Promissory Note Property Transfer
Hello,
I have a unique situation going on and was seeking extra confirmation and ideas on the current deal I'm in.
Basically the property is transferred via deed, I sign a promissory note for a set amount, and record a deed of trust. This creates a formal lien, making it a financed purchase-even though there is no cash change in hands.
Once property is appraised, I apply for a cash out refinance. As the lender sees the lien, and agrees to pay it off at closing. Looking to schedule under delayed financing exception, from the lien being recorded, paying it off at closing, and the transaction mimics a cash purchase.
Concerning the property transfer would be filed as form 709 (life time gift exception) from the current owner to me.
As well as the note is receivable, essentially they are lending me money secured by the property. So when the note is paid off via refinance, They receive principle repayment which is not taxable income correct?
Just curious if anyone has any experience with similar transactions? And if there is other things to keep in mind, thanks.