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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Just check out possibility of a pre-payment penalty.. Posted by Ward-CA- on May 31, 2003 at 8:17 PM In Reply to: personal residence....Ward..help :-) posted by zachary on May 31, 2003 at 7:51 PM : Ward I have a couple of questions for you but first the situation: : I am talking to an owner who is in foreclosure with his condo. : After running the #'s every which way I've decided that there is just not enough equity for my turn around and sell it. : Due to agents fees, a prepay that won't be up for a year holding costs etc..... : This is however a good candidate for taking as my own residence and walking into a situation with imediate equity. : here are my questions: : 1. Fist of all civil code 1695 does not pertain to buying it as my personal residence right? : 2. therefore I can give him less money than 50% or what the courts would find fair? : this easily explainable to him once I show him we'd be upside down if we tried to sell right away. : 3. this is the big one: I'd be taking this sub2, paying current and living there. who get s to write off the interest? : seem like I would as the owner and the person making the interest payments. I'm hoping you have some insight with this... : 4. heres another big one. I'm not INC'd yet so can I be the trustee and also be the beni? I think I can here in california and trust will still hold water? : Here's how I would do it with no money out of my pocket: : Take sub2 via lant trust. : Borrow 20K from friend/money person at 10% interest only for one year. : Use 20k to pay current and give him 4k moving money. : 20k form friend would be recorded as second. : pay 1st monthly, pay second monthly, pay hoa dues monthly. : refi in one year and pay off 1st and also 2nd to friend. : If this is possible I will walk into 25k-35k equity right now. : And pronbably anoth er 10% in a year (25k) : : #3 & #4 of my questions are big one to make this work....any insight? : thanks : Zachary =•=•=•=•=•=•=•=•=•=•=•= Zachary, #1. As you know, here in CA our Civil Code §1695 doesn’t apply to a party buying a foreclosure from an owner in default if the buyer intends to move into the property and occupy it as their residence. #2. Yes, buying the property for your own home won’t bring the “unconscionable advantage” prohibition of CC §1695 into play. #3. You’re right. IRS insists that the party entitled to take the interest deduction is the actual party that makes the payments, not the party who originally obtained the loan. #4. Yes, the title holding trust has no prohibition against the same person being the trustor, the trustee and the beneficiary. One thing to check out is the possibility of a stiff pre-payment penalty on the “subject to” first trust deed if the loan is less than 5 years old when you pay it off. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward I have a couple of questions for you but first the situation: : : I am talking to an owner who is in foreclosure with his condo. : : After running the #'s every which way I've decided that there is just not enough equity for my turn around and sell it. : : Due to agents fees, a prepay that won't be up for a year holding costs etc..... : : This is however a good candidate for taking as my own residence and walking into a situation with imediate equity. : : here are my questions: : : 1. Fist of all civil code 1695 does not pertain to buying it as my personal residence right? : : 2. therefore I can give him less money than 50% or what the courts would find fair? : : this easily explainable to him once I show him we'd be upside down if we tried to sell right away. : : 3. this is the big one: I'd be taking this sub2, paying current and living there. who get s to write off the interest? : : seem like I would as the owner and the person making the interest payments. I'm hoping you have some insight with this... : : 4. heres another big one. I'm not INC'd yet so can I be the trustee and also be the beni? I think I can here in california and trust will still hold water? : : Here's how I would do it with no money out of my pocket: : : Take sub2 via lant trust. : : Borrow 20K from friend/money person at 10% interest only for one year. : : Use 20k to pay current and give him 4k moving money. : : 20k form friend would be recorded as second. : : pay 1st monthly, pay second monthly, pay hoa dues monthly. : : refi in one year and pay off 1st and also 2nd to friend. : : If this is possible I will walk into 25k-35k equity right now. : : And pronbably anoth er 10% in a year (25k) : : : : #3 & #4 of my questions are big one to make this work....any insight? : : thanks : : Zachary : =•=•=•=•=•=•=•=•=•=•=•= : Zachary, : #1. As you know, here in CA our Civil Code §1695 doesn’t apply to a party buying a foreclosure from an owner in default if the buyer intends to move into the property and occupy it as their residence. : #2. Yes, buying the property for your own home won’t bring the “unconscionable advantage” prohibition of CC §1695 into play. : #3. You’re right. IRS insists that the party entitled to take the interest deduction is the actual party that makes the payments, not the party who originally obtained the loan. : #4. Yes, the title holding trust has no prohibition against the same person being the trustor, the trustee and the beneficiary. : : One thing to check out is the possibility of a stiff pre-payment penalty on the “subject to” first trust deed if the loan is less than 5 years old when you pay it off. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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