical mental processes, mush less resolution.
The solution? First of all, come to grips with the fact that your life is no more than a movie script that you wrote and that you are starring in. You wrote it, you are directing it and you are playing all the parts. You are all the actors; you are the camera crew; you are the makeup man/woman; you are the choreographer; you are the costume designer; you are the lighting manager, art director, set designer, electrician, best boy and grip. Next, upon acknowledging the reason for the cacophony and your inability to effectively process useful problem-solving data when times are REALLY tough…appoint a single director and turn the confusion over to him/her/it.
The director is that entity whom you have chosen to take charge and to decipher and resolve all conflicting data that comes into your mind from your many selves. This entity is entrusted with directing all the others to shut the hell up and do what they are supposed to do and take directions in resolute silence. This is your “Director,” your ”Business Manger” your “Chairman of the Board,” your God, Krishna or whatever other titles you’d like to ascribe to it. I refer to my own as “The Director” and I have put him in charge of all of my goals and aspirations, and all the hard stuff in my life…and you know…he REALLY does a good job.
The Rules:
When communicating with your Director you must always do it in writing, and in your own hand (pencil preferably). Mental supplication (praying) just gets lost in the chaos of your mind. By simply writing a letter to him/her explaining your situation as succinctly as you can without leaving out the essence of your desire or goal, you are given what you ask for. In the letter, you must state exactly what it is you need and what you’ve already done, if anything, to break down your barrier and ease the problem. You must also clearly state exactly when you’d like your need to be manifested. You then fold the letter you’ve written and place it in a private (secret) place and leave it alone (your “director’s box”…mine is a tin box with a picture of Elvis on it…I think it once held cookies or something).
Your letter might look something like this:
Dear Director,
With all due respect, I currently find myself in a difficult position, and truly need your help. This month’s house payments and car payments are due and I do not have the money to pay them at the moment. Since these sums are all due and payable within one week (by 08/16/02 at the very latest), I currently need enough to cover them as soon as possible. I ask that you give me a final solution to this problem and the wherewithal to carry it out within this time frame. I will accept cash, check or money order…or anything immediately salable or pawn-able that could get me out of this discomfort.
I am hereby leaving this request with you and demanding that it be fulfilled within the above stated date, if at all possible. The amount requested is $3,600.00, but I could get by for a while on just $2,600 if I had to.
I am willing to travel as necessary to obtain this money.
Respectfully,
-0-
Understand that your director can only do what is reasonably possible and cannot, and will not, do the impossible. Therefore if you ask for $100,000 by next Tuesday and don’t indicate that some lesser amount and a later date would work too, your director will not stop short at just $98,000 that might be available instead…it will just keep plugging away until it happens (which may be too late to help you). Over statement or being too specific could also create a failure in the process and you could simply end up with nothing. It is imperative that you be specific about what it is you want, but that you never are too exclusive. In other words, if you ask for a new car of a certain type and specify that it should be red, there might be a hundred cars just like the one you asked for, but since none of them are red, your director will overlook them and not present them to you because you specifically said you wanted a red one and ones subconscious (reactive) mind does not quantify or delineate. A red car is one thing, and a blue car of the same make and model is a completely different thing…a thing that you specifically did NOT ask for.
By the way (speaking of red cars), this is exactly the process I used to get the Nissan Pathfinder than I’ve been driving since 1995. We were VERY short of credit in 1995 and my Jeep Cherokee was on its last leg. So I wrote a letter to my director explaining that I needed a new SUV with a stereo tape deck and a rear spare tire rack and that I wanted a red one, but that I would take any color. Viola, two days after putting the note in my director’s box, I was driving past a Nissan dealership in Arcadia, CA where I saw a red Pathfinder parked on the lot. I stopped and got out to inquire about the possibility of getting financed without any credit, and within one hour I was driving it home…no down…no credit application (just killer interest rate…which was fine with me, given my circumstances, and since I had to have a good car, and since the payment amount was not that crucial to me).
Here’s another letter I wrote last year after having sold our home in Granada Hills (bought for $300,000 sold for $510,000):
01-12-02
Dear Director,
I need a new home by or before the end of January of this year about 2 weeks away). I wish to pay nothing out of pocket and wish to avoid any credit qualifying or approval process. I choose to continue living in the San Fernando Valley and would prefer the Northern end, but would accept any five bedroom in good condition the cities of Granada Hills, Chatsworth, Woodland Hills, Canoga Park, Tarzana, Reseda, Topanga Canyon or Sherman Oaks.
