Helping a family member without putting yourself at financial risk

4 Replies

Hey Bp!

      Need a little help. I grew up in a working class town in southern Massachusetts. It wasn't a terrible location during the late 90's to early 00's but the job market isn't as good as it once was and the area has been plagued by drugs and drug violence. I moved away long ago but my family is still in the area. 

      I have a close family member that fell on hard times about 5 years ago but has made an amazing recovery. They separated from the community that was dragging them down, got sober, and they have had steady employment for the last 4 years. Like many lower income recovering individuals, they're not in the great financial shape and their credit is shot. They have saved up a good amount of money for a down payment and they have a decent reserve. I want to help them get into a house but I want to protect my finances. 

    I realize this is more of an investment in a relationship than real estate. I'm not really looking for financial gain from this deal. Is there a safe way to provide financial assistance without incurring significant risk? I'll probably supplement their offer even if there is no way to limit my risk. Has anyone had a similar experience?  What did you do to help?


Do what you feel is right but be prepared to lose it all. Perhaps keep things in your name until the right conditions have been satisfied. Good luck to you.

@Bobby Thompson a close family member is a tough one. I think any $ you are planning to put up or help with should be considered a donation as you may never get it back. If you are thinking of it as a loan this could certainly become messy in the future.  

Perhaps the person could get a rent to own or contract for deed situation (if wanting to own), or rental, and if you are so inclined you might put up a little $ toward it. "Without financial risk" means you don't finance or own or cosign anything on his / her behalf. I would stay away from being a landlord to a family member I will tell you that.

Family is a tough one, no good answers. Many investors, including myself, have struggled with this same topic.

Good luck!

My last 3 house purchases this year were seller financed with down payments. 2 referrals, one tired landlord that still wanted cash-flow, but no headaches.   Could you help them find a legit seller-financed home?  No land contracts.  No shady rent-to-own.  That would be incredible for them @Bobby Thompson !

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