All Forum Posts by: Alejandra Macias

My husband and I came across an excellent opportunity to purchase a single-family house which would be our primary residence, of course, we will do some house hacking. We currently don't have the best credit to qualify for a $250,000 mortgage. My generous and loving mother offered to do a lease option for two years, and at the end of two years, she would sell us the house for $50,000 more as her profit. She and her husband have excellent credit together. She asked, how would they earn the $50,000 in two years if the house would not be entirely paid off. I was not sure how to answer that question. Would someone be so kind some shed some light on this, and inform me more about a lease-option? Thank you!

Details:

Purchase Price: $250,000

Downpayment: $10,000

@Michael Plaks Michael! What a surprise! I was actually looking to book an appointment with you in Houston but was going to wait until Monday to call since it is the weekend. Nonetheless, now that we are here, I live in Port Arthur TX, I may have confused the question with the Angel Investors, which we had a total of three investors with a promissory note of 7% interest and a deed of trust. However, in a sense they are irrelevant, the real question is more towards our partners who have a 50% interest in the company, who purchased the two properties with their money but paid themselves back when the Investors gave us funds for the project. Hopefully, that is more clear. From your last case, it seems to me like we simply borrowed money from them on pure trust without any real conditions, which would be likely the case that it is a non-taxable event. I appreciate your time and response!

@Simcha Davidman Thank you for your reply! No there was no legal written document by our partners other than the Purchase Agreement of both Properties. By your statement that whether it was a repayment of a loan or withdrawal of capital are non-taxable events might answer my question. In any case, I will also seek a professional for further questions. Thank you so much for your help!

Good afternoon Bigger Pockets members! We are a start-up partnership Real Estate Company and I have a question in regards to taxes as it would be our first year filing. Our partners (married-couple) put forward personal money of $16k to buy our first two rehab properties. A month later, we received $24k from Angel Investors, at that point our partners paid themselves back $15k but left $1k in the company. Was their contribution considered a loan or capital invested? How would this be handled when filing taxes? Thank you for your time!

@Mark Safrin That's great news! Thanks for the confirmation Benjamin! That was helpful.

Is it possible to finance a rehab entirely on OPM (Other People's Money)? I understand I would need skin in the game. Can my skin in the game be a personal loan and the rest from hard money or private money?