Posted by jeff on August 22, 2003 at 15:02:55:
Tell your dad to get a home equity line of credit, not a mortgage. Find your fixer upper. Pay cash from the line of credit. You just saved a lot of closing cost on your dads loan and your purchase. There are some good loans for rehab if the equity line does not cover the cost. If you live in the house 2 years and fix it up sell at market, bam no Capitol Gains tax. The deed needs to be in your name first dad second. If you want to sell faster than that you will get taxed. The equity line of credit interest is not front loaded like a mortgage so anything your dad pays above the interest takes away the balance, good deal. To fix your credit is a no brainer, pay off all of you debt. What ever it takes pay it back. If you have no credit, start with small items on credit used to fix the house and pay them back. Now I dont know where you live, but I dont think you can buy just a Lot for 5K. You should look for 3BR about 35% or more below market good money can be made off homes like that. No foundation problems or major roof joist problems. Everything else can be fixed. A good home inspector that you trust can give rough estimates on repair cost. Take your final sale price of the house in top shape and subtract your repair cost, sales commision, misc. cost, intrest on eline, and profit. That should be the most you pay to purchase the house. Good Luck