Thanks to everyone who attended the Option's Zoom call last Wednesday night. Kim and I had a blast talking real estate with you folks.

If you were on the call, you heard the great discussion that Sam Warf and I had.  After further thought, here is the follow up: 

First, on my Option Agreement and Security Deed, I listed "SEE EXHIBIT 'C' FOR LIST OF MORTGAGES AND LIENS ATTACHED TO SUBJECT PROPERTY AT TIME THIS OPTION AGREEMENT WAS SIGNED BY OPTIONOR AND OPTIONEE".  

Sam pointed out that there's a possibility, by recording the mortgages and liens that are placed against the property at the time the option is agreed to (as 'Exhibit C'), that this may cause a title flaw.  

Yesterday I researched this.  Sam is right.  Bottom line:  Listing the mortgages and liens doesn't provide you any benefits AND CAN LEAD TO A TITLE PROBLEM.  Key problem is, very few others do this.  

That said, I removed the 'Exhibit C' language from my Option Agreements and Security Deed (and Mortgage) that secures the option.

You should do the same.

Second, we discussed irrevocable trusts and alternate trustees.  Sam said he believes an Alternate Trustee can't be used with an irrevocable trust.

After some research, there may be certain trusts where Alternate Trustee are prohibited, but I've never used any of this trusts.  I've used irrevocable trusts a fair number of times over the years and have never had any problem with also using alternate trustees.

Third, we talked about the different ways an option can be valued if it's in your IRA.

If an Option is in my IRA, money from the IRA was used to purchase the Option.  IRS requires each option in one's IRA to be valued each year.  The question is, how on earth do you value an option, which may or may not happen, no clue when it will happen, and you may or may not know the actual strike price.  Consensus is to use the amount of your consideration, (the amount you can lose if you do not exercise) as each option's value.

Fourth, Sam does not service his wrap loans if his (or someone else's) IRA is involved.  That's a safe thing to do.

That said, in all my years I've never used a servicer.  With a wrap, where I'm the wrapper, I have the borrower pay me.  Then I mail payment to the lender I'm wrapping.  The balance I send to my custodian.

Bottomline:  The IRS is yet to define what 'service' means.  Thus far, no one we know has been attacked by the IRS for doing what I do on a regular basis.

Hope this helps clarify.  It was a great call and a fantastic back and forth discussion!  Thanks for joining in!

Oh, two quick reminders:

The 3rd in the 3-night FREE What Box? School ~ Lessons in Structure Stacking is this coming Monday night, August 8th, from 7pm - 8pm EST.  We'd love to see you on the call!

To pre-register, click here:

  https://us02web.zoom.us/meeting/register/tZckdO6prz0vHNwH_2Dpx7xkIvX7u7ZN3anK

Also, our What Box? Seminar in Tampa, Florida on August 20th & 21st just keeps growing!  Kim and I feel that real estate is the best way to financial freedom and financial wealth.  It has been a 30 year blessing for us.  We want that same blessing ~ that same financial wealth ~ for you.  We need you and your wealth of knowledge to join us at the What Box? Seminar.  Let's get smarter together!

Click here for more information: 

https://billandkimcook.com

Hope to see you soon!

Bill & Kim Cook

770 815-8727