I am still new to the real estate investing world. And before I found out about my father's move I was already planning on investing in real estate once I learned more and got myself in the position to start. But yesterday my dad tells me that he is planning on moving and that we need to have a talk about my future, if I go with him or if I stay here in Pittsburgh. My question is, if my father agrees to transfer the house into my name will I have access to the equity already in the home and be able to do a cash out refinance to jump start my real estate investing career? I've tried to search the forum for any posts with someone in a similar situation but didn't have any luck. If anyone has any input or better suggestions I would gladly appreciate your help. Thank you
You should first consult with an estate planning attorney. You could be responsible for a gift tax. Is there a mortgage? The bank could call the mortgage if the deed is transferred. As far as equity you will have access to the equity subject to any existing mortgage or leins. You should have a title search done and make sure all taxes are paid as and there aren't any betterments that haven't been paid. You have some research to do @Ryan Howard
Yes I know I have a lot of research to do. All of this just came about out of nowhere so I'm just trying to figure out all of my options now. But I'm going to be talking to my dad about everything later on today so I will have a lot more information after we have this talk. Will definitely be asking about the mortgage and taxes. I'm just trying to play my cards right, find out all the information I can and what my best option will be to use this opportunity to my advantage
There are better ways to go about this than to simply have him deed you the home. As @Rob Beland mentioned, gift rules will come into play though your father will be responsible for reporting the gift, not yourself. Any gift over $14k will decrease your father's lifetime exclusion of $5,430,000 (for 2015). This means that if your father gifts you a $200k house, it will decrease the lifetime exclusion by $186k (200-14). Taxes will not be paid on the gift now, they are only paid once the lifetime exclusion is surpassed.
Best to speak with a competent real estate or estate planning CPA.
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