Interest On Subject-To
I purchased a house last year Subject-To the financing in place. I have made the payments for most of the 2005 year. Can I write the interest off on my taxes since I paid it? Or does the previous owner get the write-off? I have wondered this ever since I took over the mortgage.
Also, I am selling the property as well. What is the best way to get the payoff? When the bank gets paid off, will the balance of the escrow be payable to me or the previous owner? If it goes to the previous owner, is there a way to put the escrow amount towards the payoff?
Any help in this area would be greatly appreciated.
With dealer status you will use all expenses of the property as your basis...
When you purchased you would have received their power of attorney..
Escrow balance should have been dealt with at the time of purchase...
TO receive a beneficiary statement you should go through escrow or just call yourself and have them send it to you as long as you have the borrowers authorization which is also something you should have gotten at purchase...
Good Luck
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Nick Meyers,
Glad to meet you.
To answer your post I would need to see the Subject To deal you want advice on.
Unfortunate as it seems what you posted does not qualify as a Subject To deal, unless you want one so bad you would consider calling what you posted one, but then I doubt that would be the case.
John $Cash$ Locke
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Nick....
Lets assume that you’re resale number could be 147,000 which is only 23000.00 more than your basis...
Figuring a minimum 2% cost to buy (2480.00), 3 months to hold (3,000.00) and 7.5% minimum to sell (11025.00) that will total 16505.00...
The balance to you is 6495.00 if everything is perfect...
If your low number happens to be correct you’re screwed...
There fore this isn’t a flip transaction
Your exist strategy for leasing is not an option. As you have too much invested in the house and the consideration isn’t enough to pay for your time or cover the possibility that your tenant will perform..
Therefore not a L/O
If you’re sub 2 buying and wrapping I would not consider a transaction I couldn’t see a minimum of 10k plus my 3 months expense reserve difference between the amount I put out and what the down payment would be from a buyer, and a monthly difference of 175 in payments and a back end of another 10k minimum…
Why get involved with a transaction if you cannot make 25k in 24 months as guaranteed as possible?
Rule of thumb for me is always see 52000 equity and 75% value.....
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John and IBuy thanks so much for taking a look. I am really trying to grasp and establish a general framework for looking at a deal and quickly be able to assertain whether or not there is something on the table to make me want to move forward with a specific deal. I am very enthusiastic and really enjoy the forum. I have been on here as a looker for about a year and 1/2 and am now really starting to dig deeper into several investment concepts.
I went and looked at it today and contrary to what my contact had stated needs about 3k in repairs-so it was not in "ready to go" condition as stated.
Thanks again!!
Nick Meyers
Tony- Totally understandable. When I added up the pluses and minuses prior to posting I was definately not feeling easy about no equity in the deal and 11k out of pocket for starters and trying to see a subject to opportunity. I guess the only plus I saw was the reassignment factor and hoped to see more than the other stated costs that were pointed out at were not figured.
Thanks everyone, I am truely thankful for the analysis!
Nick Meyers
John he really needs to buy your course doesnt he?
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I think I will be headed that way shortly
Michael,
When I see posts like the one above, it makes me almost want to bring my course back on the market to get these folks on the right track in Subject To investing.
However, you noticed I said almost.
John $Cash$ Locke
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Well John...
You have a good point...It is too bad that you desided to hang it up...
I have done some research and the results tell me that the investors out here, especially with the market changing, need guidance...
And what is better they want the guidance...
I guess with your retirement your knowledge will be lost forever...It is too bad for a lot of them..
I am curious.....what is it that you believe sets yourself apart from the many course writers and balloon blowers out there? Besides the 500 deals
Maybe that would be better left up to your past students to answer...
Not wanting to piss you off but....you really think being away as long as you have that you can create a following again...
I know.... not the right forum for these personal questions....
Wish you well...
Maybe I should start the
"Bring Locke out of retirement fan club".
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Michael,
I am currently doing Subject To deals where others tell me they are tough to do,
If you saw the amount of e-mails I receive every day from people asking for help your question would be answered rather quickly.
John $Cash$ Locke
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