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Form New Nevada Corporations
Just For Your Fanciest, Riskiest Deals
   by Ray Como   

Recently I took control a piece of Real Estate in an exhilarating way. Jump start your greed glands because here is the deal...

  • Nothing Down
  • No Interest
  • No Payments For a Year
  • No Collateral
  • No Liability
  • No Credit Check
  • No Bank
  • No Attorney
  • No risk
Wow, and I did it. I did it all. All the paperwork. All the marketing. All the negotiating. All the correspondence. Everything. I structured a one year lease with nine options to renew the lease, each for another year. I Coupled with that, a separate option-to-buy "the equity" any time on or before ten years, at today's price. I formed a new Nevada corporation specifically for that deal and I contributed the deal to the new entity as capital. In Nevada, you can contribute as capital…cash, property or services.

"At arms-length" I personally agreed to loan the fledgling new corporation the money it needed to get going and finance the rehab. "...At arms's length" means I became a secured creditor by virtue of a fully and properly executed interest bearing note secured by the stock. Then, I "master-leased" the entire deal to another visible, active corporation (where I am merely an employee). This corporation will undertake the rehab work, take all the risk and liability, and perform the everyday duties of management.

A sweet gambit? Yes, but not a gamble. Indulge me a moment. I did not execute a ten year lease. I executed a one-year lease with nine one-year renewal options. My exposure, or liability under the lease is limited to only one year at a time.

Notice that I contributed the deal (in essence, the property) as capital, then I loaned the money the new corporation needed to operate.

If something goes haywire, the corporation gets quickly severed—the new deal turned-sour with it, and me? My loan gets paid off first because I deliberately positioned myself as a secured creditor.

I said "I master-leased" the entire building to a risk-taking, thrill-seeking corporation who is willing to "take the heat" and get sued because it works so hard at staying judgment-proof.

Notice that my option is an option to buy "the equity," not the sale price. This structure allows me to get the benefit of both the appreciation and the amortization of the loan.

Lastly, if I want to sell or exchange the deal (under IRC 1031 or 1034), I need not disturb it. I simply sell, pledge or otherwise assign the stock. Do you get it? The integrity of the structure of the deal (the only asset the corporation owns) remains intact. The stock is what changes hands.

By the way, this gambit is totally private and will effortlessly circumvent any due-on-sale clause simply by virtue of its private nature. Remember, stock transfers are not recorded publicly, therefore the whole transaction can be done on the golf course or even at a picnic in your back yard.

© MMI By Ray Como. All Rights Reserved

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Ray Como has created, produced, copyrighted and self-published 15 audio cassette programs and lots of other forms and tools for business, real estate, corporations, selling, marketing, finance, management and Entrepreneurship.
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