Lawrence, KS · Member since 2017 · 6 posts · 3 votes
I just bought a house at a sheriff's sale, but the owner has a history of foreclosures and coming up with the money during the redemption period. She told me she already has a list of people wanting to buy the redemption rights. She has 11 different properties in a prime area of a college town that are all in need of repair. She told me she would like to sell some of the properties, but needs to avoid paying capital gains.
Am asking for some advice:
1. Can I and do I also offer to buy her redemption rights? If so, how much over the the amount the bank was owed?
2. Is owner-financing an option to avoid the capital gains taxes?
3. Do I need to get title and property insurance during the redemption period?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
The cleanest thing is to buy her redemption rights.....that price is whatever makes sense to you, considering whatever equity you have at your auction price, and what someone else might pay, knowing they have to pay you off, plus interest I presume.
She simply can’t avoid cap gain taxes on a sale unless she 1031’s, just a fact of life. She could Defer them with seller financing, but ends up probably paying the same.
Remember, you can’t reason with a delusional person.