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Question on Terms of the Proposal

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This topic contains 1 reply, has 0 voices, and was last updated by Avatar of rick rick 12 years, 11 months ago.

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  • #2895
    Avatar of rick
    rick
    Participant

    “I have a seller who wants me to explain #10, 13, 14. #10 I understand the due on sale, transfer tax, tax write off etc. What should I tell him the reason we are giving him the 10% interest and not 100%? Why do I get 90% and he get 10%? #13 This Offer shall become valid, enforceable and in full effect 30 days from the date shown below. Why would it not be in affect as soon as it is signed? #14 This one is self explanatory. Due Diligence on my part. Thank you”

    #18729
    Avatar of joecain
    joecain
    Member

    “Rick – Regarding the percentage of beneficial interest in the Trust that will hold title to the former owner’s property, the 10% is to allow the former owner to remain “”a”" beneficiary of the Trust and therefore avoid any possibility of the Lender attempting to call the Note due. The actual Trust Agreement will show the former owner as the holder of 100% of the beneficial interest in the Trust that holds title to his former property. In subsequent Documentation, he will assign to you as Investor Beneficiary and/or the future Resident Beneficiary percentages of his interest in the Trust. Structured correctly, all the Docs will be signed at about the same time. If this were a traditional real estate transaction, the Seller would have no right to claim any “”profit of appreciation”" for any future sale, years off, would he? Neither are you going to give him any in this transaction unless it is negotiated into your specific deal. I don’t have any of the specifics of your deal in front of me, but I can surmise that you have contacted a property owner and want to send off either the entire Proposal Template or just the NEO and Purchase Offer to secure their participation in what will eventually be structured as a NEHTrust with assorted multiple beneficiaries. Most (not all, but most) of these are structured by you as the Investor desiring to acquire 90% of the interest in the Trust to be formed (see reference to Trust Agreement above), leaving the current owner 10% during the term of the Trust, and likely transferring that 10% at the termination of the Trust, and locating a Resident to move into the property and become responsible for the monthly payment and thereby receive a share of the interest (50%?), as well. So, just as a refresher: 1. Title is transferred from owner to Trustee. 2. Trust Agreement is executed establishing a Trust with the former property owner being the sole 100% Beneficiary of said Trust. 3. Assignment Agreeement is executed assigning an unspecified percentage of interest in the Trust from the Settlor to additional parties who desire to acquire said interest. 4. Beneficiary Agreement is executed listing all rights, duties and responsibilities of all parties to the transaction, including the Trustee and all Beneficiaries. It is here that the specific beneficial interest percentages, dollar amount of refundable contributions, order of distribution of contributions and proceeds, etc. are outlined in detail. 5. Occupancy or Possessory Agreement is executed between the party to become responsible for the monthly payment and the Trustee as Landlord and recipient of said monthly payment. 6. Additional Documents are added as needed, including, but not limited to Limited Power of Attorney, Closing Cost Worksheet, Rider Agreement, Change of Address Forms, Authorization to Release Information Forms, etc. As for your other question, the date referred to is placed in the future to allow you a period of time to get all your ducks in a row and secure the participation of all the parties involved to complete this transaction. Nothing that I have written above is rocket science. All has been covered in Bill’s Seminars, in the NARS Documentation Manual and in the NARS Quick Start Success Pack, as well as in several telementoring calls and thousands of posts already in place on this Discussion Board. Please continue to study the materials that you have been given and most of this will all become clear eventually. Meanwhile, continue putting together any one transaction and Submit the info via this website so I can begin the Process of Documentation for your specific transaction at your earliest convenience. Most every question that I have ever been asked in over two years working for NARS could have been answered just by completing ONE deal.”

    #18730
    Avatar of rick
    rick
    Participant

    “Joe. I know these questions are redundant, however I am going to use this board as a tool to help me understand everything. I don’t have a problem with looking stupid here, I just know from 30+ years in the construction industry that when you learn from the best, you become like them. I appreciate all the NARS Masters on this board and look forward to learning all of them, if they let me. My first goal is to have an RB into a property by March 7, 2007 Thanks, :oops”

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