Creative Financing - IS IT LEGIT ??? - Posted by s

Real Estate Investing Real Estate Financing
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Posted by John Corey on May 16, 2006 at 04:34:00:

S,

  1. If no lender will approve the deal with that much cash back that should tell you something. If you work with the buyer to hide the payment (likely making the payment outside of escrow) then it would be actively participating in fraud. It might be found that you aided in the fraud and are therefore knowingly participating in a criminal act. Criminal act -> possible jail time. A federal crime in most cases.

  2. There is nothing illegal about a large cash back. Creative financing can involve cash back or other ways to make a deal work where the financing is not conventional.

What is illegal is when someone has to cheat, steal, deceive or otherwise cross the line to make the deal work. In your example the ‘crime’ has nothing to do with the cash. The crime is that the lender has to be lied to and material facts hidden for the loan to be approved.

John Corey

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Creative Financing - IS IT LEGIT ??? - Posted by s

Posted by s on May 15, 2006 at 22:11:43:

Hello,
I’m selling a home in Florida for well below market price. I found a buyer who wants to buy at my appraised price. However, he wants cashback from my original listing price and the appraised price (equaling almost $80K ). Other than documenting the HUD, can this deal work if I were to give him a check and get something in writing???
I want to make sure I won’t be liable for paying any taxes on the captial gains. (no lender will approve that much amt on the HUD)

Thanks…any help would be greatly appreciated.