Creative financing

3 Replies

So I'm looking to finance my first deal,and I'm looking at investing with a family member through their financing. Since I'm a student I have low taxes,so I want to pass the tax benefits on to them, while retaning the cash flow. The solution I've come up with so far is have them purchase the property, and then lease option it to me. I'd love to hear any other ideas or feedback. Thanks

@Benjamin DeLeon   I see this is your first post so welcome to BP.

Another option is to set up an LLC where you are both members. LLCs are very flexible and you can divide up tax benefits, cash flow, and equity any way you choose. However you must follow appropriate guidelines to do so. You should have an accountant and lawyer familiar with the regulations advising you.

Rather than a lease-option you can also do a master lease where they own the property and lease it to you allowing you to sub lease it. No option to buy feature needed.

@Ned Carey thanks for the welcome and response. In regards to the LLC, can someone invest with retirement funds and still receive the tax benefits associated with the investment?

If they invest with their retirement funds any benefits go back to the retirement fund.  I am not sure how their retirement fund might benefit from  any tax advantages as it is already a tax advantaged account.  

Regardless they cannot use the tax benefits personally if the money comes from their retirement accounts. 

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here