All Forum Posts by: Will Russell

Hey Sal,

I'm interested in attending the Westchester meetup tomorrow. Has a time/location been confirmed yet?

Thanks,

Will

Yes, he's a closing attorney and I told him I definitely want title insurance. I'll let you know what happens! Thank you!

Current Status:

It seems there are many different and conflicting views and opinions on this deal.

I am working with an attorney and the seller is working with her own attorney.

I will leave this up to the attorneys to figure out. If the whole cash thing really is an issue, hopefully it will be as simple as the seller's attorney talking her into accepting a check that she can deposit in her bank account.

I will keep you posted on what happens.

You're missing my whole point. Do you count depreciating a rental property as tax fraud? No. But it's a tax loophole.

So what I was trying to do was figure out a way to keep her SSI legally. Is it legal for her to setup a trust? An IRA with that money and still keep her SSI? You haven't provided me with anything helpful.

Thanks Joe,

The seller is an 87 year old lady going into an adult home and I didn't want to see her get her assistance taken away from her.

Real estate investing is a strategy that helps investors with tax benefits. I didn't know if there was a legal strategy around not having her SSI get taken away which would allow me to go through with the deal without feeling like I just took the only income an elderly person has.

I'm just going to call off the deal and start searching for another property.

Thanks again everyone for your thoughts and concerns.

It seems people are getting angry at what I am doing. This is the first property I've ever purchased, I am a first time home buyer. I didn't even know what SSI stood for before I googled it. I am unaware of the fact that this is fraud. I thought there may be a way to do this legally (such as putting the money in an IRA or something else) and I was looking for answers that would help me - not put me down.

If this is fraud, then thank you for pointing this out and I will not go through with the deal.

Thank you very much everyone for the thoughtful and educating responses. I have decided that I will be paying the seller in cash as requested. Everything will be done above the table as far as I'm concerned. The HUD and other documents will all show the amount paid in cash. I will also make sure to have a notary present at the closing so the seller can sign off on receipt of cash. I'm doing what I need to do and after the closing is up to the seller what they do with the money.

Steve Smith had an interesting idea regarding the Roth IRA, I wonder if that idea would have worked. I'll have to look into that.

I hope the deal goes through. After over a year of searching for my first investment, I finally found it!

I'm 100% sure they are the owner, and I am completely comfortable purchasing the property from them. I just want to make sure I am not going to have any issues with the IRS. It seems that the seller will run into roadblocks.

Paying a monthly amount to the seller is a great idea and may work.

Any other creative ideas anyone?

Yes, it is complicated.

I guess what I'm trying to say is that if I give the seller cash and the seller has hurdles beyond the closing such as their SSN showing up on transfer documents, then that becomes their issues...not mine.

My cash would have a paper trail of being withdrawn from the bank. I can do $9,000 withdrawals each day to avoid the IRS form, yet I am still above the table since the cash will appear on the closing docs and it was obtained legitimately.

I am going to try to talk the seller out of cash, but if they insist and wont do the deal any other way, and they understand they are on their own in terms of them getting flagged, and I have fully reported the cash - have I mitigated my risk?

The seller receives supplemental security insurance and can only have a maximum of $1,500 in their bank account.

Without me paying in cash, the seller may not want to go through with the deal because they will lose their SSI.

I suggested that the seller setup a trust or have the money deposited into a friend or family member's account and this might mitigate this issue - however the seller has no close family and no friends that could be trusted with the money.

Any other ideas anyone? I really want to move forward with this deal, but this is a roadblock that I am not sure how to get around.