All Forum Posts by: Jerry W.

Maybe this should be read as well

https://www.l4sb.com/blog/just-anonymous-anonymous...

or perhaps an unanswered comment I made on the article you posted in your comment above. 

Scott, I have some disagreements that maybe you can clear up. First you can transfer your property into a TESTAMENTARY trust because it is legally still you, you are doing it for inheritance purposes so federal law recognizes you and your trust as the same person. If your LAND trust is not a testamentary trust then it violates the due on sale clause and the bank may call your loan. Next if your trust by whatever name you call it transfers the land to an LLC the due on sale clause can be called immediately. The bank will know you did the transfer because you MUST provide proof of insurance. The insurance must be in the name of the LLC or it is VOID. If the name of the insured is the trust or you but the deed is in the LLC your insurance is void, then if you get sued they come after you and you have no insurance. As to anonymity, how are you anonymous if your name is on the mortgage of the property? Don't you think that would make even the least suspicious sue happy lawyer think you may be involved somehow? Then you signed the deed putting it into the trust right? You signed the deed putting it into the LLC from your trust right? You write the checks to the insurance company out of the LLC right? If you hire other people to do those management things for you it will cost you a fortune and they can run the business not you. If they sue or depose one of those folks you think they will lie to protect your anonymity? No. Now if there is a lawsuit and your name is on the bank account don't you think they will depose you too? Will you lie about your involvement and risk going to prison for perjury? Especially if your name is on every legal document connected to the property?
If I am wrong here please let me know. I am a bit rusty on this as I have done a suit involving an LLC or corporation for several years. If I am right then all of these folks wanting to go spend money on an attorney to do this will have wasted their time and money. Please enlighten us. If there is some magical way to never be sued again by landlords I would imagine every landlord would have it. Please explain how I am wrong about any of these.

This was posted over a year ago and has never been answered.  Not to mention how fast in a real lawsuit a single deposition or interrogatories would slice through this scheme and tell who the real owner is.  I simply don't see how it is a workable system for the self managing investor.

Here is another comment on your article you did not answer:

Scott, i am no lawyer, but it appears that § 591.5 Limitation on exercise of due-on-sale clauses, and 12 U.S. Code § 1701j–3 – Preemption of due-on-sale prohibitions contradict what you are saying.

It clearly states: “a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property”

Could you please expand on this?
Thank you so much!

What statute prevents the due on sale clause from being called when transferred to a Land Trust?

This not true, transfer to a land trust can cause the due on sale clause to be activated. A transfer to a testamentary trust is exempt from the due on sale clause. there is a federal statute that prohibits it. there is no such federal statute about land trusts that I have ever heard of. Transfer to a land trust can cause the due on sale clause to be triggered. Using deceit about the trust could get you sanctioned by the bar association about the nature of a trust, and could definitely get your loan called. You might even be liable on federal charges if you falsify the information about the nature of the trust. A transfer to a Land trust normally provides NO protection from liability like an LLC does. Saying the issue of due on sale clause can be completely avoided by using a Land trust is false in my experience.

No bank I am doing business with is going to loan you any money using the I am a hidden man stuff you are proposing here.  I realize you are trying to build a business peddling this stuff but this appears to be misleading to me.  you are overselling a product that probably 99% of the folks on here don't need.  Do you really think @Aaron Christen is ever going to be able to remain anonymous in Green River Wyoming while personally managing a 4 plex?  Do you really think the Sweetwater County Treasurer won't know he owns it?  Do you think the Bankers will lend to to him with 3 layers of corporate and trust ownership?  Who do you think is going to interview the tenants, or hire the repairmen?  How is he going to network with other landlords or people selling their property if he is anonymous?  Who is going to go look at properties?  who is going to sign purchase offers?  Who is going to sign the statement of consideration required in order to file a deed?  Who is going to send the letter saying you have 72 hours to quit the premises?  Who is going to testify about the renter not paying rent, and needing evicted to the judge?  An anonymous person.  That type of protection may have some application for some high worth individuals, who do everything through other people.  none and I mean absolutely none of the big investors on this site use this kind of program.  it does not work for hands on investors.

@Pat L., I invested in a cheap $40 power planer awhile back.  it is simply awesome for fixing doors that don't shut correct or need a little taken off of.  It works best if you can pop the hinges and take the door off, but it possible on some to plane them while still in place.  You do have to be careful about getting carried away with it and taking too much off.  With hollo doors you must really be careful to not plane to the place you have no door support left.

