The flooding of the so-called real estate GURUs and their mass market game have not just a bunch of novices in the field of real estate but also floods investing the market with many grossly incorrect people, things contrary to what the law actually about this “creative” transactions says taught is created. In fact, the term has become creative, legislators, shady, predatory and deceptive synonym. Can creative real estate legal and ethically be done? Certainly! For the creative word means only to think outside the proverbial box come with a solution that works for all parties involved in the transaction; You have purchased a course or boot camp by many of the GURUs out there, is a strong chance that what you were taught, that it could get you into trouble.

Subject to invest and allocation of payments

Certainly must it be, to sign, if it collateral for a loan, right is illegal on the House to someone? Well, actually, it is perfectly legal. You own the House, a Deed? and you can sell what you have. But the loan remains connected the property with the property as collateral pledged. Name despite a transfer of ownership in the property remain loan referred to the borrower. These transactions have been quietly done in commercial real estate for decades, and “Loan(s) taken subject to” is listed on the HUD-1 settlement statement. That in and of itself proves that the HUD not these transactions as illegal display. But the problems arise when one hides the transfer. Almost all of the courses (with a few exceptions) teaching “creative” (i.e. shady, predatory and deceptive) way to do this.

What brings new “twist”, mortgage assignments or assignment of mortgage payments in one to invest called. The fact that no laws were broken when the property changes hands without the consent of the creditor, turn these types of courses. The loan has a required due clause (DOSC), which as the name suggests on sale, that the full balance of the loan with sale of the property are due. A breach of this DOSC is a beach of the Treaty. The lender may in its sole discretion, then call the note the full payment due. It is not likely that a creditor is a performing asset in a non-performing to make, because it affects what the Federal Reserve can borrow the lender (such as a million in non-performing assets the lender two Million?then three Times?then four times, punish etc.), and the Fed could close the doors of the Bank, if they get too high in non-performing assets, that we actually happened in the last few years have seen. So, if the lender receives payments (a performing asset), they will look likely different.

What these real estate gurus to tell you is, not that it’s not that banks will not hold means to do their rights simply because they, have, accepted payment of the new buyer in other words, not she waived this right. One of the exceptions by prohibiting the creditor from calling the note on the sale of the property is a trust relationship. This is where it will be interesting. The intention of the trial, that this exception is created, that family members without it violations of the DOSC property can transfer a family trust. But GURUs teachings, that a non-family trust relationships which hide the transmission, “to bypass the DOSC” amounts using, no less than Betrug.Und guess what? If you the help of the seller or direct to deny seller that the House was sold, then the conspiracy to defraud.

It is a popular subject to course teaches the send lender inform them a letter, that you are “the new property manager.” What do you think is? You guessed it-was! You are not the property manager you new Besitzer.So are all you, to conceal, hide, is or to hide was the sale in total. If you enter other help someone it is conspiracy. If you relate to someone in another State, it is an interstate crime and be prosecuted after the RICO (extortion).If you say something that is not true, not only is it a lie-it was. And fraud are by default can not at all to say something, if you omit a significant fact. This is some serious stuff, people! We are talking about a room with no view.

North Carolina twice tried to prohibit subject to transactions. In both cases, is it has he failed, because people should but the Attorney General said that if a trust is used, it is mortgage fraud, and to sell the right to private property in a free country, personally to anyone who does this.

Neither the seller of nor the buyer has a legal obligation, the lender said that the property sold; However, if you hide in any way, you can go to jail. Although none is due on sale prison, still amounted to fraud. Leave a risk is also the current insurance policy in place future Insurance Fraud?or in at least shed light on the intention to deceive the lender, because while you can only legally present on a directive, two apply as with intention. Together with the other, it would help to build the case against you.

The real problem with subject-to is if a home in foreclosure. Always follow the law, the letter in such cases. Many States have strict requirements, and a subject-to is completely prohibited and completely banned in Florida, if the seller behind the payments must. All subject-to on a Preforeclosure is risky, but if you give the seller the half of the equity, it can reduce the risk (what the seller a partner, in contrast to steal their home for little or nothing at all).

These types of investments methods are currently by several agencies.

After thousands of courses and seminars, which did not work decided Duncan finally enough was enough and decided to spill the beans on the shady world be the guru of the real estate industry. If you wants to learn more of fraud going on or any scammers tell your story, visit Duncan’s blog at http://duncanwierman.wordpress.com/

Net Lease Real Estate Investments

Passive real estate for both the investor and the investor’s heirs

By David E. Sobelman, Vice President, Calkain Realty Advisors and Benjamin R. Hanan, Shareholder, Abel Band, Chartered

Experienced, savvy and sophisticated real estate investors typically are inundated with decisions of what to do with their existing assets as they plan their estates. In many cases, individuals holding various types of real property may want to simplify their portfolios for the next generation for ease of administration and enjoyment.

