Trust Power Tools

There are hundreds and sometimes thousands of real estate investors in every community. I have been to many real estate investment clubs around the country. The meetings are attended by many seasoned investors and newcomers. In our 1031 exchange business we deal with investors all across the country. I sometimes ask the clients if they attend any local real estate meetings. Some do. Many don't.

I asked the questions because I see many investors that have made a poor choice of title holding entities. If they had more real estate education they would have made better choices. They invest with friends in a partnership. Later they find out it is very difficult, costly and sometimes not possible to do a tax-free exchange out of their investments.

If you total all of the investors that attend meetings some of the time in your area, then there are 3 to 4 times as many in your marketplace. If you do not have any better tools to use in your investments, then you are in an auction to the highest bidder with all the amateurs. Options can separate you from the crowd. Tax-free exchanges are a tool to use for your benefit and possibly for the other party in your purchase or sale.

Trusts offer several unique strategies that are not otherwise available:

1)     Contract for Beneficial Interest. This is similar to a contract for deed but avoids foreclosure. It is selling personal property on an installment sale. The buyer has no rights until it is fully paid.

2)     Lease Of a Beneficial Interest. This is not a lease of real estate but of personal property. It could have multiple benefits.

3)     Multiple Investor Beneficiaries. A technique for partnering without the formalities of deeded interests. No witnesses or notaries are required for transfers. The beneficiaries are free to take cash or do a 1031 exchange with their proceeds.

4)     Seller Financing the Beneficial Interest. It is selling personal property and avoids the need to foreclose to regain possession upon default.

5)     Personal Property Trust. It can be used as a trustee, LLC manager, a holder of notes, mobile homes, cars, guns, stocks, receivables and more.

6)     IRA Checkbook Control Trust. Moves your IRA funds from the custodian to your corner bank where you have the ability to make investments without the cost or delay of going through the custodian. All income from these investments goes to your corner bank, not the custodian. There is no cost or delay to reinvest these funds.

These are a few of the Power Tools that investors should have to elevate their investment system to a higher-level with better returns and more safety. All of these strategies and more will be covered in detail at the trust seminar January 23-25 in Jackson Mississippi.

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