My fatherinlaw lost his house about 5 years ago to forcosure. He has been renting ever since. I was talking to him today and he said he will never buy again because he has been burned. He's living month to month and has very little savings.
How can I show him how buying makes sense in the long term? He is in his mid 50's and is convinced he will be working to the bone until he dies. He's so defeated and it breaks my heart to see it. His wife doesnt work, but i think when getting the alcohol under control she has the ability to step up.
Does anyone here have links i can show him that have simple breakdowns and arguments to why he should buy (and buy right) vs rent. He respects me but wont take my advise unless i can back it up with facts. He would rather avoid the conversation than actually think it over.
Id love to hear your suggestions!
Unfortunately, If he's living month to month and has very little money maybe buying is not the best option for him right now. He may have difficulty putting up the down payment, closing costs, etc.. which would put him in a deeper hole.
Maybe the best way to go about it is to help him get his finances in order first and then talk about home ownership again down the road when he is in a better place.
Just my .02
I still need to show him how home ownership will be beneficial so he has something to work towards. Basically he's looking at his feet instead of looking ahead. I asked him what his 10 year plan is and he told me he doesn't have one, just living one day at a time.
Even if he has to wait a couple years, at least he would have a better idea what he needs to do now to get there.
When did he buy the house? How much did he pay? What did he borrow against it? Did he ever refi out equity? If so, what did he do with the cash? What were the terms of his loan?
Look at the history and for any mistakes he made. Show him those mistakes and how to avoid them again. Then show him what his house would have been worth if he held on and what his loan balance would be. Maybe seeing the details laid out by a pro investor such as yourself, he can see that owning makes more sense for him.
Of course, what you are not considering is that sometimes owning isn't the right answer. Sometimes being a renter is better. If that is the case, and you are insistent that he should own a house, maybe you could find a house to buy, then sell it to him on terms.
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