So I just got my first deal keyed up. Two Duplexes. Great Price, and will cash flow nicely. Wanted to get it as Owner Financing, but the seller insisted on article of agreement so that he can hold on to the title until all payments are made. Now What?
I have not got it under contract yet, I have a few pieces of due diligence left to do.
After getting the agreement signed, do I take some paperwork to get the title locked up in some kind of escrow so that I can ensure the seller doesn't do anything else with it?
How do taxes work for the next 5 years (the length of the agreement)? I already have rentals that I own and leverage depreciation and the like. But what is the best tax strategy to reduce my tax liabilities as I rent out these properties and they are still under the agreement?
Thanks in advance for any advice.
Property Taxes will depend on your agreement it is normal in the Mercer County area for the buyer to pay the taxes by everything is negotiable and taxes can be a big expense. If the taxes are $4,000 a year over 5 yrs that's a $20,000 difference. It also is a consideration for cashflow paying the $333 per month in taxes is $83 per property add Sewer, trash, etc..
The article of agreement should be fine just make sure you record it at the Court House and it contains all the relevant details so that if there are any misunderstandings you can fall back on that document. You never want to get to the end of a deal and have someone try to change the terms.
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