What Should I Use? Lease Option Or Sub2
I have a deal that I just signed with sellers to L/O their home. Already have a tenant/buyer for the home and it will take a few weeks before the move out, move in process happens. So I was wondering, if there is really any benefit to me taking the property Sub2 versus Lease Option?
Any benefits at all that you can think of, please let me know.
Thanks,
Solutions Kid
[addsig]
with sub to you hold the deed. I put my deeds in my LLC.
If the seller has the deed and goes into judgment the house can be taken from you and your TB because niether of you own the house.
Don't forget to disclose that possablity to your TB , if you do loose the house the discloser document can help get you off the option hook wich will be VIOD
One benefit to having the deed is that you can claim the mortgage interest on your taxes. For example:
Principle and Interest = 1200/mo.
- Principle = 200
- Interest = 1000
If you are in the 30% tax bracket, then you can claim $1000/mo. interest on your taxes and get back $300/mo = $3,600 savings in taxes per year. That is quite a savings. Note that as you pay down the loan the income tax advantages get smaller, but there are still depreciation deductions and others.
One major benefit to L/O is that you can EVICT a default t/b and not have to foreclose on the property. Evictions are generally easier, cheaper, and faster than foreclosures.
iglooman