Structuring First Deal
I and my partner have a over 40k to invest in our first property and have been looking for some time with no luck in finding a great deal. Low and behold one fell into our laps but we are trying to structure this deal using the least amount of our cash. We have been offered a house that is currently appraised at $250000, purchased for $230000, and loan balance $215000. They have only lived in their house for 6 months and want to avoid capital gains at all costs. Any suggestions or ideas of how to structure this deal to make it work best for everyone??
Take over the deal subject to. Get a tenant buyer in the place. When the the t/b excercises his/her right to purchase, you cash out the original owners.
Good Luck!
[addsig]
8-) Sounds like you can make some money here without putting your 40k into it.
Like Matty said, you could do the deqal subject to the 215k loan, however, if the seller is credit conscience, I would perhaps do a lease option with the right to sublease. That way there is no transfer of title and no sale as of yet either.
You can set up the deal with a lease option from the seller for the 230k.
Hopefully the loan is low interest with monthly payments low enough to allow a little positive cash flow from you T/B.
You can sell to your T/B/ for 260k with 10k non refundable option deposit. He will owe the 250k when he gets financed within 2 years.
Your seller might want a little down to do the deal like that so you can give him 5k of that 10k you just got. Now you will owe him 225 when the home is financed. That leaves 25k on the back end for you.
In this deal you would make 5k up front, without using any of your own money, a little cash flow, only you know that, and then the big payday at the end of 25k. The 250k the buyers owe less the 225k you owe the seller!
Title did not transfer, so he still owns the home. The only thing is that you would need the T/B to live there for 2 years, that way the seller would have owned the home for 2 and a half years and according to what I know, that would be enough time to not pay any cap. gains.
Anyway, just an idea and wish you the best with this deal. Have a great evening.
[addsig]