Hello my fellow Investors,
I had a question about an opportunity that may have just presented itself.
I am new to investing o I am not quite sure if this will work or not.
My parents have been renting their home for over 10 years at 800/month. The landlord has now told them that he is looking to sell the house and offered my dad the house for $110,000 if he wanted to stay in it.
The house needs a lot of work done to it. The house right across the street was just purchsed for $75,000.00.
Is this an opportunity for an investment property that can save my parents from having to move?
Cameron, I'd advise you be careful when mixing investing and family... You don't want to make a bad investment. If the house across the street sold for 75K why would you pay 110K for one that needs a lot of work (assuming the houses are comparable)? Do you plan to charge them $800 a month? That's less than a 1% return you can do much better than that on a rental property.
If you are willing to make a sub-par investment in order to make your parents happy, I say go for it, no harm in that. But this doesn't sound like a situation where you can make them and your bank account happy.
thank you for your reply Chris!
I should have been more specific.
I would offer the landlord less than 110k of course.
The house is not in the greatest shape. I was thinkingb about getting it appraised before making an offer. I'm thinking somewhere around 80k.
Then getting work done on it and getting my parents qualified for a mortgage and selling it to them.
Something like that
Before you do anything or even make an offer make sure they are qualified for a mortgage.
I have seen so people go through picking out a house before they are even approved for a mortgage. Only to find out they aren't approved.
Once approved for a mortgage I would run the numbers and see if it makes sense to have it as a rental. If it doesn't cash flow then it won't work as a rental.
Thanks for your input Jerry!
That's the plan is to have the property in their name.
My original idea was to have the property appraised and bring an offer to the landlord.
After that I wanted to get estimates on repairs and add that amount to the total amount. Which in doing so getting my parents qualified for that amount.
This way they have the house in their name and have repairs happening without any money out of their pocket.
So for example offer 80k to the landlord and get my parents a loan for 100k so they can pay the landlord and get repairs done.
A little confusing but I hope that makes sense.
Again I'm not positive how any of this actually works but that's what I was thinking
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