All Forum Posts by: Robert Gilstrap

Anonymity means if you don't know who to sue then you can't sue until you figure it out. The higher the hurdle to start a lawsuit the less chance of one being filed.  When a lawyer sees a trust in one state who has a trustee residing in another state with beneficiaries that might possibly reside in a 3rd state or even in another country he stops in his tracks and asks his potential client for a huge retainer in order to proceed.  

The owner. Nobody can predict whether someone will pay or not. Good screening helps but doesn't work 100% of the time. You can usually work out some deal where they replace the tenant at a free or reduced rate depending on how long they have been in the unit. 

I have placed 800 credit score tenants who defaulted their first month and I have placed 415 credit score tenants who paid like clockwork for 4 years. There is little rhyme or reason.

I'm OK with violating the banks policies. I don't like banks much anyway. 

Short of someone reading my mind there is no way to know who the beneficiaries are of any trust agreement I have.  Yes I can get sued personally but to what end?  I own nothing in my personal name. 

Maybe you know some people it's happened to but in 24 years of investor meetings, seminars, etc. where everybody always brings up what "could happen" I've never, not even once, encountered someone that had a loan called due to a transfer into an entity. Banks like 1 thing; collecting payments. Calling loans due means payments stop. The notion that banks just out of the blue spend money hiring skip tracers to track someone who "might" have transferred a property out of their personal name into an entity is just unbelievable to me. What possible rationale would there be for the bank to spend their money on a loan thats current?  Now I agree that if you stop paying that a bank might do all sorts of things but absent that I can't see them taking any action.

When you say it's not hard to find out who the beneficiary is behind a trust I need some enlightenment. Absent a court order or a voluntary statement it's impossible to know with certainty who a beneficiary is although I would be interested in the methods used by professional skip tracers.

I agree 100% that insurance is important but it is not a protection by any means. Insurance doesn't cover intentional acts, doesn't cover lots of things you might assume it does and what can you all this time while you're sitting in court waiting? Nothing. You can't buy anything, you can't sell anything. You're stuck like Chuck if you own property in your personal name. A lawsuit for me is just an inconvenience because nothing is in my personal name. None of my bank accounts, none of my properties, none of my vehicles.

I will now climb down off my soap box...

Agree with Micah and MIchael. I have dozens of LLC's and a very good CPA. No tax advantage at all. LLC's are for legal protection and trusts for anonymity. My preferred way to hold title is in a trust with the beneficiary of the trust being one of my LLC's.

Also don't let due on sale stuff stop you; I have never had a due on sale called in 25 yrs nor do I know of anyone who ever has. Banks aren't out checking deed records they are too busy cashing your checks. 

Knowing all I know now I would never ever hold property in my personal name under any circumstances.  

If you aren't paying for it then I can almost guarantee it isn't being done and if it is; it's being done poorly. One of the biggest secrets in property management is that most companies never perform inspections. They tell you they do drive by's, they tell you the maintenance guys check on it when they perform maintenance, they tell you they have staff do annual inspections, etc. For most companies it just isn't true unless you are paying for it.

Think what it costs to send someone out to a property and do an inspection: At least $75-$100 in most major cities. Now do the math on what a property managers fee is each month for managing that property. So are they gonna give up 1-2 months management fee income to go inspect your property? 

Assuming you even need a trust account (check laws regarding managing properties you own) it is NOT just an account with the words "trust account" on it. A trust account is a specially designated fiduciary account and falls under different state and federal banking laws where you are responsible for the holding of other peoples money (thus trust), is not subject to bankruptcy, has individual FDIC limits for each depositor, etc.

Get educated first and then work with a knowledgeable banker.

Chris,

I own a mgmt company in Atlanta and much of what has been said here is right on. Research, interview, ask lots of questions and in the end remember the reason we hire anyone to do anything: We want to trade our money for the other persons time, talent and skillset. The added benefit is that anybody who does something for a living almost always can do that task better, faster and cheaper than we could do it ourselves. 

I can only speak from the perspective of NARPM but I definitely think it carries weight. I have both an RMP (Residential Management Professional)  and MPM (Master Property Manager) designation. These took years to achieve not weeks or even days like typical Realtor designations.  Because of the stringent requirements they signify the best of the best. 

To give some perspective: There are 408 RMP's (Residential Management Professionals)  and 168 MPM's (Master Property Managers) in the entire United States, 10 MPM's in my state of Georgia. 

The only thing more exclusive is CRMC (Certified Residential Management Company) where your entire company is certified over a very long detailed process with on site audits, etc. There are only 30 CRMC's in the entire US. 

Are they a NARPM member!