Posted by nate on April 03, 2001 at 21:58:04:
Brian,
I agree with you - and frankly, unless the house is particularly expensive, a landlord’s policy just isn’t that much to pay for not having to worry about the lender getting all squirrelly.
Regards,
NT
Met with my lawyer today ------- HELP!! - Posted by ChirsNC
Posted by ChirsNC on April 03, 2001 at 20:58:32:
Hello,
Today I went to an uncreative lawyer today who tried to talk me out of using Land Trusts?s. My goal was to run some of the idea?s I have learned through CREOnline and the complete Legrand modules by him and to get my contracts looked over. He didn?t have any problem with my contracts but the whole concept of using Land Trusts and assignments of beneficial interests sparked an issue of legal interpretation with him. Instead of accomplishing what I had set out to do. I found myself bringing up The Garn St. Germain Act and explaining what I have learned. Well, his interpretation was much different from ours. To be frank, I don?t think he understood the whole situation to well. I gave him life examples to explain what I was trying to accomplish from a subject-to standpoint and non-qualifying assumable loan standpoint.
Members of my REIA GROUP have referred me to three lawyers. The first and the second were getting out of dealing with RE investors because they?re making to much money dealing with hassle free conventional closings. So here I am ready to go, finally found a lawyer (?), feeling confident about what I?ve learned and ready to just run this stuff by a lawyer ( that deals with RE investors) and hit the road. Well, he tried to inform me of better ways to do things like buying with land contracts and getting the deed in escrow. I understand that concept but basically I want to stick to what I have learned from ( Legrand & You All ). I feel confident with the system I have laid out for me to follow. I have done months of research outside of the Legrand system to gain a better understanding of concepts. I still had some specific questions about the process and still do now (no help from my consultation). The process I have learned is in my head and theory now (I?m green, but feel well prepared). I plan on putting it to use but the lack of someone who understands the process from a legal standpoint is holding me back. The fact being is simple: I need to have someone to close my deals that are able to see what I am trying to accomplish.
So What I am asking?
How do I deal with this situation? Of course my instincts say follow what you have learned and seek counsel elsewhere. I cant seem to find counsel elsewhere! This guy will close my deals if I choose to go against his opinion. But ?creating a team? involves having someone who is able guide you in the right direction. I have specific questions and because he didn?t understand/agree with what I was trying to accomplish he wasn?t of any benefit to me. I need to talk to some active investors who deal with the following on a regular basis: Land Trusts as 1) Liability Protection 2) In attempt to circumvent the DOS clause. The ways to deal with the insurance issue ( I have already done my research in the archive?s ? just need a little more 1-1 session). Finally, because I am green some of the actual processes I have never done before – I need some clarification.
Everyone on this board has been great and what I believe to be my greatest asset thus far. It is simply amazing how people here share their life examples for the benefit of everyone. The ability to share knowledge and techniques is what makes this business exciting!!
Thanks
ChrisNC
Re: Met with my lawyer today ------- HELP!! - Posted by RichardNC
Posted by RichardNC on April 04, 2001 at 12:27:07:
Chris,
Where in NC are you?
Richard
Re: Met with my lawyer today ------- HELP!! - Posted by Troy W. (NC)
Posted by Troy W. (NC) on April 04, 2001 at 07:41:19:
Chris, what part of NC are you from? I had the same problem with the attorney here in Fayetteville. He was the owner of the firm. (she refered me to her boss since she wasn’t sure) Didn’t seem to have a clue, so I decided to stay working with my attorney and put in the Land Trust and anything else that I feel will protect me. I’m also a Legrand student. I am also finding out that you need to stay with your gut feeling so that you won’t get burned. E-mail me back when you get a chance so that we can talk
Troy
Re: Met with my lawyer today ------- HELP!! - Posted by JasonWDTX
Posted by JasonWDTX on April 03, 2001 at 21:58:55:
Bronchick has an excellent article on his site that goes into great details about the due on sale.
http://www.legalwiz.com/dueonsale.htm
He covers ethics, lawyers closing them and much more. He even has several court decisions relating to the subject. I would print it out and give to your lawyer and ask him to read it. (also print out the court decisions). Maybe if he reads another lawyer’s researched opinion he may not be so closed minded. My attorney in Texas met Bronchick at an investor club meeting and read his courses and wrote a research paper for a Dallas real estate lawyer association and also for our investor club. He printed his opinion at Blast This 86 / Soon by wetter hört zu
The point I am trying to make is that if your lawyer doesn’t understand the trust he will be unsure and recomend something that he is comfortable with. You need to educate him. He may not take your advice very serious (after all, he is the Almighty attorney) but he may accept another attorney’s opinion and be more open minded.
