Is leasr option the best way or is it flipping?
Hello all.
I have a friend that is interested in purchasing a house. His wife has a judgement against her from when she was 18 over 7 years ago. Their credit together is not the best. If they can not get the loan, I am considering purchasing a property for them and then at a higher interest rate/price give it to them.
For example, if the house was 150,000 at 5.5% 30 year fixed, I am considering selling it to them at maybe 150-160,000 at lets say 6.5% 30 years or something.
However, I do not know what the best way to go about this situation. Should I hold the note for them? or should I do a lease option? I am not sure of the tax differences. If I held the note, I would have to pay capital gains tax right away correct? Is this true for a lease option as well, or do you pay gains tax when the mortgage has been repaid???
Any help would be great.
Thank you.
-John
Mr. Vodka
<IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by vodka on Date 05/30/2003 ]
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