Posted by Tim on April 22, 2007 at 14:38:32:
If you had such a deal, according to your contract, you would have zero interest expense. As far as the IRS is concerned, you would actually have to impute an interest expense, and your basis in the property would have to be adjusted down. You can make the offer, but if it’s accepted, you should get a CPA who understands how this stuff works.
Ever offered 0% financing? - Posted by Jay(OR)
Posted by Jay(OR) on April 19, 2007 at 24:41:59:
When you find a desperate seller willing to owner carry have any of you ever made an offer to them with a 0% interest rate?
Did you ever get that offer accepted?
Re: Ever offered 0% financing? - Posted by Vickie
Posted by Vickie on May 04, 2007 at 13:11:51:
We bought an apartment complex with 0% interest for the first year. The first year is in a lease option agreement. This was approved thru our attorney. I don’t know if being a lease option makes the difference or not but it works for us.
Re: Ever offered 0% financing? - Posted by Brian (WA)
Posted by Brian (WA) on April 20, 2007 at 18:39:40:
Jay,
I have set up seconds held by the seller where the interest rate was 6% and the payments were deferred for the first year but the first position was an institutional loan. I’m not sure if there are any rules or regulations for private lenders such as a seller/owner if they were to act as first and only lien position. You might want to check with a real estate attorney.
Brian
Re: Ever offered 0% financing? - Posted by Josh-MD
Posted by Josh-MD on April 19, 2007 at 06:13:20:
The IRS has rules prohibiting loans that are very low interest. You may want to do some more research before you make an offer like that.