Net lease investments (“NLIs”) are one of the most passive forms of real estate investment. Under an NLI arrangement, the investor purchases the real property subject to a “triple net” lease. In such case, the tenant is responsible for paying all of the taxes, insurance, and most importantly, the maintenance of the real property. By divesting of current real estate holdings and purchasing an NLI, the investor can ultimately simplify the investor’s real estate portfolio and have the ability to transfer assets to the investor’s beneficiaries with the comfort of understanding that little to no real estate experience will be required in order to manage the NLI. Additionally, depending on the type of asset purchased, the investor can assist in providing the investor’s heirs with (a) an income stream that extends into the future; and (b) an appreciating capital asset.

Investors concerned with the potential tax burdens associated with the sale of their existing real estate investments may consider taking advantage of the tax-deferred exchange provisions of Internal Revenue Code Section 1031 in order to effectuate their diversification into NLIs. Through the implementation of a properly structured tax-deferred exchange, investors can sell maintenance-intensive real property investments, defer the taxable gains on such sales and reinvest the proceeds in an NLI. Throughout the remainder of the investors’ lives, they can continue to enjoy the income stream and appreciation afforded by an NLI. Should a particular investor continue to maintain their investment in the NLI until death, the investor’s estate will receive a step-up in basis in the NLI to its fair market value as of the date of the investor’s death, thereby eliminating all of the deferred income tax on such real estate investment. Thereafter, the investor’s beneficiaries receive the following benefits: (a) a real estate investment; (b) an income stream subject to the terms of the NLI; and (c) an asset in which they possess a relatively high basis such that if they sell the NLI in the future, they can minimize the taxes paid in connection with such sale (or, if properly structured, such taxes can be deferred through a subsequent 1031 exchange).

Case Study:

Situation

For over 40 years a private investor had amassed a portfolio of New York real estate encompassing over 3,800 multifamily units. Over the four decades, the investor had personally managed and operated the portfolio with a small team of staff and advisors. Now in his late 60′s and with no heirs willing to undertake the management-intensive nature of the holdings, the investor was looking to gradually simplify his assets while maintaining a level of passive income that could be easier to pass on to heirs.

Problem

The size of the investor’s portfolio made it more challenging to find one single buyer since the assets are valued at approximately $420 million. Additionally, the sale of the assets, if not properly timed, would have triggered a substantial capital gain that would have drastically affected the net proceeds for the investor.

Solution

Staggering the sale of the assets within the portfolio to allow for much smaller dispositions and encourage an ultimately higher sale price, due to increased competition, would allow the investor the opportunity to use the 1031 tax deferred exchange code in order to find like-kind assets to purchase. The assets found for the exchange were real property occupied by tenants who signed long-term triple net leases, were priced in the $2 ” 10 million range and had a large scope of geographic diversification. Therefore, the passive income attained from the newly acquired assets coupled with the use of the 1031 tax code allowed the investor the comfort to plan for future generations’ passive income as well as eliminated the immediate capital gains taxes he would have realized.

Authors’ Biographical Information

Benjamin R. Hanan is a Shareholder in the Business & Corporate Counseling, Personal Services & Planning and Employment Law Practice Groups at Abel, Band, Russell, Collier, Pitchford & Gordon, Chartered. Also a Certified Public Accountant, Mr. Hanan focuses his law practice on corporate law and business transactions involving individuals, physician practices, and other entities, including entity formation, operation, business sales, mergers and acquisitions, employment arrangements, buy-sell arrangements, and equity owner agreements. Mr. Hanan also devotes a substantial portion of his practice to estate planning and family wealth transfers.

Mr. Hanan earned his Juris Doctorate degree, with highest honors, from The George Washington University Law School in Washington, D.C. Mr. Hanan attended the University of Texas at Austin, where he earned an undergraduate degree in accounting, with highest honors, and a Masters degree in professional accounting.

David E. Sobelman is Vice President of Calkain Realty Advisors, the private markets division of Calkain Companies. Mr. Sobelman focuses on single tenant retail, industrial, and office net leased investments. Mr. Sobelman is regularly sought out for his opinion on the national and regional commercial real estate trends and has been highlighted in prestigious periodicals including Retail Traffic, Commercial Property News, Northeast Real Estate Business, Globest.com, and many others.

Mr. Sobelman earned his Bachelor of Science degree from the University of Florida and is a former Presidential Appointee in The White House.

AP – Sales of existing single-family homes plunged in 2007 by the largest amount in 25 years, closing out an awful year that saw median prices fall for the first time in at least four decades.