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 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?
- Safety- didn’t trigger due on sale; seller and/or buyer’s financial and/or tax problems would not affect title;
- 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.
- 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).
- 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.
- 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