Sub2 - Is it legal?

[mtnwizard]

I went back through the archives and Rajah was asking the same questions on this forum a LONG TIME AGO, and Colvegas and several others already provided him with EVERY ANSWER that I have -- ON MANY OCCASIONS, yet he keeps repeating the same questions, YEAR AFTER YEAR.  He knows his "facts" are wrong yet likes to confuse the issue.  What's his agenda?  In reviewing his posts, it seems he is a subject 2 lover.  No wonder he hates land trusts.  They DON'T violate the DOSC and are legal.  A Subject 2 without a land trust requires secrecy and subterfuge are being banned in NC, and targeted in many states.  They also require a little prayer that banks don't again decide to rear their ugly heads and start calling loans as they did years ago.


Thanks to NDI for his common sense appraisal of the situation, and all the others who sent supportive emails and PM's, and thank you Rajah for being so desperate, and making it all happen.  Your silly questions have enlightened many posters on this forum as to the benefits of the land trust.

Da Wiz

[ND Investor]

Roger

I don't claim to be an expert on Land Trusts so why are you asking me the questions if it's not an attack?  I think it is time to put this topic to bed.  

Readers:

What is your opinion if this were a debate who won by giving the most crediable and consistant comments?  This is only 'My Opinion' since I am not a debate judge.

I say

Doc (1)
Roger and Boo Boo (0)

Look forward to seeing others comments!

Have a Great Day!

NDI

[BooBoo]

Raj,

I should have listened to you in the first place…he ain’t gunna quit (a true Gattenite).

I accomplished what I started out to do in questioning something that was “suppose” to be the all saving investment vehicle. Now it is time to get back to work in the real investing world.


NDI,

This is what is great about America. We can all agree, disagree and have our own opinions.

I happen to not have a problem with trusts as asset protection and financial planning as they were designed for. My family and I have been using them this way for years.

I do however have a problem with the way they are being implemented here.

We all know that there is an air of animosity growing against investors by the number of new state laws going into effect, because of stupid and illegal activities being done by a few individuals. The state officials are starting to look at and scrutinize our industry with a fine tooth-comb.  

Now, for some unknown reason, Da Wiz is on a crusade that his way is the ONLY way to invest with no risk and that is just plain false. The only way to show this “falseness” was to poke holes in his investment strategy because there is risk in ANY investment strategy, including this one.

If I can do this chipping and poking holes as a layman, I’m sure that the attorneys and state officials can also do it, but with a lot more gusto.

This trust is NOT a do all; and in my opinion using it in this manner will eventually get someone in deep trouble especially if they are not aware of these risks.


If nothing else, this has been one of the more spirited threads I have seen in a long time.

[mtnwizard]

Final Response.  BooBoo, YOU ARE RIGHT.  My intent is not to say that a land trust is the ONLY way to invest without risk.  That was a simplification. -Why?  Because a land trust is only a component of the equity holding trust system I use which I firmly believe is not the only way, just the best.  You have not only privacy and asset protection, but you can accomplish just about anything you choose.  I don't know of any other creative financing method that provides that kind of flexibility.  If you do, tell me, I'm all ears.

Our equity holding trust system may be seen an effective legal shield for virtually ANY creative financing objective. It can, in essence be tantamount to a Long Term Lease (i.e., a lease for more than 3 years); a Lease Option; a Lease Purchase, an All Inclusive Trust Deed, an Equity Share Arrangement, or a Land Contract (e.g., Contract for Sale, Contract for Deed, Contract for Warranty Deed, etc.). The Trust can meet the objectives and functions of any of these arrangements without the many risks associated with them.  In addition to the Triple Net Lease which I employ, the Trust can function:

AS A LONG TERM LEASE: A Co-Beneficiary Trust can be set up for up to twenty years, with a Lease of the property to a Resident Co-beneficiary for 2 years, eleven months and twenty-nine days. The lease with the trust will stipulate that at the end of the original lease term, the tenant may "hold-over" in the property until the end of the trust period, unless evicted sooner. Since an eviction would have to be by mutual direction by ALL beneficiaries: the tenants being one of the beneficiaries, protects him and effectively continues his/her holdover until the termination of the trust.

AS AN AITD (Wrap-Around): A seller places its property into a Trust, assigning a full Beneficiary Interest to the "buyer," with the agreement that the property will be leased to the co-beneficiary on a Triple-Net basis for some specified period of time. The property is then scheduled to be sold at the end of the Agreement. Upon sale there is a distribution of proceeds to (between) parties with respect to each of their proportionate shares of Beneficiary Interest. In order to avoid reassessment for property tax purposes, and to justify mutual Power of Direction, we recommend that the shares of Beneficiary Interest remain at 90%:10% in favor of the "buyer." Then at the end of the term, the "seller" can forfeit its 10% in consideration of the co-beneficiary's prompt payment record and strict adherence to the contract.

AS A LAND CONTRACT: (Contract for Deed): Benefits are the same as above.

AS A LEASE OPTION: The property is placed into a Trust with the understanding that, at the end of the Agreement, the property will be sold to the Resident Co-Beneficiary for Fair Market Value, minus any and all sums owed to the Resident Co-Beneficiary. In this scenario verbiage is such that there is actually no "Option" per se; and that there is no "bargain buy-out" provision other than "…at Fair Market Value, less amounts due the respective beneficiaries."

AS A LEASE PURCHASE: Same as above, except that the Agreement provides that the property will definitely be acquired by the Resident Beneficiary at termination irrespective of market conditions, relative values, etc. The Rider in this scenario provides that the co-beneficiary has the obligation to either sell or refinance at termination.

AS AN EQUITY SHARE: Same as above, except that parties share 50:50 in the Beneficiary interest within the Trust, with an agreement to share all net profits proportionately at termination.

AS A BRIDGE-LOAN DEVICE (e.g., when a buyer can't finance, or afford a down payment for several more months or years and the seller may be willing to wait awhile): The Trust affords such a buyer the opportunity to live in the property, while paying all costs and enjoying all the benefits and incidents of homeownership, including tax write-off and waiting until financing and outright purchase is possible. In this scenario, the Trust is set up to coincide with that point in time when the property can be purchased outright by the Resident Beneficiary.

AS A VEHICLE FOR HIGHER RENTS AND FREEDOM FROM ACTIVE LANDLORD RESPONSIBILITIES AND COSTS: A prudent landlord would be well advised to consider making his rental tenant a Co-Beneficiary in a Trust in which the rental property's title is vested. This will give the landlord an ideal opportunity to trade such items as tax write-off, equity, equity build-up, appreciation and the psychological peace of homeownership, for such commodities as free maintenance, repairs, upkeep, management… and much higher rents. Each one of these "items of trade" has a value, and giving up all or some of each one can more than double rents while simultaneously [greatly] reducing the expense of renting for the tenant.

You said the land trust is "not a do-all".  I agree.  But, as part of the equity holding trust system, I'd say it's pretty darn close.  Anytime you convert your real property to personal property, you not only have privacy, but you open up a whole new world of options previously unavailable.  Is it any wonder why the wealthy have used these methods for decades and kept it to themselves?

I enjoyed the exchange.  Have a good day.

Da Wiz

[kdhastedt]

<<Final Response.>>

...one could only hope...

Keith

[mtnwizard]

Amen

Da Wiz

[kdhastedt]

You gus are giving me an "ice cream headache"...!

Keith