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Also - water heaters are not upgrades. They typically come with the house. They should have left the sinks and the toilet as well. My thinking is that anyone who would take the water heater and the toilet was possibly angry and I would check for possible further damage.
The piping is set up for an energy efficient tank-less water heater. The 1 toilet that was left is a $350 Toto toilet. I really want to see the sink because they left a $350 toilet, but took the sink. So it just seems the owners took everything they bought with the bank's money.
Looking at the house and the property tax records, it seems the previous owner took HELOCs to remodel the entire house. But they busted shortly after that. The home is still gorgeous.
I believe you will run afoul of the IRS's imputed interest rules. Here is a partial explanation.
http://www.ehow.com/about_5097624_irs-imputed-interest-rules.html
Run this past a very good tax attorney or accountant first.
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We just wrote a $425k cash offer on a home. The property requires all cash due to it missing necessities; the previous owner gutted it prior to foreclosure.
I've got $280k to my name and all my aunts and uncles have all chipped in to loan me the other $145k. Once I purchase the property, I will replace all the necessities and make it habitable. I will then take out a $200k loan against the property to repay my aunts and uncles, and have a bit of pocket cash.
Does anyone know about the tax consequences of the $145k cash loan? What's the best approach for this scenario to avoid/minimize taxes? I expect to repay the full amount with a cash-out refinance within 3 months.
#housing