One of the biggest problems I see with rent control is housing turning into slums.  If you take substantially below market tenants you will not invest a lot of money to keep your property up, there is no incentive to fix it up.  Think about it you are $1,000 below market, are you going to put a new coat of paint on or replace that sagging board in the bathroom if you get the same rent?  Of course not.  Everyone is desperate for a house so they take what they can get.  Replae the carpet?  Why you get the same rent for new or old carpet.  What is really funny is the millionaires getting rent control like New York City.  Some of the large penthouse apartment units rented by the VERY wealthy end up being paying the same rent as a guy making $35K a year.  Eventually due to fines and lack of repair and lack of profitability, and huge taxes the state starts having housing get condemned and becoming derelict because there is no money in fixing them up and running them.  The list goes on and on.  Thinking the way you solve a problem is taking away rights from property owners and making them pay the cost of your program instead of having the government pay to fix the housing problem is not much better than theft.

Yes, but if you got to 100 houses and have a 50% vacancy rate, you shouldn't have been buying more.  Try buying one and worry about it before you worry about owning 100 units.

@Ashley Toombs, welcome to BP.  it is difficult to give you much advice without knowing more about you and your situation.  Factors like how financially stable you are, how experienced you are in real estate investing, what kind of investing you will be doing, like buy and hold, or flips?  If you don't have the money or experience starting now might not be a good idea, a good paying job would be better.  On the other hand sometimes we just need that extra push to start us going where we have been secretly wanting to go for a long time.  Either way good luck on your investing.

@Account Closed, I actually had to look up what a non-mortise hinge is hehe.  They look pretty cool.  I will definitely be using those if I run into a similar situation.  The doors I replaced were actually a tiny bit smaller than the doors I took out, so I didn't recess the hinges on them.  if any of them are tight I will just take a wood chisel and recess them.

I never realized how many options there were on doing doors.  it was fun expanding my knowledge for new solutions.

I was born in Rock Springs, but didn't grow up there, my mom is from Green River.  I will try to give a short version of the story about how Green River became the County seat.  Originally the County seat was in South Pass City from the gold rush.  Apparently some of the folks working with the county records were from Green River and their spouses lived there as housing was in short supply in South Pass City.  Well some of them became so dissatisfied they loaded up the wagon one night with the county records and deeds, and other important documents, and left in the cover of night and traveled back to Greeen River and set up shop in a building there.  They actually lost some of the official county records in the dark during the trip.  So by default Green River became the county seat then.  it is a story my grandfather told me.  He was born in South Pass City and my great grandfather's house still is there and has some folks living in it.

@Nate Julian, good job.  I have done a few seller financed.  Like any other deal run the numbers.  it is critical to find out what the needs of the Seller are.  Are they looking for long term funding say 15 years?  Or are they looking to get all their money out in a balloon payment in 4 or 5 years?  It is important to know.  I often mention the benefits of payment sin easing capital gains taxes if they have seen an increase in value since they bought it.  I also point out the property itself is great security for a loan, it definitely has value, and I mention how bad interest rates are in banks for CDs.  With CDs getting less than 1% interest interest they could could make 4 times that by holding a mortgage on the property.  You can always build in a balloon payment if they want, but it would be a great long term stream of income without all of the work associated with managing a rental.  They don't have to replace toilets anymore. I am sure the laws are a bit different in Utah from WY, but probably not a lot.  you might talk to a local title company to get an idea on the cost of doing a closing and getting a mortgage drawn up, so you have some idea of the expenses, and how long it will take to close.  They will want a down payment.

Thank you @Thomas S., @Kelly N., and @Wesley W. for the tips.  these doors are hollow.  They were only $25 per slab and they now match all the other doors in the house.  In hind sight I should have just upgraded to solid core doors.  this is my nicest rental and is next door to my personal residence.  It has been empty since mid November so I decided to fix several things up while trying to rent it.  then my carpet guy got thrown in jail, another worker had his mom pass away back east, etc., so I am doing a lot of the work myself.  My replacement carpet guy is horrible, i will probably have to redo some carpet seams.  it is looking like I may have to tile the bathtub as well.  With the time I now have invested in staining, adding poly coating, drilling out holes for the knobs, putting hinges on, etc. I could have just done hardwood doors and replaced the trim to match.  The current hallow doors have been there since the 1970s, so they held up pretty well.  We have had some pretty cold weather, some as low as 29 degrees below zero, so it is not a great time to get new renters, not a lot of folks moving in December, January and February, although I did redo another house that emptied in November and have it rented back out.  It has been fun trying out new things in the coring the new doors for locksets.