Bought a house

[rennigade]

Are there any tax consequences from them giving you 0% financing? I seem to recall something about personal loans needing to be at market rates or else it can trigger an issue but I'm just vaguely remembering that.

I spoke to my friend/CPA about this. He went into pretty great detail. Basically he wasnt concerned of any consequences or issues with the purchase price and the 0% interest. Im not even going to attempt to explain what he said cause ill just butcher it up.

Apparently if you sell a house for too cheap there can also be issues...but its a grey area considering what the house is worth and what you can sell it for are two completely different things. Its very odd.

[james.hendrickson]

Last week we purchased my in laws home for $220k. We met with the lawyer and had all the proper paperwork signed. We didnt have to take out a loan since we're paying them directly. We did put $100k down though (bye bye savings) and will start making monthly payments to them beginning of 2018. 15 years at $670/month...the best part is 0% interest!

They also purchased a new home and will be moving into that spring of next year. Once they move out of the house we bought...we'll start doing some renovations. We'll probably tackle the easy stuff like gutting/replacing bathrooms, bedrooms. For the kitchen we'll probably just remove wallpaper, paint walls, paint cabinets...possibly replace tile. Our plan is to hopefully move in by end of 2017 depending on our jobs and if wife can work primarily remote.

The only thing that will kinda suck is having to eat the property taxes and home insurance...which equates to around $6k. Plus utilities, plus internet (so we can set up ip cameras/security system.) Other than that it was an easy process which is should have been since we dealt with family. Not having to go to a bank for a loan or dealing with a realtor made things a breeze.

Also...glad to see the site is mostly rid of spam and old threads.

Rennigade - good job on the house purchase. My philosophy is that you should own as much good quality real estate as you can get your hands on. Its great from a wealth building and financial security perspective.

[GoodSteward]

I spoke to my friend/CPA about this. He went into pretty great detail. Basically he wasnt concerned of any consequences or issues with the purchase price and the 0% interest. Im not even going to attempt to explain what he said cause ill just butcher it up.

Apparently if you sell a house for too cheap there can also be issues...but its a grey area considering what the house is worth and what you can sell it for are two completely different things. Its very odd.

Nothing like endless laws and rules to help disorganize and overcomplicate our simple lives.

[scfr]

Congratulations on the home purchase! I'm a very impressed that you consider gutting/replacing bathrooms to be "easy stuff."

[rennigade]

Congratulations on the home purchase! I'm a very impressed that you consider gutting/replacing bathrooms to be "easy stuff."

Thanks. I should clarify...its easy for my father to do. Whenever I help him with any house project im just the dummy who carries stuff around, cuts stuff, hammers, etc etc...basically if it doesnt take finesse im useful when it comes to handy work. Not to mention he's really fast so its not something that ever drags out. Guess after 30 years if you havent mastered it yet you probably never will.

[DaveInPgh]

Thanks. I should clarify...its easy for my father to do. Whenever I help him with any house project im just the dummy who carries stuff around, cuts stuff, hammers, etc etc...basically if it doesnt take finesse im useful when it comes to handy work. Not to mention he's really fast so its not something that ever drags out. Guess after 30 years if you havent mastered it yet you probably never will.

I refer to that as unskilled labor and offer it to friends anytime they have a project going on. Just recently had a friend provide his skills for a home project of mine. I did a bunch of the grunt work while he did the things I would otherwise screw up.