Options

[Anthoni S Bereziuk Jr]

I'm currently looking at a townhouse that could use some updating. The owner is flexible and has offered a lease option. Is it possible for me to option the property, fix it up with credit cards, then cash out at closing to pay myself back for the repairs? My long-term plan would be to hold it as rental (I like its long-term potential since it's near a hospital), so I would probably want to close on it in the name of my LLC.

[Anthoni S Bereziuk Jr]

Thank you for the input.  I don't think the numbers will work out anyway because I would only be able to finance 80% and that wouldn't pay me back for the work I'd be putting in.  But, let's say in the future I find a deal for a property below market value.  In round numbers, let's say I find a property that's worth $100k, but I sign an option to buy it for $80k.  Then, I put $20k into it and it re-appraises for $130k.  At that point, am I able to purchase it for $80k, but mortgage it for $100k and take out the $20k I put into it at closing in order to pay myself back?

Or, would it be possible for me to do something like that if I sign the option in my name, but then assign the contract to my LLC at a higher price and take out the difference with a double-closing (sort of like a wholesale deal from me to my LLC)?