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Guest Guest_Gary-TX

What about down payment and rent credit?

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Guest Guest_Gary-TX

What kind of % down are the rest of you able to get to sell on L/O and not sit on it for a long time? Also, if the pack is $200, and I give $200 rent credit, can that be considered option consideration and not taxable till the option is exercised?

 

Gary-TX :-?

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:unsure: Gary

 

I would try and get at least 3-5% down at least. These people need to have something invested in the home if they are going to be quality T/b. Good Luck

 

Scott(pa)

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Hello, Gary. As for how much option consideration I'm receiving, it depends upon a number of factors. My general rule of thumb going into the deal with my tenant/buyer is I want an amount equivalent to between three and six months rent. My other rule is I never tell what I want. I have the tenant/buyer tell me what they have. Sometimes you will be pleasantly surprised. Other factors will be the value of the property, what is the "norm" in your area, local market conditions, etc.

Also, if the pack is $200, and I give $200 rent credit, can that be considered option consideration and not taxable till the option is exercised?
I'm not sure what you mean by "if the pack is $200....". If you can dumb that down for me :unsure: I'll give it another try.........

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MC,

 

I think he means cashflow. I have heard pack used on Sub to deals dealing with the difference in intrest rates to result in cashflow!

 

Gary-TX correct me if I am wrong

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I think he means cashflow.
I thought he meant cash flow, but they speak a different language in Texas :unsure: , so I wasn't sure.

My short answer is I don't think the cash flow can be lumped together with the option money as a way to defer your tax liability. You need to consult those wiser than me in these matters. I suggest Dave T in our Tax Strategies forum.

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Guest Guest

Thanks for all your answers. My thinking is straight, now!! And, yes, pack is cash flow.

 

Gary-TX

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I agree with Michael, that the T/B'r will usually tell me what he has to offer as option consideration up front. Sometimes they are stubborn, and you have to show them your hand. When they do, I usually tell them that rent price advertised is based upon the 5% down figure. So that they at least know a ballpark figure.

 

Many times I will concede to a lower option payment. At which time, just like in car financing or anything else, lower down payment = higher monthly payments. So at that time I will get better cashflow on a monthly basis.

 

Good luck, Pat

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Gary-TX,

 

Why don't you register and stick around we don't bite to hard..... :unsure:

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