Posted by tang-0-rang on March 11, 2002 at 23:56:02:
I think he is trying to convey the fact that the, not-for-profit organization would sell the property to his personal portfolio for $1, and that $1 being paid to him for salary as officer of that organization, thus zero profit. Sounds shady, but who knows, mabe it can be done since all actual profits would be made at the sale, or income from a rental,and again it would be in his personal real estate portfolio which is seperate from the organization. anyway thats my take.
Todd Williamson (CO)
I have an idea, but I don’t know if it is legal so I figured I would ask here.
What if you created a not for profit organization. Then you approached sellers and gave them the option of recieving full market value by donating there property to the not for profit organization and thereby recieving a tax reduction of that amount. Then you have the non profit sell you the house for $1. The $1 earned by the not for profit goes towards your salary as director of the non profit. Then you sell the house for whatever price you want.
Is this illegal because it definitely seems that way. And even if it wasn’t illegal it seems very unethical, but I had to ask anyway.
Andrew You have a very creative mind. Why don’t you just learn about making money in real estate the legal way without trying to steal someone’s property. I bet you could make a lot of money and not have to worry about the tax man or looking over your shoulder every day. You probably would sleep better too!!
Yes it is illegal but not by much. There are plenty of legitimate charities that give 10% of the money to the victims and put the other 90% in their pockets.
Last night there was a piece on 60 minutes about the American Red Cross using disaster victims in their ads, then keeping most of the money and giving little or none to the victims who the contributors thought they were helping. They claimed they were spending the money on other less popular disasters.
If you wanted to set up a charitable organization you could. Then you could do pretty much what you describe, although it would be risky to sell the property to yourself too cheap. Why not have the charity sell it to the final buyer, give 10% to the victims and keep the rest? Even easier, why not collect cash donations and forget about the real estate?
Good question and no I don’t think of these ideas because I want to steal money. I just see finding property for under market value as incredibly difficult. Also, I have no funds to start. There are many no money down strategies, but ideas such as this one pop in my head so why not throw them out there.