Would this deal work?

[mataron]

My dad and I are in the process of acquiring a SFR to rent it for a positive cash flow. We bought it for $99,000 and the rent we could get is about $1200/month. I found the deal, and had to have my dad go in with me because it'd be impossible for me to get a loan. He will purchase the property with cash from a credit line with an adjustable interest rate. His name will be on the deed. Once the property is bought, he will look to finance it with a fixed interest rate. My question is this: Could he sell the house to me and I just assume the loan that he just got on it (like a sub-2)? Doing this, I will get the $8000 first time home buyer's tax credit. Doing a sub-2 requires the bank's approval, right? If they say, "No" then I'm screwed.

Ultimately, my goal is to acquire a rental property that will give me a good cash flow. I have $17,000 saved up, good credit, but I don't have an income. I want to take advantage of the $8000 tax credit. I would live in the house for one month before renting it out. Would this work? What should I do?

[AugustaREGroup]

home buyer's credit is for owner occupied properties... not investment properties

[mataron]

home buyer's credit is for owner occupied properties... not investment properties

I know that. What if it is my "intent" to live in it, but something comes up and I have to move?

[AugustaREGroup]

Move in for 14 days... I think that is the rule, but double check with a CPA. Personally, I would not to out smart the IRS/Gov. Money... Big repercussions. Find out the real rules, and follow them. Not worth the risk, IMO. If your dad is paying 'cash' why does he not just give you the money (transfer it to your acct).. you pay for the house cash, get the tax credit, refi (easier said than done on an investment property), and pay your dad back?

[mataron]

If your dad is paying 'cash' why does he not just give you the money (transfer it to your acct).. you pay for the house cash, get the tax credit, refi (easier said than done on an investment property), and pay your dad back?

That's exactly what I want to do. I wanted to ask if that was doable. I'll talk it over with a real estate professional. Thanks for your input.

[satxproperty]

I don't want to come off sounding like a jerk. But be careful about admitting to conspiring or "intending" to commit a fraud against the US Government on a public forum.

[Bigtoe]

AugustaREGroup[/LEFT];264466]Move in for 14 days... I think that is the rule, but double check with a CPA. Personally, I would not to out smart the IRS/Gov. Money... Big repercussions. Find out the real rules, and follow them. Not worth the risk, IMO. If your dad is paying 'cash' why does he not just give you the money (transfer it to your acct).. you pay for the house cash, get the tax credit,

refi

(easier said than done on an investment property), and pay your dad back?

Your dads money in your account has gift tax repercussions. Talk to a CPA.

If you don't live in the house for 3 years you have to pay the $8,000 back in full. You have to declare the rent as income and this will give away the fact that you have moved.

http://www.irs.gov/newsroom/article/...187935,00.html

[AugustaREGroup]

Like I said I do not know the rules in full - just my guess.

But the rent would be a give away... what if you have room mates that live with you?

[mataron]

I'll just have my dad buy it himself, and we'll work out a deal ourselves on the side. I don't want to get in trouble.

Hopefully, they'll extend this homebuyer tax credit to the time that I'll buy my primary residence.