Posted by Ed Garcia on December 06, 1999 at 09:50:49:
Yes
Is Fix-up Money Legit in Aggreements? - Posted by Tony James
Posted by Tony James on December 05, 1999 at 08:56:04:
I want to offer $50,000 for this house that appraised for $50,000. They only want $40,000 for it. I want to put $10,000 down (20%), and finance the $40,000. In the aggreement I want the seller to pay $10,000 on fix-up.
Is this aggreement legit?
Is the seller taxed on the $10,000 fix-up money given to me, or is it deductable?
down money put in rehab escrow - Posted by RRSmith
Posted by RRSmith on December 05, 1999 at 19:13:36:
This is question that is somewhat like the one above. If the amount the bank requires as down payment is held in escrow to be used as contractor and materials costs out, would they (most banks) go for that? It seems like they should since they will get a after fix-up apprasial and a better loan to value, as long as you are not fixing up past the average value for the area (block).
Re: Is Fix-up Money Legit in Aggreements? - Posted by Ed Garcia
Posted by Ed Garcia on December 05, 1999 at 14:09:42:
Tony:
A rose is a rose .by any name.
If your trying to get creative, to create a down payment of 20% in structuring your
deal? There are other ways of doing it.
If you are trying to do as you say? Then yes it can be done.
In order for it to work it must be verified. The buyer would have to show the fix
up cost, and the disbursements to the contractor doing the work. If you were to do
the work yourself, then you would have to verify where your down payment is coming
from, and show you put it into the deal. Each lender may verify this in a different way,
and on a case by case basis.
Yes, if it’s legit, the seller gets credit for cost of the improvements.
Ed Garcia
so is it deductable for the seller? - Posted by Tony James
Posted by Tony James on December 05, 1999 at 20:26:25:
When you say they get cerdit, do you mean it is deductable?