Hi everybody! Long-time BP listener, but soon to be newbie investor. I would love any advice you guys have for me regarding my situation. So, I'm currently renting a single family home (3/2 1,800 sq ft) in the Cordova/Lakeland area, which is a suburb of Memphis, TN. My father is actually the owner of the property and has approached me about buying the house and would gift me the equity in the house if I agreed to purchase. The remaining balance on the mortgage is approx. $115,000 and comparable houses in the area that I've seen on Zillow have been selling lately for $160,000-180,000.
I'm really interested in leveraging this opportunity for my first step into real estate investing, but I need some help thinking this thing through and determining if it would make sense for me. Not sure if I should buy the house and rent it out, or use it as my primary residence and put the extra money I'd save each month towards saving for a down payment for another property.
I'm pretty young, mid-20's and am actually from the Memphis-area. I'm actually hoping to relocate out of state in the next year or two, but at the moment, I'm thinking that a buy-and-hold strategy is what I primarily want to use to build my portfolio. I welcome any advice you guys might have for me. Thanks!
@Nicole Barnes you could use the house then rent it out when you move. Nothing like a little income in the pocket to keep you going. I would make sure to put the deal in writing, family and money don't mix well. If you're not upfront with each other things might get hairy. Other than that, make sure your numbers work for when you rent it out or sell the property if they don't.
Somehow I always end up the party pooper guy in these threads :) Oh well. I hate to even bring this up, because no one would want to think this, but is it possible your father is trying to unload a poorly performing asset on you? In other words, what's the true value of what you have? The mortgage is probably not assumable, so you would be going for your own mortgage, and that would end up having an independent appraisal. What happens if you find the house is only worth $115?