Buying a duplex for cash in a challenging situation, Toledo area

6 Replies

We recently put our home up for sale and oops, it sold within a week (not yet closed). We've been thinking of moving out of the area for awhile to an area with more job opportunities (not currently employed, wife is retired, and I should work a few more years if possible though we've been able not to touch the savings). Just to make things a little more interesting our daughter's divorce is finally going through. She is unemployed as well but will be receiving alimony and child support, not quite enough to live on. She'd like us to buy her a house but that would mean digging into our retirement accounts. One of the options were considering is buying a duplex for cash, living in one side and her in the other side. The goal is to live with as few expenses as possible, but have the option of capitalizing on the investment if either or both of us moves on. Would like to keep the grand kids in the same school (Whitmer H.S, Toledo, OH). Would appreciate any insights on why this might be great or terrible idea! Thanks.

@Michael Terry - what are your goals? Providing your daughter a place to live rent free sounds like an interesting one. My mindset isn't to pay cash for a property but I'm not of retirement age. Can you acquire a 4-plex or something bigger with a 25% down payment that will not only pay for a place for you, your wife, and daughter to live, but also produce cash flow? 

@Michael Terry I'm also curious about the decision to provide free housing for your (I'm guessing) adult daughter. Just because she won't have to work doesn't mean she shouldn't work... right? That decision doesn't sound like it's in anyone's benefit and will ultimately negatively affect everyone involved. 

If you're looking to actually invest in property then offering free housing is literally never a part of a good investment. Unless it's a multi-unit complex and the person living there is maintenance staff.

Hadn't thought of taking it a step further with a 4-plex, producing cash flow would definitely help. We are strongly encouraging her to find work, sooner the better, and we are conscious that providing housing for the short term is not a long term solution for any of us. Another daughter was in a similar situation a few years back and found subsidized housing (I believe Sec. 8), though we did pay her rent for six months, but I was working at the time. Tough love might be the best solution in the long run, but our emotions are in play. 

Thank you both for your comments!

Sounds like you are willing to go to work and let your daughter take a free ride. Your family must be really tight. If I had worked all of these years and finally made it to the age that I could start to think about retiring and then couldn't because my child wanted to live for free, I don't know if I would be as nice as you.

@Michael Terry Hey Michael, You have a good heart, so lets make sure your mind is in the right place to protect your life savings. As many suggested I would think about purchasing a 4-plex if possible, but a duplex if that is what you are comfortable with. That being said, I would finance it with 25 % down and a traditional mortgage no matter what option you choose. You have capital so why expose yourself without needing to. Take the interest as it will be minuscule in comparison to the change in lifestyle you will have to incur if you paid straight cash. In addition see if you can get your daughter to get on section 8 and rent out out to her so that you can get that government check which is guaranteed. I would just look up to see if family members can rent to section 8 members. Wish you the best in your journey Michael.

Update....decided to lease an apartment for ourselves in the area, give us time to learn more about the market and, find that 4-plex. Protecting life savings makes sense. Have an extra bedroom if she can't find a place to stay, kids can stay with their dad if necessary.

Do appreciate your input! 

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