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WiseOwl58
WiseOwl58, Lawyer
Category: Real Estate Law
Satisfied Customers: 3654
Experience:  Experienced real estate lawyer and real estate broker.
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I received this email from an investor of mine who invest

Customer Question

I received this email from an investor of mine who invest through his self directed IRA, now he is sending my attorney emails asking her to change escrow demands already submitted to the loan officer to not charge the interest on the loan but recategorize it as profits in the property so that the gain hits his self directed ira and there is no tax. When we funded this loan I had forgotten that his self directed ira was the owner of the loan, and afterwards I learned that the act of his giving me a loan to rehab a property that is ira already owned a 30% interest in is an act of self dealing. What do I do now to keep out of trouble and not mess up this sale for the buyer
---------- Forwarded message ----------
From: "XXXXXXXXXXXX"
Date: Oct 14, 2015 9:06 PM
Subject: RE: XXXXXXXXX Closing
To: "XXXXXXXX"
Cc: "XXXXXXXXXXXXXXXXXX"
Good Evening XXXXXXXX,
I just spoke with XXXXXXXXXXX and we see the wisdom in an arrangement different than what we originally proposed, however from the perspective of the actual cash amount invested by the parties we believe a more equitable arrangement would be to disburse the original loan amount of $200,001 to XXXXXXXXXXXX excluding any interest and points that are due. The original loan amount included approximately $37,000 for repairs. Using our $37,000 and allowing for another $37,000 of additional cash investment by Crimson we come up with a total to be distributed of $237,001. Crimson would receive all and likely more than was actually invested and we would receive our original investment.
Seems pretty straight forward and simple to write up escrow instructions to meet those terms and then we can use the next few days to work through the details for final disbursement. An additional benefit is that Crimson Investment Group would not incur the additional interest expenses on the original loan amount.
Look forward to seeing your escrow instructions in the morning.
Talk soon,
XXXXXXXXXXXX
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  WiseOwl58 replied 1 year ago.

Actually, this is not your problem. It is for your investor to work out himself, and you shouldn't be involved, nor should you incur any legal fees in doing so. I think you have to turn the matter back to them for resolution, and if they mess up your transaction because of it, you have a legitiimate claim for damages and lost profits.

Please rate 4 or 5 and close out the question. Good luck to you. I wish you all the best.

Expert:  WiseOwl58 replied 1 year ago.

please review the answer and rate 4 or 5 to close out the question. Thanks.