Posted by John Merchant on September 08, 2004 at 11:10:47:
Although this is really not legal advice, I would sure recommend you look into doing a REC yourself, to an end buyer, so YOU’ll make all the profit.
Your businessman friend really isn’t needed if you’re in a position to sell on REC, giving a good buyer, with good down pmt., 2-3 years to come up with the balance, and that way, again, YOU are making the money on the deal, not the friend.
Probably lots of books and courses here, on just how to do REC deals and I’d suggest your doing a little bit of study before deciding how to do this deal.
On the issue of your taxes upon sale, do talk to your own tax preparer pro about that, as it depends on your exact situation…e.g. if you’ve lived in the house long enough, maybe NO tax on capital gains.
Posted by Donna on September 08, 2004 at 10:27:59:
I have a good friend who is a business owner and he is interested in doing, what I found out to be a Deed of Contract, with a my current home (which is on the market). He is offering me a sell price of $285K with $30K down and 8% interest on the remaining $255K for a minimum of 10 yrs. If he sells sooner, he owes me the interest up to the 10 yr point and 5% on the sales price of the home. I think this is a good deal for me since I have alot of equity in the home and only owe about $130K, plus I’ll be holding the deed. I ran these numbers and this is a monthly cash flow of about $1100 per month for me.
I have a possible buyer with the RE agent at $293K less 5% commission and my $130K mortgage, this will net me $148,400. Is it better to take this cash deal instead?
Also, will I have to pay taxes on the money I receive every month?