What and how to move forward

Question

I posted a few weeks ago about attempting to acquire a property from my mother in which she wants nothing to do with by the end of the year which is located in a different state and is a condo in an HOA. It's a 2 bed 2.5 bath in St Peters MO and I'm waiting on a response if it's allowed to be rented besides just a long term rental and they said they need to contact a specialist for an answer. Also at the same time I'm in a program with a local bank to get 5k for a down payment on a property as I want to purchase a small multi family to live in and I have an additional 5 to 10k to put down. I'll need financing to update the property out of state at the same time. How should I attack this? Ideas or advice? I'd prefer to rent it and not sell

Ashish Acharya · Answer

Hey @Matt Moore, sounds like you’ve got a few moving parts here and great opportunities coming your way. You'll definitely want to make everything is set up correctly from a tax and legal perspective before making any moves here.

If the HOA allows you to rent the condo, it could make for a solid long-term rental. Just be sure the transfer from your mom is set up properly, since how it’s done affects your tax basis and any potential gift issues. If not, maybe you could look into 1031 exchange opportunities if the property won't work for your overall plan.

If it does work, seller financing from your mom or putting the condo into a trust are the two best options to avoid capital gains. With a revocable trust, your mom still owns the property for tax purposes, so there’s no immediate gift or capital gains tax, and you could take over later as a beneficiary. With an irrevocable trust, ownership transfers out of her hands, which may trigger gift tax reporting, and you’d inherit her original cost basis, like a gift, so future capital gains could be higher. Trusts can make estate planning easier and provide a clear path for you to take control, but they don’t always help with financing or renting the property right away.

For your multi-family, using the bank’s $5K program along with your own savings is a good move. I’d probably also talk with that same bank, or a few others, to see what they suggest for financing the renovations. The lender should be able to give you more guidance when they have the complete picture of everything you are trying to do.

From a tax perspective, house hacking a multi-family has some unique implications: the portion you live in isn’t deductible, but the rental unit’s expenses mortgage interest, property taxes, insurance, and even a portion of renovation costs, can often be deducted or depreciated. Having a clear plan upfront is key for all of these moving parts. I'd get in contact with your lender, CPA, and attorney (for the trust) to navigate through all of these. Happy to connect.

Elealeh Fulmaran · Answer

You’ve got two parallel plays: 1) The condo: don’t move a dollar until the HOA gives a written green light on your desired rental type; if restricted, price a sale vs LTR hold and include dues, special assessments, and an off‑ramp if they delay. 2) The house‑hack: use the bank grant plus your cash to target a small multifamily you can live in; lock financing first, verify rents in writing, and buy light‑rehab so you’re not managing two rehabs out of state. If you must update the condo, price a simple scope, line up a PM and GC with progress draws, and confirm your exit financing. Next step: get the HOA letter and a lender pre‑approval, then pick one priority to execute first.

Jerell Edmonds · Answer

Okay got you. Your mom could transfer ownership into your name if she willing to let go of the property.

Jerell Edmonds · Answer

Yes most likely some type of fee for transfer of ownership ! I’d wait until the ownership is transferred before anything else . But once that’s all set in done you have equity to grow your RE business

Aaron Zimmerman · Answer

For the HOA, you'll need to do some due diligence.

Look at meeting minutes, financials, and tax returns to verify that the HOA is well managed and has adequate reserves. You can also look through the by laws to see what's noted about renting out the unit. Obviously, you'll need to be allowed to do this for the HOA.

On the financing side, you'll want to reach out to as many lenders as possible to see what type of loan you can get. Otherwise, you could look to do a seller finance note.

Matt Moore · Answer

Sorry to be confusing. My mother owns the property out right and we were trying to figure out a way to get it in my name so I can take over. While at the same time I'm attempting to get a property myself to live in. The property is not currently occupied at the moment and has been vacant.

Jerell Edmonds · Answer

So you own the house 100%?  If anything  see what the rules say about the property being rented . If not come up with a new plan moving forward . If you could sell it and use the profits to move into your first house hack.

Matt Moore · Answer

The new yearly fees will be 260 a month. The property is paid off so I was trying to figure out ways to keep it while also getting my own multi-family to house hack with.

Jerell Edmonds · Answer

Speaking from experience a house I was looking into was HOA. I know I could turn it into a LTR. They didn't allow Air BnB , or to make it into a vacation rental .  A lot of rules go into a HOA and the monthly fee to add on was about $300 each month . Also to note this property I was viewing was on rented land I didn't find out until the very last day and my lender pulled from it. Id take the money you have now and look for your first house hack use the money you have now and buy a decent multi that needs a little  work to build that sweat equity .

What and how to move forward

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