Otherwise keep looking, once you find a good attorney who understands REI you will be glad you did.
Jason
Re: Met with my lawyer today ------- HELP!! - Posted by B.L.Renfrow
Posted by B.L.Renfrow on April 03, 2001 at 21:49:55:
That’s not an unusual reaction from attorneys when you bring up land trusts. Few of them have ever heard of them, or if they did, they likely slept through that lecture in law school. But, being lawyers, they are loathe to admit what they don’t know. So, they’ll try to talk you out of it, in favor of what they DO know.
I am in a fairly small town, where there aren’t many attorneys to choose from. And they’re ALL conservative, straight-laced types. But going an hour or more out of town to find an attorney in a bigger city just wasn’t practical for me. So I made an investment.
I picked an attorney I knew fairly well, who had represented me in another matter. He was young, not too long out of law school, and still looking to build his practice. I made an appointment, made sure he knew I was willing to pay his hourly rate for the consultation, and went in and sat down and explained exactly what I wanted to accomplish and how I wanted to accomplish it.
I methodically went through the various ways to hold title, and explained how the land trust fit into the picture and exactly what it did and didn’t do. He had questions. Most of them revolved around, “But WHY do you want to do this, when no one else does it? WHY not just do what works for other investors? WHY go through all this trouble?”
I kept hammering on the same basic points: privacy and anonymity. I showed him how holding title in any other way didn’t offer the privacy of the land trust. I pointed out scenarios – not at all unlikely – where the shield of the land trust could make all the difference between a good outcome and a disaster.
As I talked, he remained interested. He asked intelligent questions. But after an hour, I could tell he was still not entirely convinced. So I offered to loan him Bronchick’s land trust course for as long as he wanted it. He took it…though to this day, I don’t know whether he actually read it or not.
And then I started doing land trust deals. I didn’t involve him in all of them, though I did on the first couple, and any others which gave any hints that they might not be routine. And he gradually “got it.” Although, for at least the first year, he’d ask me from time to time, out of the blue, “Now tell me again why you like to do it this way?”
Now, he’s a convert! He sees firsthand that they DO work, and by golly, they ARE legal. In fact, he just gave my competition a mini-course in the benefits of using land trusts after some ill-informed and ignorant folks accused me - falsely - of being somehow underhanded by “hiding” behind the land trust shield. (See my post about the sheriff, below.)
Though it might seem backwards, YOU have to be the expert when you approach the attorney. Do your homework. Know the course and the paperwork inside and out. Anticipate his questions and concerns (they’re always essentially the same). Don’t think you can just go in and announce that you want to hold title in a land trust and he’ll take it from there. It might seem like the lawyer should be paying YOU for the education, but it’s really in your best interest to be sure he’s educated properly so he can provide you with the best possible service.
I’d strongly suggest you get Bronchick’s land trust course. I haven’t seen Legrand’s course, but from what I’m told, the contracts are a bit lacking. Bronchick, by virtue of being an attorney, carries a certain credibility with attorneys that other authors won’t have. I know that made a difference in how my lawyer viewed the whole thing.
As for your question about how to handle the insurance, there are several ways. I just discussed this very topic with several other investors in Atlanta. I start by using Bronchick’s letter to have my seller notify his insurer to change the policy to a landlord policy and change the name of the insured to the trust. Some insurers will. Several will want to re-write a new policy in the name of the trust, instead of amending the old one. That’s OK, but it does result in possibly unwanted attention from the lender. Others are simply leaving the existing policy in place, assuming the premiums are paid through the lender’s escrow account, without notification to the agent. Then, they go out and buy their own policy, without naming the lender (which is legal, according to Bronchick, as long as YOU haven’t signed on the mortgage and note). If a loss were to occur, the claim would be filed with YOUR policy, NOT with the homeowner’s policy, since that claim would be denied anyway since the homeowner would no longer have an insurable interest.
The down-side of doing it this way is you’re throwing away the money on the first policy. But the benefit is there’s no notification to arouse the lender’s suspicion.
I am leaning toward taking this approach in future deals. It seems a small amount of money to throw away to avoid facing a messy and prolonged battle with the original insurer and/or lender. I am dealing with one of those right now. It’s not the way I really want to spend my time.
Brian (NY)
Re: Met with my lawyer today ------- HELP!! - Posted by michel Payette
Posted by michel Payette on April 04, 2001 at 06:02:41:
Jason,
I’m in Arlington, TX. Who is your attorney? I’m in search of a good one myself.
Thanks!
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