I am beginning today to make FSBO and landlord calls.
Thank you for giving me the means, and for and handling this as quickly as possible
Respectfully,
Bill J. Gatten
That day, in making FSBO calls I found three houses (on the first day) that were available with seller financing, but one was not at all what we wanted and the other two sellers both wanted some cash up front. The last one I spoke with wanted a full $150,000 up front, but indicated he’d stay on the loan. Within 15 minutes of that call a Network member who needed an up-leg 1031 exchange property, and who had $150,000 coming from her down-leg property called me. She indicated that she had to get rid of the down leg property within two weeks or pay big income tax. Well, needless to say we moved into our new home within that two weeks, and we and the Network member we are now 50:50 partners (EHT Eq. Share) in a property we got for $530,000, which is now worth about $600,000 and which will be worth $800,000 when all my refurbishments are completed. Thanks Director!
Tools you will need: 1) piece of paper 2) pen or pencil, 3) box, 4) secret spot 5) brain (optional)
Good luck in everything you try, and congratulations on everything you accomplish.
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
North American Realty Services,
Creator of the Equity Holding Trust™ (the PACTrust™ and NEHTrust™)
During a visit with a good friend yesterday I was reminded of something I hadn't thought much about in months, which I'd like to share with you guys. If it affects your life like it did mine, you’ll be glad I took the time.
The friend, a woman of 50 or so, confided in me that she was flat broke, that she'd lot her business, didn't know where this month's rent was coming from...or even this month's food, and that her unemployment benefits had run out. She said she knew she would make it in the real estate investing business…eventually…and just wanted some advice on how to get the ball rolling as quickly as possible.
Well, being the old softie I am, I couldn’t resist telling her to go pound salt, get the hell out of my office, and go bitch to someone else. I had enough problems of my own what with my Mercedes’ transmission dragging on the ground, my Black Lab being pregnant by a sheep, a bad case of prickly heat and a gangrenous left…(oh never mind).
No! No!! Just kidding...I wouldn't do that (…oh ye of little faith…).
Here's what actually transpired:
I told my friend (...for the sake of confidentiality we'll call her "Suzie"...although her real name is Evelyn Fenster) that what she needed to do was stop trying to chop down the trees for a while, and spend some time sharpening her axe. This, of course is not what a person who sees themselves as ‘down-and-out’ and on their last leg wants to hear. What would be much preferred is to hear that there is a guardian angel hovering two feet above who is about to drop a load of fresh manna on them at any minute (BTW did you know that “manna” is the root word for manure?).
Well, OK, the guardian angel… it may have been there, but probably just sitting on a chair smiling understandingly and waiting to see how “Suzie” was going to attack her challenge, and thereby get to know herself...and her strengths…and qualify for entry into the next realm (whatever and wherever that might be).
My suggestion to Suzie was that for the quickest fix, she might use a technique that was given to me by my son Michael a few years back, and one which I have used very successfully since that time. That is the technique of appointing a mental director or “chairman” or “manger of life affairs” to manage the fulfillment of my needs and goals.
The essence of the “Director” concept is that in our daily lives we are 100% in control of everything that happens to us (or which befalls us). It is therefore ‘We’ who create the situations in which we find ourselves, and it is We who get ourselves out of those situations…one way or another. The various ways out of a bad situation includes: doing nothing and languishing in a stupor until it blows over; admitting defeat and living on pity and handouts; mugging old ladies; living off the government; knocking over an ATM machine; prostitution ('tried that...cut my price twice and still no takers…except for some old guy in a rubber chicken suit who I turned down when I found he was lying about being able to lay golden eggs); robbing a bank or liquor store; getting drunk and staying that way; or going “dry-land snorkeling” with an exhaust pipe.
OR…we can just STOP. We can relax and let our depression take over and have its way for a while, letting it naturally distort our problems, magnifying their various components so that we can better see and finally deal with them.
Contrary to what most people think, non-clinical depression is a god-given protective device that allows us to separate the dilemmas and the quandaries from each other. A dilemma is a choice between two bad things (e.g., the frying pan or the fire); a quandary is a state of perplexity in not knowing what to do next. The former is unsolvable and should be tossed into your mental trash can…it’ll either go away by itself, work itself out or kill you, no matter what you do: it doesn’t need, and cannot use, your help or energy. The latter, on the other hand—the quandary—now that’s the good one. A quandary is always solvable, simply by eliminating indecision and procrastination. The problem with quandaries, however, is that they are comprised of hundreds of tiny microscopic components that we’d never be able to see if we opted to take a pill or a bottle of booze in order to hide or run away from our natural depression reflex.
