Best way to transfer a property between family members?

Question

What is the best way to transfer a property? My father owns a rental Free and Clear, He is okay with gifting it to me since i manage the rental and the deal with the entire process of keeping up the maintenance ect. Essentially i manage it and he is hands off. He is okay with that since our relationship is very close. My question is, Since i want to cash out Refi it and start the BRRRR process on another property what would be the best way to transfer the property to my name so that when i get the mortgage its in my name and not in his. We are in agreement and he is okay with doing this. Im looking for the best option without getting hit by uncle sams gift tax.

Any input helps!

Johny Tolman · Answer

@Ramiro Rodriguez

Recently just finished the process with this same situation.

We went with a quitclaim deed for “the true and actual consideration of $0” and got it notarized and recorded with the county all within a couple weeks.

Lessons learned:

I will never be able to take the depreciation tax benefit on the property as that is based on the purchase price. (According to my CPA) which is fine because I still have the property free and clear can’t complain.

Because I own the property free and clear I was able to find a bank to waive the traditional 6 month seasoning period that you usually have to wait in order to cash out refinance and do a full cash out refinance on the property and start the loan process within a week of owning it.

Good luck! And congrats