An Equity Holding Trust vs. Lease-Option(Part 1 of 3)
Over the next couple of weeks, we will learn a little more about buying a property using a Equity Holding Trust instead of using some other form of vehicle.
You can negotiate an OPTION to buy the home using and Equity holding Trust with a Triple-Net Lease.
THE OWNERS DON'T LOSE ANYTHING by setting this type of deal up inside of an Equity Holding Trust, which YOU PAY the EXPENSES to activate, giving YOU POSSESSORY CONTROL to complete the repairs, improvements, pay ALL the Taxes, Insurance, etc.
Also, if you DON'T Live up to the agreement, the Owner CAN EVICT YOU, and YOU LOSE OUT ON ALL of YOUR Money & Repair COSTS!
In a Land Contract the Owner would have to take you to Court through ...
a JUDICIAL FORECLOSURE proceeding. THIS IS A VERY EXPENSIVE PROCEDURE.
In a Equity Holding Trust the Owner retains his interest in Name ONLY, the TRUSTEE Controls and Directs the EHTrust and both You and the Owner are Co-Beneficiaries inside of the Trust.
The EHT protects you and the owner from liens, lawsuits and/or judgments. The also AVOID Capital Gains Taxes, Transfer stamps and or local taxes from the agreement, because the title remains in the name of the owner, but the possession and right of ownership belongs to YOU.
You could turnaround and re-sell the property for a price higher than you agreed to with the original owner---then transfer your rights to possession as a co-beneficiary along with your obligation to the seller(also a co-beneficiary in the EHT).
A Land Contract doesn't allow the AFFORDABILITY, Ease and Flexibility which you have with the Equity Holding Trust.
Did I mention that your possessory control is given to you by the owner through a Triple-net lease? This type of leasehold allows you to DEDUCT 100% from you Income Taxes, all interest payments, fees, and expenses on this deal.
The owner PROTECTS himself as well: The Seller in an Equity Holding Trust arrangement can SHELTER 100% of INCOME Received UNTIL the SALE CLOSES.
Unlike Installment Sales, and Equity Holding Trust transacts its business trough SILENT Transfers of Beneficial interest, and the Trustee doesn't Record Title transfers until the Termination of the Trust agreement(Which occurs at the time when All Parties to the Trust: co-Beneficiaries and Resident Beneficiary/if any).
Explain this to the owner(let him read this article) then Call me I will be happy to talk with he and you about the Equity Holding trust agreement.
Next week we will find out more about this interesting vehicle to purchase a house.
Posted this before, but it disappeared:
Isn't this the same as the old CalEquity PacTrust, which has been around for years? If not, what are you doing differently? (See www.landtrust.net).
Marc
The author of this article is a Network Member of NARS and Bill Gaten's PacTrust. I think he is doing a great job of promoting himself and what I concider to be one of the best ways to invest in RE today.
NUTHIN!
It's the PAC-Trust/NEHTrust are the exclusive methods I use to establish Ground Partners for Creative No Money Down Real Estate Investments nationwide!
So "Shy' What up? Are you doing PACTrusts?
Been around Years now tell us all here on TCI how well you've done using them?
Much Success!
Derrick Ali
I'm not sure that I'm in the right place for posting questions, but I hope so.
I am not familiar with the term Equity holding trust, and wonder if it may be the same vehicle as what is referred to in NY as a Land Trust?
In a (NY) Land Trust, the property owner is the holder of the "Beneficial Interest", and hidden through this vehicle (Land Trust).
The "Frontman" or person/entity visible through public records is the Trustee who serves at the discretion of the holder of the "Beneficial Interest".
Is this the same animal by a different name?
Thanks
Tom