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EHTrust™ – Investor Benefits

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Overall, the Landtrust.net Equity Holding Trust™; is a title-holding device that allows for easy conveyance of ownership, and incidents of ownership (including tax write-off benefits). In the arrangement, a 3rd party trustee, whose actions in dealing with the property’s title are wholly at the direction of the beneficiaries, holds title to the property. Upon one’s becoming a beneficiary, all or a portion of that beneficiary interest can be sold, traded, transferred or hypothecated by means of a simple Assignment of Beneficiary interest. In that the lender’s security interest is not impinged upon when a property is placed into such a revocable trust, Federal Law eliminates the need of involvement by, or permission being required of, the secured party in the underlying mortgage loan (FDIRA, 12 U.S.C. 1701(d)-3).

Investors may utilize the Landtrust.net PACTrust™ in various ways. For example, anytime a seller is willing to remain on the existing financing (keep their names on the loan), the Landtrust.net PACTrust™ becomes an ideal vehicle for acquiring the property conveniently and anonymously. That is, easily, quickly and without Public Notice (Recording), as well as without the potential for the triggering of a mortgage lender’s Due on Sale provision. The No. Amer. Realty Svcs PACTrust™ tends, in-fact, to effectively protect the property against liens, suits creditor judgments and even IRS tax liens on behalf of either party. Also avoided is the necessity for dangerous or marginally unethical Creative Financing schemes. Without the necessity of subterfuge or deceit with respect to a lender’s security interest in the property, the PACTrust ™ becomes an ideal acquisition vehicle.

The Landtrust.net PACTrust™ may be seen an effective legal shield for virtually ANY creative financing objective. It can, in essence be tantamount to a Long Term Lease (i.e., a lease for more than 3 years); a Lease Option; a Lease Purchase, an All Inclusive Trust Deed, an Equity Share Arrangement, or a Land Contract (e.g., Contract for Sale, Contract for Deed, Contract for Warranty Deed, etc.). The Landtrust.net PACTrust™ can meet the objectives and functions of any of these arrangements without the many risks associated with them.

A Co-Beneficiary Landtrust.net PACTrust™ can be set up for up to twenty years, with a Lease of the property to a Resident Co-beneficiary for 2 years, eleven months and twenty-nine days. The lease with the trust will stipulate that at the end of the original lease term, the tenant may “hold-over” in the property until the end of the trust period, unless evicted sooner. Since an eviction would have to be by mutual direction by ALL beneficiaries: the tenants being one of the beneficiaries, protects him and effectively continues his/her holdover until the termination of the trust.

AS AN AITD (Wrap-Around):
A seller places its property into a Landtrust.net PACTrust™, assigning a full Beneficiary Interest to the “buyer,” with the agreement that the property will be leased to the co-beneficiary on a Triple-Net basis for some specified period of time. The property is then scheduled to be sold at the end of the Agreement. Upon sale there is a distribution of proceeds to (between) parties with respect to each of their proportionate shares of Beneficiary Interest. In order to avoid reassessment for property tax purposes, and to justify mutual Power of Direction, we recommend that the shares of Beneficiary Interest remain at 90%:10% in favor of the “buyer.” Then at the end of the term, the “seller” can forfeit its 10% in consideration of the co-beneficiary’s prompt payment record and strict adherence to the contract.

(Contract for Deed): Benefits are the same as above.

The property is placed into a No. Amer. Realty Svcs PACTrust™ with the understanding that, at the end of the Agreement, the property will be sold to the Resident Co-Beneficiary for Fair Market Value, minus any and all sums owed to the Resident Co-Beneficiary. In this scenario verbiage is such that there is actually no “Option” per se; and that there is no “bargain buy-out” provision other than “…at Fair Market Value, less amounts due the respective beneficiaries.”

Same as above, except that the Agreement provides that the property will definitely be acquired by the Resident Beneficiary at termination irrespective of market conditions, relative values, etc. The Rider in this scenario provides that the co-beneficiary has the obligation either sell or refinance at termination.

Same as above, except that parties share 50:50 in the Beneficiary interest within the Landtrust.net PACTrust™, with an agreement to share all net profits proportionately at termination

AS A BRIDGE-LOAN DEVICE (e.g., when a buyer can’t finance, or afford a down payment for several more months or years and the seller may be willing to wait awhile): The No. Amer. Realty Svcs PACTrust™ affords such a buyer the opportunity to live in the property, while paying all costs and enjoying all the benefits and incidents of homeownership, including tax write-off and waiting until financing and outright purchase is possible. In this scenario, the No. Amer. Realty Svcs PACTrust™ is set up to coincide with that point in time when the property can be purchased outright by the Resident Beneficiary.

AS A VEHICLE FOR HIGHER RENTS AND FREEDOM FROM ACTIVE LANDLORD RESPONSIBILITIES AND COSTS: A prudent landlord would be well advised to consider making his rental tenant a Co-Beneficiary in a Landtrust.net PACTrust™ in which the rental property’s title is vested. This will give the landlord an ideal opportunity to trade such items as tax write-off, equity, equity build-up, appreciation and the psychological peace of homeownership, for such commodities as free maintenance, repairs, upkeep, management… and much higher rents. Each one of these “items of trade” has a value, and giving up all or some of each one can more than double rents while simultaneously [greatly] reducing the expense of renting for the tenant.

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