The Rewards Of Holding A Note On Your Properties
Banks are being more strict than ever with whom they lend money to, so if you are a home seller you really need to consider becoming the bank, and loaning our your own equity to a prospective buyer. Why, you ask?
Let us just say, for this example, you have sold a property that you have fifty thousands dollars in equity in. Selling the property and accepting that one lump sum may expose you to certain taxes and lower your profit potential from it. There are more taxes than the usual income tax and state taxes that can take your real estate profits, such as capital gains tax for one.
Taxes, overall limit the amount of motivation many potential business people have, so it makes you wonder why the government institutes such burdensome policies and regulations. It may seem counter intuitive, but loaning the buyer your profits from the sale may be the best way to limit your tax liability and generate some income doing so. Now, I do not recommend loaning the money back unless you have primary lien position, otherwise you can lose every cent you have in the deal in the event of a foreclosure by the primary lien holder.
By loaning on your own property, you have a very proactive opportunity in dealing with the home owners and can cut off any foreclosure by dealing directly with the borrower. If the buyer does get behind on payments, you simply go to them personally and express some empathy for them, then offer to take the property back through a deed in lieu of foreclosure. This keeps you from having to go through the expense of a foreclosure, and it keeps one off of the record of the homeowner as well. Even when you take it back, you can rent it to them or kick them out and rent to someone else, until you find another buyer for it. After you take control of it again, your options are wide open.
By helping your next buyer on your home, you can get another residual interest check and be in the same position you were in before you had to take the property back in the first place. By doing things this way you can make some easy money from the homeowner, but you will probably be refinanced out eventually. - 23218
Let us just say, for this example, you have sold a property that you have fifty thousands dollars in equity in. Selling the property and accepting that one lump sum may expose you to certain taxes and lower your profit potential from it. There are more taxes than the usual income tax and state taxes that can take your real estate profits, such as capital gains tax for one.
Taxes, overall limit the amount of motivation many potential business people have, so it makes you wonder why the government institutes such burdensome policies and regulations. It may seem counter intuitive, but loaning the buyer your profits from the sale may be the best way to limit your tax liability and generate some income doing so. Now, I do not recommend loaning the money back unless you have primary lien position, otherwise you can lose every cent you have in the deal in the event of a foreclosure by the primary lien holder.
By loaning on your own property, you have a very proactive opportunity in dealing with the home owners and can cut off any foreclosure by dealing directly with the borrower. If the buyer does get behind on payments, you simply go to them personally and express some empathy for them, then offer to take the property back through a deed in lieu of foreclosure. This keeps you from having to go through the expense of a foreclosure, and it keeps one off of the record of the homeowner as well. Even when you take it back, you can rent it to them or kick them out and rent to someone else, until you find another buyer for it. After you take control of it again, your options are wide open.
By helping your next buyer on your home, you can get another residual interest check and be in the same position you were in before you had to take the property back in the first place. By doing things this way you can make some easy money from the homeowner, but you will probably be refinanced out eventually. - 23218
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posted by X - Men @ 4:45 AM
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