Is this even legal?

[Varma Adduri]

Hi, I am looking at buying a beaten up house for cash to fix it up. I have mortgage on 3 houses and HELOC on one for them. So getting a new conventional loan is doubtful. With the house I was referring to, let's say my purchase price + rehab = 190k and the ARV is 230k. Can I sell it to my wife (she has a different last name with no loans in her name) and get a loan for 230k so that I can take my money out + profit for my next deal. Is it legal to sell it to my wife just to get the loan? I can do BRRRR but I assume I have to show 9 months rent to get refinancing. Please advise

[Peter Vekselman]

@Varma Adduri the key to any kind of lending is FULL disclosure.  There are lenders out there who have programs that others do not have BUT if you misrepresent what you are doing and not disclosing everything you can get yourself in a lot of trouble.

Having said this if your goal is to create a profit by basically selling a property to either yourself (through your wife), or refinancing it then I would say you need to clearly understand what you are going to do with it once that is done.  Sure it's nice to have an extra 20-30k for another deal, but what about this new 230k property?  Can you cash flow it?  You are obviously going to be into for too much to sell it.

Think the whole deal through....