What are the myriad components of depression? They are all the random solutions your “internal staff” is coming up with…all at the same time: they are a cacophony of confusing demands, laments, bright ideas, test solutions and a bunch of begging and mewling that simply cannot be sorted out and processed by one brain.
Your male side wants this, your female side wants that; your child-self wants one thing; your adult-self wants the opposite; your parent-self wants something completely different; your Fear is demanding retreat while your impetuous and curious personality disagrees completely, and so on. The fact is that all of these disparate inputs are blocking and neutralizing each other, short-circuiting any possibility for logical mental processes, mush less resolution.
The solution? First of all, come to grips with the fact that your life is no more than a movie script that you wrote and that you are starring in. You wrote it, you are directing it and you are playing all the parts. You are all the actors; you are the camera crew; you are the makeup man/woman; you are the choreographer; you are the costume designer; you are the lighting manager, art director, set designer, electrician, best boy and grip. Next, upon acknowledging the reason for the cacophony and your inability to effectively process useful problem-solving data when times are REALLY tough…appoint a single director and turn the confusion over to him/her/it.
The director is that entity whom you have chosen to take charge and to decipher and resolve all conflicting data that comes into your mind from your many selves. This entity is entrusted with directing all the others to shut the hell up and do what they are supposed to do and take directions in resolute silence. This is your “Director,” your ”Business Manger” your “Chairman of the Board,” your God, Krishna or whatever other titles you’d like to ascribe to it. I refer to my own as “The Director” and I have put him in charge of all of my goals and aspirations, and all the hard stuff in my life…and you know…he REALLY does a good job.
The Rules:
When communicating with your Director you must always do it in writing, and in your own hand (pencil preferably). Mental supplication (praying) just gets lost in the chaos of your mind. By simply writing a letter to him/her explaining your situation as succinctly as you can without leaving out the essence of your desire or goal, you are given what you ask for. In the letter, you must state exactly what it is you need and what you’ve already done, if anything, to break down your barrier and ease the problem. You must also clearly state exactly when you’d like your need to be manifested. You then fold the letter you’ve written and place it in a private (secret) place and leave it alone (your “director’s box”…mine is a tin box with a picture of Elvis on it…I think it once held cookies or something).
Your letter might look something like this:
Dear Director,
With all due respect, I currently find myself in a difficult position, and truly need your help. This month’s house payments and car payments are due and I do not have the money to pay them at the moment. Since these sums are all due and payable within one week (by 08/16/02 at the very latest), I currently need enough to cover them as soon as possible. I ask that you give me a final solution to this problem and the wherewithal to carry it out within this time frame. I will accept cash, check or money order…or anything immediately salable or pawn-able that could get me out of this discomfort.
I am hereby leaving this request with you and demanding that it be fulfilled within the above stated date, if at all possible. The amount requested is $3,600.00, but I could get by for a while on just $2,600 if I had to.
I am willing to travel as necessary to obtain this money.
Respectfully,
-0-
Understand that your director can only do what is reasonably possible and cannot, and will not, do the impossible. Therefore if you ask for $100,000 by next Tuesday and don’t indicate that some lesser amount and a later date would work too, your director will not stop short at just $98,000 that might be available instead…it will just keep plugging away until it happens (which may be too late to help you). Over statement or being too specific could also create a failure in the process and you could simply end up with nothing. It is imperative that you be specific about what it is you want, but that you never are too exclusive. In other words, if you ask for a new car of a certain type and specify that it should be red, there might be a hundred cars just like the one you asked for, but since none of them are red, your director will overlook them and not present them to you because you specifically said you wanted a red one and ones subconscious (reactive) mind does not quantify or delineate. A red car is one thing, and a blue car of the same make and model is a completely different thing…a thing that you specifically did NOT ask for.
By the way (speaking of red cars), this is exactly the process I used to get the Nissan Pathfinder than I’ve been driving since 1995. We were VERY short of credit in 1995 and my Jeep Cherokee was on its last leg. So I wrote a letter to my director explaining that I needed a new SUV with a stereo tape deck and a rear spare tire rack and that I wanted a red one, but that I would take any color. Viola, two days after putting the note in my director’s box, I was driving past a Nissan dealership in Arcadia, CA where I saw a red Pathfinder parked on the lot. I stopped and got out to inquire about the possibility of getting financed without any credit, and within one hour I was driving it home…no down…no credit application (just killer interest rate…which was fine with me, given my circumstances, and since I had to have a good car, and since the payment amount was not that crucial to me).
