Legal Two Family Deal

Hello,



I used to frequent these boards when I was 21 or so. I thank you all you’re your help in the past. I am currently 25 and I own a Coop in Yonkers NY. I purchased it 4 years ago for $90k and it is worth a little of $160 today. The reason I am writing today is I am seeking advice on purchasing a 2 family property (3 beds over 3bath) from my grandmother. She has been there for over 50 years and the house if fully paid off. I will essentially be getting the house for a price of 80% of the market value perhaps even less. This is because she is not dealing w/ a broker and also b/c I am her grandson. I will be purchasing this jointly with my girlfriend I was hoping to get advice from someone as to the tax treatment or how I should handle this transaction. I pre-qualified for a loan regardless of how we handle this transaction. Please let me know if you have any questions or need any more information. I thank you all in advance for your help.



Thanks,

Steve

Comments(4)

  • cjmazur23rd October, 2007

    Congrats on the coop!

    a couple thoughts:

    Do you REALLY want to buy it w/ your GF
    .
    If you do make sure you have a TIC or some form of agreement in place to protect you.

    Have you consulted a CPA

    there might be some tax advantages in how the deal is structured (e.g. she could gift you 12000 in 12/07 and another 12000 (indexed?) in 1/08)

    Is this going to be your primary reseidence?

    sell co-op and take all your profit take free (assuming it was your primary residence)

  • Twinkdogs2323rd October, 2007

    Thanks for the advice cjmazur.

    I actually met with the mortgage company last night and the route I am looking to go is keep my coop and make the 2 family an investment property. I am comfortable buying this jointly with my girlfriend we have been together over 3 years and have lived together for a year and a half. Making this investment is taking another big step. We are approaching this as an investment.

  • Twinkdogs2323rd October, 2007

    The rational is to move up and make an additional investment. I will not be selling the coop. I will continue to own it and earn equity in the property. The two family property can be rented for $3400 a month + $500 when my brother moves into the finished basement. The mortgage +insurance +taxes wouldnt be over $3200. Not to mention the +100k in equity I could get from the price I am getting. So my rational is cash flow and tax deductions. 4 or 5 years down the line I may sell my coop and make the 2 family my prime residence.

  • cjmazur23rd October, 2007

    I was thinking make the duplex your primary residence as quickly as possible to get another bite at the 250K exemption.

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