Please critique my idea

**newtoRE** · 06-16-2009, 09:55 AM

I hope I put this in the right category. I put it here since I am trying to make money from an investment.

I am trying to come up with ways to take advantage of the tax credit for first-time home buyers. It is way too expensive to buy in my area(Vail, CO), but I could purchase a house in Denver. So here are the basics.

I am looking at properties in the 40-80k range. My thought is to buy the property by December 1st and receive 10% of the value from the tax credit(up to 8,000), use some of that money to fix up the place and then sell.

My question...If I sell the property within one year, will I have to repay the tax credit? Are there other penalties or implications I have not thought of?
Is this even a sound idea? 10% of the home's purchase price given to me sounds really good. Even if I put nothing into the house and it sold for the exact same price, I would still net a nice little profit. Any thoughts?

**rentec** · 06-16-2009, 10:37 AM

Here's a handy resource for you regarding the 8k redistribution of wealth sponsored by the fed. Offhand I'm not seeing a requirement to repay it if you sell the property a year later. But I'll leave it up to you to read the details.

http://www.federalhousingtaxcredit.com/2009/faq.php

**newtoRE** · 06-16-2009, 10:49 AM

I found my answer. If I were to sell the home(or convert it to a rental property) within 36 months of purchase I would be responsible for repayment of the tax credit.

**real0** · 09-18-2009, 06:37 PM

I think you should repay the tax to fair with other but I don't know the exact price and maybe there's no implement on that since you don not make any violations. But as much as possible selling property could 5-7 months.