Here’s another letter I wrote last year after having sold our home in Granada Hills (bought for $300,000 sold for $510,000):
01-12-02
Dear Director,
I need a new home by or before the end of January of this year about 2 weeks away). I wish to pay nothing out of pocket and wish to avoid any credit qualifying or approval process. I choose to continue living in the San Fernando Valley and would prefer the Northern end, but would accept any five bedroom in good condition the cities of Granada Hills, Chatsworth, Woodland Hills, Canoga Park, Tarzana, Reseda, Topanga Canyon or Sherman Oaks.
I am beginning today to make FSBO and landlord calls.
Thank you for giving me the means, and for and handling this as quickly as possible
Respectfully,
Bill J. Gatten
That day, in making FSBO calls I found three houses (on the first day) that were available with seller financing, but one was not at all what we wanted and the other two sellers both wanted some cash up front. The last one I spoke with wanted a full $150,000 up front, but indicated he’d stay on the loan. Within 15 minutes of that call a Network member who needed an up-leg 1031 exchange property, and who had $150,000 coming from her down-leg property called me. She indicated that she had to get rid of the down leg property within two weeks or pay big income tax. Well, needless to say we moved into our new home within that two weeks, and we and the Network member we are now 50:50 partners (EHT Eq. Share) in a property we got for $530,000, which is now worth about $600,000 and which will be worth $800,000 when all my refurbishments are completed. Thanks Director!
Tools you will need: 1) piece of paper 2) pen or pencil, 3) box, 4) secret spot 5) brain (optional)
Good luck in everything you try, and congratulations on everything you accomplish.
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, February 7, 2008
DIARY OF AN EQUITY HOLDING TRUST™ FROM BEGINNING TO END.
By Bill J. Gatten
March 13, 2000: I receive a call from my bandit sign (“I Buy Houses, Full Price, All Cash or Terms”). The caller, Mr. Brown, says he has a house with work to be done on it that’s worth $150,000; but which has a $154,000 loan on it. He says he’s just looking for someone to take over his payments. I ask how much work needs to be done. He says maybe $10,000. I tell him I'll call him back the next day after checking the title and getting some comparable value information (“comps”). The comps show a value of perhaps $160K after fix-up (still no equity for me).
March 15: I call and arrange to meet Mr. Brown at the property to see the mess (broken windows, a yard full of trash and termites). I comment that I can see that he is in a pickle with this one...he agrees. I tell him I’ll take it if he can pay $2,500 for possible termite work. He agrees.
After inspecting the house, I determine that actual costs to bring the property to a reasonable cosmetic condition (with good, but cheap, labor) might run $5,000 to $6,000. I reason, as well, that by keeping the loan in place, I can ask for $10,000 up front from a tenant/buyer on a 50:50 land trust equity share. I figure I can advertise it at $165,000 and perhaps be able to start out at break-even (without any out of pocket and with a couple thousand ending up in my wallet). I then have Mr. Brown sign a 15-Day Option (I try for 30, but he’s afraid of making another payment). Upon handing him the Option to sign (with a ten dollar bill stapled to the front), I also give him an unsigned Purchase Offer and explain that the ten bucks is just legal consideration (‘stops them from asking for an option fee).
March 16: I hot-foot it down to the county court house to recorded the Memorandum of Option, then over to the newspaper office to run my ad:
NO BANK QUAL, NO DOWN,
NO CRED. APP
3 Pmts & Clos Costs Moves
you in. $165K 3+2, $1,350
p/mo+tx and ins. Needs TLC.
March 18: For a couple of crisp hundies, my friend “Bob” puts a coat of gray paint on the front of the house and frames all the window and door openings with bright white 1 X 6 boards: just the front, not the sides or back. He then collects the trash in the front yard…and throws it in the back yard. Next, he mows the front yard weeds and plants some flowering plants along the front of the house. After three or four hundred dollars at most, the house looks “cute and cozy” from the front (‘called “Curb Appeal”). The plan is to then begin work on the rest of the house, in hopes that someone might just drop by and offer to finish it for a reduction in price.
March 20: Bob dismantles the kitchen cabinets. No real work, just creating the illusion of “work in process.” Note that I haven’t myexercised the Option yet and I’ve only spent about $500 at this point for everything.
