Gifting Equity
Can anyone explain to me how gifting equity works? My sister and I are trying to get our parents to gift us the equity in one home they own so we can begin investing in real estate. My mother currently has a 30k mortage to pay on this property and has approx. 30k in equity. Any ideas as to how this works and what would my mother have to do? She is currently out of work...would that affect it? Any information is appreciated
You need to contact a tax advisor and attorney. However, I would look into using a vehicle such as an LLC, or a family limited partnership to accomplish this.
Conventional financing on non owner occupied property is frequently 15-20% down.
I would however check around with another mortgage broker and see if they have a better program for you.
What about having he owner carry the note for 18 months and you will seek financing after a year? Ifyou have interest in the property, have been making payments, and have a job you will have a better chance of getting good financing.
I helped my sister do one in St. Louis two years ago on the south side. Purchased at 65K 5 K in repairs sold 120K.
Good Luck!
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