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Author Topic: Cash at closing?  (Read 4044 times)

Offline sherrys office

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Cash at closing?
« on: January 24, 2004, 04:01:33 pm »
We found a buyer for a home at $55,000, $3000 of which is ours for flipping the deal. The buyer now wants to raise the price of the house to $65,000 so he can draw cash out at closing. The equity is there. And I guess it really has no effect  on us or the seller, right? Is this a good practice? Might I want to do something similar on a property I purchase?
I would appreciate any comments on this!!!

Offline tedjr

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Re:Cash at closing?
« Reply #1 on: January 24, 2004, 05:10:45 pm »
It is getting harder to pull this kind of deal off these days. Lenders are requiring more seasoning and other things today. There is a question of ethics too. You can get a remodel allowance on some deals if the property is not in horrible condition. As long as  there is value there I do not see a problem with this kind of deal. I too have done them where I got 10,000 at closing. The lender found out and wanted 6 payments up front at the closing. I still did good on the deal.

Good luck and thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas  78737
512-301-9171 home
512-587-6177 mobile

Ted P. Stokely Jr

San Antonio, Texas

Offline mythoughts

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Re:Cash at closing?
« Reply #2 on: January 24, 2004, 08:33:20 pm »
Well, it actually does come back to the seller when they pay taxes on their capital gain. They will have to include that cash back amount & pay taxes on it. To really make it work, you should offer to pay the tax they'll have on that anoubt, plus get the money after escrow so the lender doesn't find out. Have the check written to a third party.

Offline sherrys office

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Re:Cash at closing?
« Reply #3 on: January 28, 2004, 09:27:48 pm »
Thank you both, for your expertise!!!

 




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