March 24: The ad hits and the phone starts ringing. I repeat the same mantra with every caller. “Yes, I have this little place on Fig Street, and if you can afford the ten thousand to get in, and the $1,100 payment, I’ll just GIVE it to you. (Pause) The only thing I want is for you to put it in your own name, or sell it, in a few years. Then if there’s been any appreciation we can just split it.”
With each caller, I tell him or her that the house is being worked-on, but that if they want to see it, they have to wear “rose colored glasses,” because it’s under repair. Remember… it looks great from the curb: I just want them to see “potential” at this point.
March 26: The fifth or sixth caller calls back and asks if we can meet at the house to work something out. After re-inspection of the mess, he asks when I might be finished with it…I tell him maybe in two months. He seems discouraged. I then tell him that if he’d like to finish the work himself, I’ll knock a couple thousand off the price, and reduce the upon front by $2,500 (i.e., now he can get in for $7,500 plus the first payment when due). I then complete a purchase offer—from him to me—and have him sign it and accompany it with a non-refundable check for $3,750.
March 27: I return to Mr. Brown, and give him my signed purchase offer.
April 1: I have Mr. Brown execute the “Joe Brown Land Trust” (as its only beneficiary), appointing one of my two trustees as the title holder.
April 4th: I complete the “Assignment of Beneficiary Interest” agreement from Mr. Brown to my resident co-beneficiary and me. I then complete the “Beneficiary Agreement” between us all. Our percentages of beneficiary interest in the trust are: 10% to Mr. Brown; 40% to me; and 50% to the Resident Beneficiary. A separate agreement requires Brown to forfeit his 10% to me at termination (he just needs to hold onto it for the term to avoid due-on-sale issues, property tax reassessment and the payment of transfer tax).
April 10th: My new resident co-beneficiary brings in the rest of his money, signs all documents, makes his first payment on the contract and is given the keys.
April 11th: The trust deed is recorded; a triple-net lease agreement between the trustee (Equity Holdings, Inc.) and the new resident beneficiary is executed. All documents are sent to the trustee, who appoints the collection service who handles collections and disbursements for the term of the agreement.
May12th: I receive my check from Escrow for $3,500, less the cost of title search, IRS filing fee, and a one month Contingency Fund (with which to evict if I ever have to). Now, when the trust and the accompanying lease agreement terminates, the property will be sold; all costs of sale will be paid; I will get back the equity that I carried (the difference between the loan amount at start and the $160K the resident came in at; the resident beneficiary will receive a refund of the non-recurring part of his $6,500; and all remaining proceeds will be divided between the resident beneficiary and me.
March 22, 2003: the resident beneficiary refinances the property at a value of $250,000; I receive a check for $50,000. This is on top of the $6,500 received up front and $100 per month in positive cash flow for three years. Not bad for an over-encumbered property that no one else wanted, and which I got with No Down, No Credit App., No New Loan; No monthly payments; No management; No maintenance, No upkeep or refurbishment costs. Furthermore, the underlying lender’s Due-on-Sale clause was not violated; the property was protected from creditor and tax liens, bankruptcies, marital dissolution and Probate should any party have died during the term.
Cool, eh?
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
March 13, 2000: I receive a call from my bandit sign (“I Buy Houses, Full Price, All Cash or Terms”). The caller, Mr. Brown, says he has a house with work to be done on it that’s worth $150,000; but which has a $154,000 loan on it. He says he’s just looking for someone to take over his payments. I ask how much work needs to be done. He says maybe $10,000. I tell him I'll call him back the next day after checking the title and getting some comparable value information (“comps”). The comps show a value of perhaps $160K after fix-up (still no equity for me).
March 15: I call and arrange to meet Mr. Brown at the property to see the mess (broken windows, a yard full of trash and termites). I comment that I can see that he is in a pickle with this one...he agrees. I tell him I’ll take it if he can pay $2,500 for possible termite work. He agrees.
After inspecting the house, I determine that actual costs to bring the property to a reasonable cosmetic condition (with good, but cheap, labor) might run $5,000 to $6,000. I reason, as well, that by keeping the loan in place, I can ask for $10,000 up front from a tenant/buyer on a 50:50 land trust equity share. I figure I can advertise it at $165,000 and perhaps be able to start out at break-even (without any out of pocket and with a couple thousand ending up in my wallet). I then have Mr. Brown sign a 15-Day Option (I try for 30, but he’s afraid of making another payment). Upon handing him the Option to sign (with a ten dollar bill stapled to the front), I also give him an unsigned Purchase Offer and explain that the ten bucks is just legal consideration (‘stops them from asking for an option fee).
