Purchase of Property, immediate owner finance to owner occupant

2 Replies

I am a full time buy and hold investor.  I'm changing it up with some cash i have.  I got under contract today a duplex in my area for $13,000.  A (3) bedroom and (1) Bedroom.  I will be paying cash for this purchase and the units can be rented immediately.  I want to owner finance this property to someone that will be living in the 3 Bedroom unit.  My question is this.  At closing, i will be putting the deed in my company's name.  i want to owner finance this right away.  How is this done in regards to short term capital gains, recording the deed? etc.  The property appraised for $41,000 and i will probably shoot for this number for a sales price with $3-5k down.

The one bedroom will rent for $600 with all utilities included and will make the owner occupants payment.  I'm just looking for anyone that has done this and can explain the proper steps they took.

Thanks in advance

Chris

Originally posted by @Christopher Neil :

I am a full time buy and hold investor.  I'm changing it up with some cash i have.  I got under contract today a duplex in my area for $13,000.  A (3) bedroom and (1) Bedroom.  I will be paying cash for this purchase and the units can be rented immediately.  I want to owner finance this property to someone that will be living in the 3 Bedroom unit.  My question is this.  At closing, i will be putting the deed in my company's name.  i want to owner finance this right away.  How is this done in regards to short term capital gains, recording the deed? etc.  The property appraised for $41,000 and i will probably shoot for this number for a sales price with $3-5k down.

The one bedroom will rent for $600 with all utilities included and will make the owner occupants payment.  I'm just looking for anyone that has done this and can explain the proper steps they took.

Thanks in advance

Chris

I'm assuming from your comment that actually your company is buying the property, not you. There are a couple of ways to do it. Your company could sell it to a buyer on a Lease Option (which is what I do) with a two year minimum on the option meaning they can't refinance for a minimum of two years. Your company gets their Option payment which is applied to the eventual purchase, but is forfeited is they don't exercise the option. It's non refundable. Or, your company can do the sale on a land contract and take a bit of a chance when they might want to refinance. 

Thanks for the reply @Mike M. Yes, my company will be purchasing.  I want to be out of land-lording for this property and just want to be the bank.  If i sale on a land contract is this possible?  And i want to try and avoid the short term capital gain buy not holding on to it for a year.

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