Posted by Ed Copp (OH) on June 06, 2005 at 21:23:53:
I just mean to point out that there are things that can go wrong, so do your homework well.
Contract for sale in FL - long - Posted by leslie -FL
Posted by leslie -FL on June 04, 2005 at 15:37:57:
I’m hoping Florida investors, or any investors, will advise me if there are negatives to buying under contract for sale (or agreement for deed) and then selling under a lease option. This would be in the case where the seller is motivated but is worried about selling subject to, where he would give me the deed but remain on the loan. My object is to avoid the jump in taxes in Florida, and to postpone closing costs, which a buyer can’t do if he buys a house conventionally.
If you think this strategy is doable, would payment to seller typically be a flat rate to cover PITI, or would it be an interest only loan? And is there usually a deadline when the buyer must get financing and pay the seller off, or is it wrritten without a deadline (?) where when the buyer can get financing, he gets to buy the house? I think I could protect myself with a deed in escrow and/or a performance mortgage.
And finally, I believe that with a contract for deed, I, as the buyer, would be entitled to the tax deductions including depreciation?
Thank you for reading this long posting.
Re: 1 or 2 drawbacks - Posted by ed copp
Posted by ed copp on June 04, 2005 at 19:14:08:
What if?: the seller really does not own the house, has a ex wife that he forgot to mention who owns an interest, is shacked up with a “honey” that he is not married to because he is married to someone else who claims to have an interest in the property. Soppose that while you are the contract purchaser that he the owner, has an auto accident and kills someone while drunk, he then gets sued and a judgement places on all his properties. In such a case the deed in escrow would not help much, same for the performance mortgage. What if the seller turns out to be adicted to gambling and forgets to make house payments, right after taking out a home equity line of credit. There are a few possible drawbacks, and one of my favorites what if the seller decides to sell on contract for deed to more than one person at the same time.
Yes you would be entitled to the tax deductions.
Am I reading you right, Ed? - Posted by leslie - FL
Posted by leslie - FL on June 06, 2005 at 18:58:07:
That sounds like “Don’t be a wimp. Take it subject to, or don’t take it.” Correct? Thanks for writing, Ed. I am definitely rethinking my plan.