March 16: I hot-foot it down to the county court house to recorded the Memorandum of Option, then over to the newspaper office to run my ad:
NO BANK QUAL, NO DOWN,
NO CRED. APP
3 Pmts & Clos Costs Moves
you in. $165K 3+2, $1,350
p/mo+tx and ins. Needs TLC.
March 18: For a couple of crisp hundies, my friend “Bob” puts a coat of gray paint on the front of the house and frames all the window and door openings with bright white 1 X 6 boards: just the front, not the sides or back. He then collects the trash in the front yard…and throws it in the back yard. Next, he mows the front yard weeds and plants some flowering plants along the front of the house. After three or four hundred dollars at most, the house looks “cute and cozy” from the front (‘called “Curb Appeal”). The plan is to then begin work on the rest of the house, in hopes that someone might just drop by and offer to finish it for a reduction in price.
March 20: Bob dismantles the kitchen cabinets. No real work, just creating the illusion of “work in process.” Note that I haven’t myexercised the Option yet and I’ve only spent about $500 at this point for everything.
March 24: The ad hits and the phone starts ringing. I repeat the same mantra with every caller. “Yes, I have this little place on Fig Street, and if you can afford the ten thousand to get in, and the $1,100 payment, I’ll just GIVE it to you. (Pause) The only thing I want is for you to put it in your own name, or sell it, in a few years. Then if there’s been any appreciation we can just split it.”
With each caller, I tell him or her that the house is being worked-on, but that if they want to see it, they have to wear “rose colored glasses,” because it’s under repair. Remember… it looks great from the curb: I just want them to see “potential” at this point.
March 26: The fifth or sixth caller calls back and asks if we can meet at the house to work something out. After re-inspection of the mess, he asks when I might be finished with it…I tell him maybe in two months. He seems discouraged. I then tell him that if he’d like to finish the work himself, I’ll knock a couple thousand off the price, and reduce the upon front by $2,500 (i.e., now he can get in for $7,500 plus the first payment when due). I then complete a purchase offer—from him to me—and have him sign it and accompany it with a non-refundable check for $3,750.
March 27: I return to Mr. Brown, and give him my signed purchase offer.
April 1: I have Mr. Brown execute the “Joe Brown Land Trust” (as its only beneficiary), appointing one of my two trustees as the title holder.
April 4th: I complete the “Assignment of Beneficiary Interest” agreement from Mr. Brown to my resident co-beneficiary and me. I then complete the “Beneficiary Agreement” between us all. Our percentages of beneficiary interest in the trust are: 10% to Mr. Brown; 40% to me; and 50% to the Resident Beneficiary. A separate agreement requires Brown to forfeit his 10% to me at termination (he just needs to hold onto it for the term to avoid due-on-sale issues, property tax reassessment and the payment of transfer tax).
April 10th: My new resident co-beneficiary brings in the rest of his money, signs all documents, makes his first payment on the contract and is given the keys.
April 11th: The trust deed is recorded; a triple-net lease agreement between the trustee (Equity Holdings, Inc.) and the new resident beneficiary is executed. All documents are sent to the trustee, who appoints the collection service who handles collections and disbursements for the term of the agreement.
May12th: I receive my check from Escrow for $3,500, less the cost of title search, IRS filing fee, and a one month Contingency Fund (with which to evict if I ever have to). Now, when the trust and the accompanying lease agreement terminates, the property will be sold; all costs of sale will be paid; I will get back the equity that I carried (the difference between the loan amount at start and the $160K the resident came in at; the resident beneficiary will receive a refund of the non-recurring part of his $6,500; and all remaining proceeds will be divided between the resident beneficiary and me.
March 22, 2003: the resident beneficiary refinances the property at a value of $250,000; I receive a check for $50,000. This is on top of the $6,500 received up front and $100 per month in positive cash flow for three years. Not bad for an over-encumbered property that no one else wanted, and which I got with No Down, No Credit App., No New Loan; No monthly payments; No management; No maintenance, No upkeep or refurbishment costs. Furthermore, the underlying lender’s Due-on-Sale clause was not violated; the property was protected from creditor and tax liens, bankruptcies, marital dissolution and Probate should any party have died during the term.
Cool, eh?
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
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