Gatten "PacTrust" works! - Posted by Bill in OR

Posted by Bill M on November 21, 1999 at 16:34:51:

I know how many people feel who read this forum. Geez, can the PacTrust program REALLY work like you say it does… and, isn’t it just too complicated?

Well, it does take time to understand the full benefits the PacTrust system. That’s the only hurdle. Once that’s behind you, it’s really not complicated at all. My pea sized brain was able to figger it out, albeit after several assists from you via email :slight_smile: And with the documentation package I purchased, I generated a transaction which will reward my work with almost $30,000 over 3 years… on just one lil ol house.

I used the PacTrust program on a 20 yr old home on 2 acres just 2 miles from the Hospital in Bend, OR…about a 4 hour drive from my home nr POrtland.

Why a Pactrust, and not a lease/option/purchase, etc?

Several reasons…

  1. Safety- didn’t trigger due on sale; seller and/or buyer’s financial and/or tax problems would not affect title;
  2. I was able to increase the “rent” payable by the resident by over $450/month (as compared to rental previously charged by landlord). This stopped owner’s negative cash flow. The resident LOVED that idea, since they could now deduct the interest and property taxes they paid. slick.
  3. REsident’s initial investment is NOT at risk, unlike it is in most lease option agreements. No problem with disguised financing issues, either. Property will be sold in the future and proceeds split according to upfront agreement… but resident MAY buy from the trust. If he/she doesn’t, it still doesn’t mean they forfeit their initial deposit (unlike most lease/purchase /options).
  4. As an 'intermediary", I never had to commit to being liable for payments should there be a default. Most Sandwich LO LP would keep you on the hook. I just became a 'priority payee" when the trust assets are distributed. I like that idea.
  5. No taxes due on transfer- Owner gets benefit of 1/2 of future appreciation and ammortization, should that occur. Also, had a contract sale been written in stead of the Land Trust, and the buyer defaulted, the entire deferred gain would be taxable… even though no cash would be available!! OUch! Not so with the Trust.

Why don’t more people use the PacTrust?

Frankly, I think it’s because they don’t take the time to learn all it’s many uses and benefits… to both 'buyer" and “seller” … as an alternative to contract sales or lease options/purchase deals.


Shoot- once you can show owners and prospective owners how to benefit from a well drafted PacTrust, the BEST use of your time and money is finding more deals- let the paperwork be generated by the paperwork specialists. Knowing that experts are drafting your deal and taking full responsibility for it is well worth the cost! You can do it yourself, of course. But you earn about $10.00 an hour. Time you could put to far better, more profitable use!

Thanks for this terrific tool, Bill. Really, I think anyone who doesn’t use this creative, benefit laden system, thinking it’s “too complicated”, is simply mistaken.

Bill M in Oregon

Gatten “PacTrust” works! - Posted by Bill in OR

Posted by Bill in OR on November 19, 1999 at 14:06:34:

For those of you who wonder if the “PacTrust” approach to creative real estate works… I can assure you it works, if you do.

I just closed a transaction using the materials I purchased from Bill Gatten. He was a GREAT help in putting the concept together for my teeny brain.

I had an owner in CA, who owns a property in Bend, OR. They were negative about $450/month.

I found some folks who were short on cash, recent health related bankruptcy (but excellent income).

I worked out an agreement with the owner to jointly 'fix up" the home a little. They pay the first $4K, and I pay for anything above that. Then, we agreed to split sales proceeds 50/50 above the loan balance, costs for repairs, and costs for closing.

I found the “buyers”, who explained their situation and it sure looked like an ideal “pacTrust” deal to me!

Ended up… resident beneficiary took over all payments due the lender (and that removed the negative cash flow); Non-resident beneficiary has a good contingency deposit; Non-resident beneficiary “locked in” todays equity-which I share 50/50-; and both parties also split any future appreciation 50/50. No current tax problem for owner and in the event of “default” no taxes to declare (unlike a contract sale). Resident acquired the beneficial interest with an assigned “Mutually agreed Value” which was $18,000 under assessed value.

Oh yeah, I also came out with a $1,000 for my trouble at closing and a deferred payout of $29,000 when the resident refi’s in 3 years, or the property is sold, whichever occurs first.

The PacTrust allows for all the creativity you’ll ever need to put a deal together. And it does so without triggering untoward tax problems, “due on sale” violations, reduced risk from the financial problems of the other party, while transferring the interest and property tax deduction to the resident.

What more could anyone would want… other than cash out…? As a means of putting together deals as a 3rd party-hey, this takes virtually all the basic objections away. Far better than lease options…for both parties.

Thanks, Bill!

Bill McKee

Re: Gatten “PacTrust” works! - Posted by DanM(OR)

Posted by DanM(OR) on November 22, 1999 at 10:20:34:


Congratulations! Glad to hear success for a fellow Oregonian. Where in ORegon are you? I am in Bend.

Email me at djm@bendnet. com

Dan Matejsek

No!! Get out’a this town!! Really?? - Posted by Bill Gatten

Posted by Bill Gatten on November 21, 1999 at 15:43:47:


Perhaps you could 'splane what you mean by “better than Lease Options (then I’ll send you the check for the testimony).” I get whacked on the Zamboni everytime I try to shoot that particular puck (as it were).

We promote the NARS PACTrust™ as “the way to DO” lease options (i.e., the best way to accomplish the same objectives and end result without the inherent disadvantatges): not as an alternative TO them (God forbid…there are just too many folks selling L/O books and courses out there to ever say such a thing ('tantamount to suggesting that someone’s first-born looks like a monkey).

Also, could you tell Piper and Branstetter that you did it all yourself with our doc manual, and didn’t have to pay me anything to facilitate it for you (some seem to think the system is designed to force folks to come to me for help…pardon the nasality in the expression: but that s’not so. We just remain at your beck and call should you need us…you didn’t…some do).

My sincerest heart-felt congrats on your first PACTRust™ of many more to come!

Bill Gatten