Knowledge is the Map to Greater Wealth,
Real Estate is the Easiest Path.
Equity Share
This method can be used for many circumstances from hands off investing to helping a family member, friend or associate who is able to pay the payments but not able to come up with the Down payment. They are able to enter into home ownership much quicker than if they had to do it the traditional way. It is usually set up for a short period of time after which either, one party will buy out the other or the property is sold and each receive their share of the profit. Many times the occupant is able to purchase on their own afterwards. (generally 3 to 5 years)
Click Here for a Sample Transaction
Investor/Occupant:
Investor- Generally supplies the Down payment.
Occupant-Pays the closing cost and all monthly payments. They are also
responsible for all upkeep of the property. Many will put into the
agreement that large repair expenses (roof, structural etc.) will be
shared but otherwise the occupant will handle all repairs.
Each party will be on the Deed as 50% owners. The agreement has
provisions for exactly how each party is expected to perform and is
legally enforceable. The Investor has no land lording or further cash
flow responsibilities. (unless otherwise agreed upon and this usually
will result in a higher percentage for the investor)
The Occupant is able to use the property and generally as an owner will
take better care of the property than a tenant would.
Could this be the Best Part?
No Capital Gains Tax for Either Party
No Gimmick - Completely Verifiable
Of course, there are certain conditions to be met.
Occupant:
If you live in a primary residence for 2 out of the last 5 years, you may exclude up to $250,000 if single and $500,000 if married from your capital gains taxes. Want Proof?
Tax Bulletin IR-2002-142, Dec. 23, 2002
Look for 6th paragraph “For Joint Owners not married”
Investors:
Actually it is Tax Deferment under the 1031 Like
Kind
Exchange. You don't have to pay capital gains if you roll the realized
gain into another like kind property. Again there are prescribed
circumstances. This allows you to continue exponentially increasing
your wealth. Click on the link below to read more on these subjects.
IRS 544 Sale and other Disposition of Assets Like Kind Exchange
We love the IRS for making Real Estate a Better Investment.
Call Us to Discuss the Opportunities
954-566-3225
Or Email Us
This information is supplied by Great Condos, Inc. for educational purposes to introduce you to how this form of ownership may be used. All Deed and agreement documents will need to be written by an Attorney. It is also best to have your Tax Professional go over your specific Tax liabilities.