All Forum Posts by: Philip McDonnell

I will do some research on irs.gov to make sure of the new laws on Capital Gains but I am pretty sure there would be no Captal Gains because it is not a sale and you are refinancing. The sale amount could be 0 on public record since they are clear on the home with no liens.

I think they could gift the house to you for tax purposes. That may even be a benefit to them at tax time.

This is pretty shady though... Not something I would do myself... But, this board is for informational purpose...

I couldn't find anything on irs.gov about this kind of transaction. I am not sure how gifting the house would work as there is still gift tax. Why do you say it is shady? I was hoping to come to you for a refi :)

What about another senerio, I get added to the deed now I own the house correct? My parents still own the house as well, couldn't we just refi and get the money they want and then I just pay the monthly note on the refi loan? At the end of the year I can still claim the interest on my taxes as I own the house no? I could leave my parents on the deed so they still own the house as well. Is there any problem with this? The only time I see a problem is when I go to sell the house and they are still on the deed.

Thoughts?

Thanks,
Phil

0 Votes

Originally posted by "all cash":

Since you've been renting it for many years there will be capital gains and recapture of depreciation for your parents. Why not structure it so you just PURCHASE it with them doing SELLER FINANCING?

Is this true even if I do a deed transfer? What about if I added myself to the deed and then refi'd so my parents could take the money they want and then after that drop my parents off the deed? Then the house would be mine, I would pay the loan and they would have their money.

Originally posted by "all cash":

Unless they need a chunk of cash it could be the best way financially for them. It would spread their gain over the term of the loan and give them a monthly cash flow.

They do want a chunk of cash now so spreading it out is not really an option.

Thanks for all your great help here...

Regards,
Phil

0 Votes

Originally posted by "Greg_Home123":

What state is the property in?

New york

Originally posted by "Greg_Home123":

They could deed the home to you and you could refinance in 0-12 months depending on your credit. One thing that a lender looks for on homes you pay rent on and want to buy is if you can prove your rent history. Not all the time but depends on credit and income. They like to see 12 months cancelled checks.

Ok so they give me ownership with the deed and then refi for the value I need to give them, however what do I do then just hand them $200,000.00 or whatever the value is?

Originally posted by "Greg_Home123":

Ideally wait 12 months and pay with checks for 12 months then refi to give them the cash. It is going to be resticted on some loans though. The amount of cash out you can get. Your current housing expense versus your new housing expense.

So you are saying to get the deed to me and then still pay rent but with checks for a year or so?

Originally posted by "Greg_Home123":

Why are you trying to avoid the conventional sale? So you can get a lower rate using appraised value? No money out of pocket?

Well I am thinking of several reasons which may or may not be correct. First no money out of pocket would be great! Also the value of the house to them gives them alot of capital gains and I thought perhaps if we did a transfer there would be capital gains or not as much?

Originally posted by "Greg_Home123":

It makes perfect sense though... Family deed transfer can be done too where your parents can gift you equity and set the price at fulll appraised value then gift you the spread between appraised value and cash they want. That makes the sale amount at full market value.

This is confusing to me.. I am sure there is a simple way that we can do this without all the usual lawyers/brokers/etc.

This would be my best scenerio if it is possible???

I would like to get the house with little or no money out of pocket and then turn around and refi to get some cash back to pay bills and fix up the place. It would be great if I could save them some cap gains in the process.

Thanks for your response....

Phil

0 Votes

Hello All,

I am new to these forums so I hope that I posted in the correct place and also hope I don't sound like a total newbie even though I am :)

Anyway here goes my story:

I am currently living in a house that my parents own outright, I have been paying rent to live here for many years and now I would like to buy the house from them. We have agreed on the selling price.

My question to you is do you have any advice on how we can proceed with this transaction smoothly and with minimal involvement from the outside world (brokers, loan brokers, etc). Also is there anyway that we can do this deal without a conventional sale? Meaning can we transfer deed and then I could refinance and pay them that way? The house will appraise for much more than my purchase price.

Any info you have or questions please let me know.

Regards,
Phil

0 Votes

All Forum Posts by: Philip McDonnell

Philip McDonnell has started 1 posts and replied 4 times.

Post: Buying house from relative

Post: Buying house from relative

Post: Buying house from relative

Post: Buying house from relative