small business loans
Question
is it worth it...cash purchase and then renting?
I have been looking for the perfect house for over a year and have yet to find it. I am thinking of building my house but I have not found the perfect land or decided on where I want it yet. I found a townhome that is for sale for $59900 for a 2/2 1106ft2. It is right next to the university. My boyfriend is renting in this same subdivision for $800/month for a smaller TH and my friend pays $1200 for the same as what I would get. So I know that if I decide to move/build I can rent it out. I started my own business a little bit ago so my income is harder for me to get a loan before the tax credit goes away. I was just let go from my FT job due to downsizing. My father is willing to give me cash to purchase a place and I pay him back. Options: 1)My father was going to buy it and then in 90 days I buy it from him with a mortgage per the laws. That would mean I do not get the $8K first time home buyer. 2) If my father gave me the cash as a "gift" would I be able to mortgage the TH later to pay my dad back since the cash is from the equity of his house? That way I would get the $8K tax credit. Also, would you get into this? The total PITI for the TH at full asking price would be $530/month and is not homesteaded. It's been on the market for a very long time with many price drops. It is now bank owned so I would deff ask for a lower price. It sold in 06 for $152K per the property appraiser. I wanted to ask here before calling my Realtor on Sunday since he has a very sick wife. I live in central FL. axaroth very good information!!! If my father is the lender to me and he files a lean. I understand I will be making monthly payments to him. Will the TH be in my name and will I be the one getting equity? I also have $17500 for first time home buyers assistance. If my father is my lender can I still take advantage of that assistance as it would reduce the loan further?
1 month ago - 2 answers
Best Answer
Chosen by Asker
Speaking generally, that sounds like a good potential purchase for your situation. Whether your dad pays cash and you pay him back, or you finance some other way, it sounds like your thought process is good. You know it's a good price to buy and what the potential rents would be later. Option one sounds like needless extra title fees and paperwork. Option two: the IRS wont let him gift you that much in one year, so that's out. Option 3: Have your dad be the mortgage bank for you. So he just loans you the money and you pay him back with interest. The only thing I would mention is that if your dad loans you the money and your name goes on the title, you have to go to the county and record the loan on the title. In other words, you ask to make your dad a lienholder so technically he could foreclose on you if you don't pay. The reason you need to do this is that the IRS won't let you deduct the mortgage interest otherwise. (they consider it a personal loan if your dad doesn't have lien rights on the title.) Anyway, good luck with it. Florida has been insanely overbuilt in condos and THs but it sounds like the one you want is well located for your purposes. Congrats--- go for it!
by axaroth
1 month ago
Asker's Rating: 
Other Answers
1) Consult a real estate attorney, NOT an agent. Agent cannot give legal advice. 2) Possibly 3) Did you calculate the "cashflow" for the whole thing yet? Will it generate POSITIVE cashflow if you rent it out? (Rent - mortgage - taxes - other stuff) 4) Ask a real-estate attorney as well, it's worth the $$$, as a realtor wants to earn the commission, not necessarily help YOU. --- Kasey C, PC guru since Apple II days Lottery: A tax on people who are bad at math.
by Kasey C- 1 month ago