Profile picture for Ellanah

Advantages to Landlord to sell to me the renter

I've been renting a place for 16 years. I have a real good relationship with my landlord. I want to offer to buy the home. Funny I've already basically bought it twice for him living here so long. Anyway I want to offer below market lets say 350K Market is 411k. I want to give him 50K cash clean and clear and go on paper for mortgage of 300K. What are the advantages of him selling to his tenant? Are there any tax disadvantages to him for selling a rental property compared to his homestead? Would he have to pay income tax on this sale?
  • September 23 2013 - Scotts Valley
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Answers (1)

Profile picture for Outer Banks N C
There would be a capital gain tax to the buyer for the difference in what the sale price is vs the cost. He could be making a nice positive cash flow and getting tax breaks with you there, so his incentive might not be what you want it to be. There could be transfer taxes and there will be some closing costs albeit not much on his side.

I don't get the cash for $50k part. He will get the difference in the mortgage vs the sale price in cash at closing and if he owned it for 16 years he likely has little mortgage left.

  • September 23 2013
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