Can I buy a foreclosure and repair the house with a Home Equity Loan?

- R
- Rzrback_99
  
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posted
17 years ago

Mon, Jan 15, 2007 7:26 AM

My partner and I have been looking into getting a foreclosure for some time now. Since we have little money and since we are using other people's money, we were wondering if we were to buy a foreclosure and re-instate the loan under our names, could we then take out a Home Equity Loan and use the money to fix up the house to sell? Is there a better way to go about doing this? Moderator: This posting is not about taxes. Can someone tell the OP which newsgroup is appropriate for his question?

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- S
- Stuart A. Bronstein
  
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posted
17 years ago

Tue, Jan 16, 2007 7:56 AM

I don't know the appropriate group. But I have two comments:

Talk to a loan broker - they can give you the answer to your question.
Unless you have enough money to lose your investment if it goes bad (especially if the former owner has not vacated the premises), this is not a good idea.

Stu

- B
- Bill Brown
  
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posted
17 years ago

Tue, Jan 16, 2007 7:56 AM

Yes, you can use loan proceeds for anything you want to - subject to any contractual limitations you agree to with the lender. Whether, when and where the interest is deductible depends upon what house is security for the loan, your personal residence or the property you're buying.

I would have to know a lot more than I want to about your personal finances to answer that question. I suggest you consult with local tax professional who specializes in real estate taxation (and perhaps a real estate attorney as well) BEFORE you sign anything.