Posted by Brent_IL on January 23, 2001 at 21:39:42:
Not okay. You are the one that is going to pay capital gains on $135,000 (210-75). In order for the seller not to pay taxes on the $105,000, he would have to borrow it from you using your loan proceeds. His unsecured loan could never be called. Skilled tax attorneys would pass on this approach. Too much collusion.
It might be hard to find a lender that would lend $165,000 (60+105) on a property that sold for $75,000 the week before. Even if this is a what-if scenario, taxes of $27,000 (135 x .20) will kill any profit. Forget it.
I want to do a creative finance deal where the seller sells the house for less than what they want. Example: Seller is asking 180,000. Decides to say they are selling for 15,000 over the cost of the unpaid mtg. , say 60,000 +15,000. for a total of 75,000. The assesed value is 200,000. Go for a mtg. of $75,000. money owed is paid and seller agrees to 15,000 cash and holds a note for additional $105,000 to be paid at a determined time. If can’t get 1st mtg for more than 75,000 then get a second mtg for additonal money, or
after selling the house for the aprox. 210, pay the seller the money for the note and profit aprox. 30,000. The seller doesn’t have to pay the capital gains on 180,000 but gets his 180,000 and I have no money down and sell at at profit. Is this legal? I know they have min. on auto sales, is there such a thing on home sales? I’m new to all of this.