real estate loan transfer or deed,below market value?
Friday, 3. September 2010
If Me And Another aSsociate agree to buy a property to let it build equity,i put the down payment,and he uses his credit & name,agree to transfer property,to me,ibuilds,now have my own loan,but prior to transfering or selling it ,he re-financed and used the equity, does he have to sell it for what he owes,?can i buy it from him below market value?
jpocia03 Says:
I think you might need to retype this question. But, I’ll try to answer it.
If you are placing the down payment on the home, then it needs to be sourced and season for at least 90 days. Meaning, your associate cannot just say that he has the money for the down payment, without it sitting within an account for 90 days. Otherwise, your associate and you will have to put together a forgiving gift of funds. Meaning, that technically you give him the money with no intention on him paying you back. (RISKY)
In addition, anytime a property is sold. It needs to be for a price that is owed on the property. If the loan is for 100,000 and then he refinances to get to some of the equity. It would be for the final loan amount, that he can sell the property for.
The home might appraise for 150,000, but he only owes 135,000. Yes this can be done.
Market value is totally different to the amount that is owed on the property. You will need to qualify for the loan, or you and your associate can enter into a land lease contract. The land lease contract will not help you build your credit through the bureaus however.
Hope this makes sense.