Some advice needed - Posted by jarred

Real Estate Investing
1

Posted by John Corey on March 13, 2006 at 05:05:00:

Jared,

  1. Speak with a tax attorney as there are some issues related to gifts, taxes and impact on her estate. Better to address the issues up front than pay more taxes later.

  2. Consider getting your own LOC rather than just making the payments on her LOC. I know you said you wanted to avoid getting a loan. The issue is you are talking about doing a subject-to deal and the lender might choose to call the loan. Most of the time they do not. Just find out what it would take for you to get a loan so you know before you are forced to do so. Or expect that you might have to move the property back into her name if the DOS is called.

Assuming that she really knows what she is doing then there should be few real issues. I do repeat that you need to get full details on the tax impact and how this will effect her estate. Your mother can not give you such a large amount in 1 year without there being a tax impact. Spread over time or structured differently and there will be no taxes owed.

John Corey

2

Some advice needed - Posted by jarred

Posted by jarred on March 12, 2006 at 18:10:23:

My mother in law is selling her 2 family house to me. It is worth about $450K and she only wants her line of credit paid off which is 36K and her credit card bill which is 8K. We have discussed having me take over her line of credit payments and I will give her some cash as well. Can I have the line transferred to me and the deed and I will then use that line to pay off her card and give her some extra cash or does that line have to be paid off first? I want to avoid getting a mortgage or loan for this and would like to just take over the small payments she has on the line and make this as simple as possible. Because of alot of personal issues, she needs and wants to do this. I will keep the house as a rental property going forward and take care of her at my home.

Any advice on this is appreciated.