How do I sell my rehab house? - Posted by batpro99

Posted by Brent_IL on August 19, 2003 at 19:48:31:

I don’t know, I’d forget about the L/O for the reasons that were given by Ron. I’d lease it and hold out for capital gains. You have $8,000 in the LOC if you need it.

I guess I’m spoiled because I live in an area with millions of people. The suburbs run into each other in a fifty-mile diameter. Well, not exactly, or some would be in the lake. When we run a rent-to-own type of advertisement, we have to run the callers through a message tape first to try and discourage the initial fifty who want to rent a house quickly, because they are being evicted from their apartments.

How do I sell my rehab house? - Posted by batpro99

Posted by batpro99 on August 19, 2003 at 07:26:24:

I need help in what is the best way to sell my rehab house?

I bought a 2 bedroom home in April for $23,000 in a small city.

Rehab cost: $6,000
Total invested $29,000
New appraisal came in at $47,000

I listed the house in early July with a local realtor in the MLS system.

Only one person has looked at the house thus far.

What is a good way to sell the house? I have someone the called and wants to buy the house rent to own.

Any suggestions???

I am new at this.

Do you want cash or income? - NTXT - Posted by Brent_IL

Posted by Brent_IL on August 19, 2003 at 08:12:13:

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Re: How do I sell my rehab house? - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on August 19, 2003 at 08:11:08:

Bat Pro 99-------------------------

There have been many books written on this topic. I’d suggest you get down to the local public library and see if they don’t have a couple you can read. If not, they can order them through interlibrary loan.

Or go to a major bookstore, if there is one where you live. Either new or used, it does not matter, there are always these types of books for sale.

Or go on the online booksellers such as amazon dot com and order a couple of the books.

I am not enthusiastic about you selling the house on a lease with option, although other people may disagree. Two main reasons: you don’t get a payday for a long time and you are taking a risk that the property will decline in value, the optionee/leasee with back out and then you have to start over where you are now. Of course, should the property go up in value, your optionee/leasee is likely to exercise the option. So, heads you lose, tails the other party wins. There is also some issue with taxation and lease-options. Jack Reed makes the argument that a lease-option is really structured like a contract for deed (land contract, contract of sale in different states) and thus, the IRS might so recharacterize it. If that were so, the beginning point for your lease-option is considered the sale date for the property. You also cannot treat the sale as an installment sale. You are required to pay the ordinary income tax on all of the gain in the tax year of the sale. However, you would not have gotten all of the sale price in the year. Thus, you might well have to pay part of the tax bill with other money you have–or might not have? Even Jack admits that the likelihood of this happening is low. However, it is a possibility. And with all the lease-option deals going down, one has to worry about the IRS picking up on it and aggressively going after the taxes and penalties, I would think.

Good Investing************Ron Starr***************

Re: Do you want cash or income? - NTXT - Posted by batpro99

Posted by batpro99 on August 19, 2003 at 09:40:30:

I would prefer cash, but if it takes a year to get it I can deal with that as long as I can get some monthly income. I have a line a credit equity loan with floating rate (the rate now is 6 7/8)loan against the house for $37,000.