Buying out parents?
So my father has a small rental unit with a large detached garage at one location and a house that needs work where he currently resides. The problem is that the house he lives in now needs a decent amount of work and he cannot afford the work and for him to refinance the work on the loan it would make it too expensive for him to live there. Also he wants to get both of his properties out of his name in case something happens health wise.
Anyways the rental only produces 950/mo and really only floats the rental mortgage and is used for storing tools in garages. My idea was to see if it's possible to take over both loans and fix main house up then refi and rent out the main house. Doing math on it that way I should be able to acutally make $800/mo cash flow on both units with a new loan. Then refinancing and buying a 3rd house to live in and using the cashflow to offset costs of mortgage and having my father live with me until I flip that one or buy another. The good thing is that the 2 original houses have equity and the third house would have equity too.
No rental income
So the total costs would be about 438k. The monthly expenses would be around 3,400/mo
So subtracting the rents on both original houses leaves me with a $800/mo mortgage on the third new home which I'd live in with my father and split all costs making it extremely affordable for both of us. I know that there's other expenses obviously but right now my father is paying $1,400/mo mortgage for the 2 original houses and he is having a hard time floating them both. Also it helps get the properties out of his name. Another good note is that the three properties together all fixed up would be worth over 600k. So I'd have lots of equity to work with in the future to buy other buildings. Has anyone done anything like this before with their parents? I think it would give a major jumpstart to rentals for me even though the only money made is in equity. Also as far as repairs go its what I do for living so I already know the costs of that. Thanks
You can get a blanket loan, or a portfolio loan for the houses he currently has. The third house you could just get yourself after 6 months on the blanket.