If you have a house for sale here is a very smart thing to do!

[Mountainman]

I have a house that was on the market for over a year. I am giving a buyer a 24 month lease option.

I am locking in the sales price now in a market where prices are declining.

They will pay me earnest money up front plus first and last month lease payments. Then they will pay lease payments at the current market rate plus an additional amount toward the down payment when they buy the house. If they don't exercise the option I keep all the money paid.

I will use the money they pay to pay the mortgage. Giving me extra money each month equal to my mortgage payment. I will put that money (approx half of my monthly take home)in a tax deferred plan and I am old enough that there will be no penalty when I withdrawal it in the future. I will earn interest on the deferred taxes so I can pay them when I withdrawal the money.

I will use the lease payments to live on plus the other half of my take home to live on. I will rent for the two years as housing prices continue to fall. At end of the two year period I will have my equity in the house plus the two years lease payments as a down payment on a new home.

I will pay no taxes on the lease income until I withdrawal the money yet I can deduct the interest on the mortgage dollar for dollar not an itemized deduction thus reducing my taxable income these next two years. I will also have depreciation deductions and fix up expenses to deduct.



Kool!

[LakeSamish706]

1. Good information, thanks for posting. n/t

[Rosa Luxemburg]

2. is this better than deed of contract (land contract)

[Mountainman]

3. I think so if the term of the lease option is less then the term of the land contract.

Plus only part of the money paid to you is going toward purchasing the house. The lease payment part is income to you.

[thunder rising]

4. All you have to do is find some moron that will pay more than the house will be worth in 2 yrs

And pay enough monthly to cover the mortgage + some deposit. This is a scam by the way. This is for wannabe slum lords.

[Ghost in the Machine]

5. Sounds worse than a subprime lender deal, doesn't it?

I like my deal better... I bought 12.5 acres with 4 mobile homes on it.. I live in one and rent the other 3 out.. the rents received covers the mortgage and my electric bill every month. I have my own well running all 4 places, so no water bills, either. All I have to worry about is buying groceries and fixing things if they break down...

[Mountainman]

8. I friend, we meet again!

You want to play the insult game again?

[Ghost in the Machine]

13. Didn't you get enough last time?

It was kind of fun, though, wasn't it?

But in actuality, hell, if you can find someone to take a deal like that, more power to ya, I guess..

There's a sucker born every minute.....

Excuse me now, while I put on my leather and go scare some elderly people with my loud pipes... :evilgrin:

[Mountainman]

15. Yeah kind of fun.

Hell anyone who rides or use to can't be all bad!

[Ghost in the Machine]

16. I'm sure if we ever met, we'd get along good... I like to fuck with people sometimes, in a

good natured way... Sometimes people think I'm angry when I post, but I'm sitting here laughing my ass off... because I like to push buttons just to see how far we can go...

PEACE, dude...

Ghost

[Mountainman]

17. And I have a pretty tough skin. later.

[Mountainman]

7. It is not a scam, they came to me and want to live on the property.

It's a 20 acre horse property in the mountains. They want it for them and their horses and they agreed to the terms. You can't scam someone when the facts are up front. Everything will be spelled out in writing and they can turn it down if they wish. I am not taking advantage of them.

[REACTIVATED IN CT]

6. What sort of tax deferred plan will you put your money in ?

401(k) ? IRA ? Annuity ? Inquiring minds want to know...

[Mountainman]

9. It is a plan that the county were I work has. I have to get more information about it.

We put what ever amount we want into the plan and the county puts some in also. Since I am over 60 there is no early withdrawal penalty.

[REACTIVATED IN CT]

12. Probably a 403(b) or maybe a 457

You can out quite a bit into them - up to $23,000 a year into the 403(b)

[RB TexLa]

10. I agree with you, very smart move. Take the money instead of letting it sit with a for sale sign

Very smart.

[dixiegrrrrl]

11. for 2008/09 and maybe 2010 there are special tax rules

zero taxes on capital gains? I think is what I read.

Worth checking up on, for those who can afford to cash in the 401 (k)s that are declining in value.

[scruffy]

14. That low rate only applies if you are in the 10% or 15% tax bracket

It also doesn't apply to cashing in your 401(k) - if you did that, the proceeds would be taxable at your ordinary income tax rate, plus a 10% penalty if you are under 59-1/2.