Posted by dewCO on August 17, 2000 at 23:11:56:
I answered the how to form a trust in my first post. (Don’t see the numbers showing yo have cash flow, but since you do mortgages you should know.)
need help how to structure this deal - Posted by ali
Posted by ali on August 17, 2000 at 15:03:55:
According to seller its worth 115,000.00 ( which i have to verify ) he is building a new home which is going to be ready in mid october. Asking 95 and willing to make deal so he can by a new house.
current loan Amt 80400.00
equity in house 9600.00
I offerd him 90,000.00
I’ll pay his first mtg and get 100% credit and give him mthly payment on his 9600.00 @ of lets say 6% to 8% or may be no interest 
would like to know how would i create trust and get 100% credit on payment and are we going to have lease or wht as a contract,By the way this is going to be my first deal and if he is right then i have 25000.00 in equity and some cash flow every mth.
need guru’s advice how to structure this deal
happy investing
Ali
Re: need help how to structure this deal - Posted by Dave
Posted by Dave on August 18, 2000 at 16:40:03:
Pls tell me if I have this wrong - the cash flow here is negative for Ali - he’s paying the mortgage, and buying out the equity of the current owner. (In return for 90% interest in the trust, the owner letting go of his 10% at the end of the trust, and the tax write-off. However, for the tax write-off, Ali must be responsible for maint. and upkeep. And what if the res. beneficiary trashes the place in the meantime, knowing he’s going to leave anyway? Can the trust hold a security deposit from the res. bene. in the same way a LL holds one from a tenant?
Re: need help how to structure this deal - Posted by Bill Gatten
Posted by Bill Gatten on August 17, 2000 at 22:02:20:
First, create a 2,3 4 or 5 year land trust with a Mutually Agreed Value of 90,0000.
Have him assign a 90% beneficiary interest to you with an agreement to forfeit his 10% at the termination of your trust period. The retained 10% prevents reassessments for property tax, assists in avoiding conflict if the DOS were ever called to the fore. As well, it allows you to comply with the IRS relative to the minimum percentage that must be held by a beneficiary in a land trust (though since you are the one taking the write-off, he could hold as little as 1% and accomplish the same thing…but it may not make him feel as warm and fuzzy).
Next, you lease the property from the trust with payments equivalent to what’s owned on the first, the tax, insurance and what you intend to pay on his $9,600.
This is an easy one an the type of transactions we do every day.
Ali, by doing it this way, you save a lot of pain and the property is about as secure as it can get: you needn’t worry about his legal, financial or personal problems and he needn’t worry about yours. Furthermore, the ease of disposition if you screw up is something that will help sell him on the concept.
Good luck and nice going!
Bill Gatten
Re: need help how to structure this deal - Posted by dewCO
Posted by dewCO on August 17, 2000 at 20:13:38:
How are you going to “pay his first and get 100% credit”?
And then you are going to what? DO LO?
To find out how to create a trust, search back up from the bottom of these posts. There’s been lots on here lately on that subject (and I’m sure in the archvies to), but you do that when or right after you take title, depending on how you are financing this deal.
Re: need help how to structure this deal - Posted by ali
Posted by ali on August 31, 2000 at 24:29:13:
mr bill
how do i creat trust,i know you and mr bronkchik have some course, do i have to buy those in order to form trust or i can just ask my real estate attorney to form a trust for me,
wht do i tell seller
mr seller i would like to buy your house and i am going to assume your payment but we have to creat trust and i m going to be beneficery 95% and you 5%
your name is still going tobe on deed.
wht should or how should i put this in contract
appricate all the help
happy investing
Ali
Re: need help how to structure this deal - Posted by Ali
Posted by Ali on August 17, 2000 at 22:10:02:
I told him i,ll pay his mortgage directly and pay mthly payments on his 9,600.00 i guess i should have said seller financing.
Mr Bill has given me advice to form a trust so my next question is going to be how do i form trust.
Re: need help how to structure this deal - Posted by Bill Gatten
Posted by Bill Gatten on August 31, 2000 at 13:40:30:
Ali,
If your interest is in simply creating a land trust conveyance. I would suggest Bill Bronchik’s course. It has a full documentation manual on disk and gives you virtually all the information you need relative to single beneficiary and private trustee land trust transfers.
Bill Gatten