My fiance and I are trying to buy a foreclosure. It is a really hot deal that has 10 offers on it. In order
to get it we need cash. Can we have her parents buy it with cash, they take out a rehab loan and fix it up. Then we buy the house from them with a mortgage for the cost of the purchase and rehab? Will this have severely negative tax consequences if the house's fair market value is far above the price that we buy it back from them?
Please stop. There is no point to your useless answer.
So you should only ask common sense questions on this site then? I was hoping that maybe some type of professional or someone who has done this before could answer this question.
If the person answering falls into neither of these questions then please do not answer.
Yes, I know that there would be double the closing costs. Since this is technically a loan. Could we have our names put on the original title and then refinance the loan (taken out from her parents)? This would let us get the 8000 tax credit and avoid double taxation/closing costs. I am just not sure if this loan from her folks would be considered a gift from her parents according to the IRS.
Well the problems I see on this would be you are going to be paying closing costs twice on this property.
Sean Dawes
Long and Foster Real Estate Inc.
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