Hard economic situation. Parents asking me to get mortgage

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Hard economic situation. Parents asking me to get mortgage

Javier Blanco
Atlanta, GA · Member since 2018 · 25 posts · 9 votes
Long story short. I am inmigrant, my family and I got here (Atanta) aboit 4 years ago. My father got laid off in May and due to his age and high level of expertise its really hard to find a corporate job. My mom cant work at least right now due to health issues. We have been renting a condo all the time but now since I know quite a bit of real estate I have been telling them that renting tnalthough it was convenient due to different factors it has also been a waste of money. They agreed to try to find something to buy but my father doesnt have an amazing credit score like me or my brother, plus he is unemployed so he wont get a mortgage. I told my brother that he has to be the one getting the mortgage because I have plan of starting my real estate investing career in January (buying a duplex) so I cant have a mortagage like that on my name because my debt to income ratio will be high. Also they want to get a condo or a townhouse because its more comfortable and I am here dying in my mind thinking on HOA fees, not having an extra room to rent for house hacking, etc. My brother told me that one of the lenders told him that the loan options would be better if we both are in it (me as a cosigner) thing I refuse to do. If I help, I want to do it under my terms. Buying a house, getting an FHA owner occupied or something like that. Please I need some advise!!
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Jerry W.Pro Member
Moderator
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
8y

@Javier Blanco, there is often no right answer on how to deal with family. Hurting your financial situation to help them out has its limits. If you have family who has problems are you expected to be the welfare to take care of them forever? Still we feel have to help them. Perhaps a compromise. Buy the duplex or house that you want for an investment and rent to them. If they have their own money they get to choose the house, if it is your money and credit then you get to choose the house. Make your brother co-sign on the lease. They might not like it as much, but it will be good housing. Hopefully they will take very good care of it. You still get to show rental income on the house, build equity and start your portfolio. If your brother wants buy it jointly with him. If need be you 2 can still pay the rent, show it as income and keep your DTI up. You can claim interest and depreciation as well. Now maybe your parents want to own it? However since they are older what if one or both must go into a nursing home but cannot afford the $7K a month or more? If your parents own the asset then Medicaid will place a lien on the property and eventually sell it to pay for nursing home care. The look back period on their property is 5 years. You can provide for your parents and build a portfolio at the same time. Just a thought. Either way good luck bud, hang in there.

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  • Rich Senyszyn
    Member since 2018 · 46 posts · 43 votes
    8y
    @Javier Blanco That is really tough. Different families have different requirements for helping out so I can only say what I would consider. First, I would never co-sign a loan, especially with family. Second, you could buy a bigger place and rent out rooms. This is where you have to put on you big boy pants: if you buy the place then you make the decisions. You get to decide where and what to buy and where everybody goes. Also, you can see on the site there are plenty of ways to get involved with real estate initially without buying anything. Bird dogging, wholesaling, managing, and others. All which will lead to more contacts. Even if you have to delay your career for family, improving you capital position is never a waste of time.
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  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    @Rich Senyszyn Thank you very much! The main problem is that its not only me the one who is going to pay the monthly mortgage but also my brother. But I already said no way I will cosign on that loan. Yes, that would be my plan getting a bigger house or an actual duplex so we can leverage some of the expenses through rent, but my parents and ironically brother are saying I cant think of that house as an investment because my parents just want a house to live comfortably their retirenment (which makes me ****in mad) because its such an stupid idea especially with our situation. I am extremely frustrated, everybody is making me seem as the bad guy that doesnt wanna help the family because I have my own plans.
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  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    8y

    @Javier Blanco, there is often no right answer on how to deal with family. Hurting your financial situation to help them out has its limits. If you have family who has problems are you expected to be the welfare to take care of them forever? Still we feel have to help them. Perhaps a compromise. Buy the duplex or house that you want for an investment and rent to them. If they have their own money they get to choose the house, if it is your money and credit then you get to choose the house. Make your brother co-sign on the lease. They might not like it as much, but it will be good housing. Hopefully they will take very good care of it. You still get to show rental income on the house, build equity and start your portfolio. If your brother wants buy it jointly with him. If need be you 2 can still pay the rent, show it as income and keep your DTI up. You can claim interest and depreciation as well. Now maybe your parents want to own it? However since they are older what if one or both must go into a nursing home but cannot afford the $7K a month or more? If your parents own the asset then Medicaid will place a lien on the property and eventually sell it to pay for nursing home care. The look back period on their property is 5 years. You can provide for your parents and build a portfolio at the same time. Just a thought. Either way good luck bud, hang in there.

    6Reply
  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    8y

    I agree with @Jerry W. Buy a duplex/triplex/quad and rent the other apartments to your parents and/or brother. You're still investing in real estate and they will have a place to live. They may not have their dream place, but they have a place to live. Unfortunately many people live their lives spending all of their money and not saving for their older years and then realize they have nothing to retire on. It's going to be hard to convince them that they can't have what they want at this point, but don't put yourself in a financial bind to help them out. I have people close to me who haven't made the best financial decisions either and I've been trying for a while now to get them on the right track. I haven't given/loaned them money, but just tried giving them advice. They haven't quite listened yet...

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    8y

    I don't like mixing business with family/friends. It is a bad business decision and runs the risk of ruining relationships at the same time.

    It's one thing to help family short-term but obligating yourself long-term with significant debt is bad. Find a way to help them get back on their feet without derailing your own life.

    Even the idea of a triplex is bad because you would be renting to family.

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    1Reply
  • Anthony Wick
    Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    8y

    Are you looking for advice, or are you actually looking for people to tell you that you are not the bad guy? I don't think you're the bad guy. There isn't a bad guy in your situation, just a tough situation for your parents. 

    Now, this isn't advice, just what I would do. I would tell my family; "I'm sorry, but I am not in a position to buy mom and dad a house to live in. If I do that, then I will not be able to be successful in my life." Then explain to them your plan. They don't have to understand it, or even like it. But if they don't respect it, then that seems to be their problem, not yours. I would never just outright purchase somebody a home or pay their rent (even mom and dad) if I can't afford it. 

    2Reply
  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    Thank you! @Nathan G. Yes Nathan! That is exactly what I think business and family shouldnt go together they always end up bad! And yeah the duplex is a horrible idea because thats the whole point the dont have the money at least right now to pay the mortgage. Thats why me and my brother would have to help with that. They have money for the down payment. My father is trying really hard to get a job but nothing yet and sadly my mom is in no condition to work at the moment.
    0Reply
  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    @Anthony Wick Thank you very much Anthony! And that is exactly what I think! Of course I want to help but right now I am 22 years old and I feel like I should be good first in order to be able to help others. Sadly in most of south america were I am from (venezuela) you are expected to help family you know take care of your parents when they are old (thing Inagree with) but when they actually need not when they are rellatevely young (50-60) and still are able to work. But again the problem is that my father hasnt been able to find a job, my mother doesn not know english and her health condition doesnt help right know. My brother thinks we have to help and when I explained him this, that I “didnt“ want to help at least right now he told me how cam you be so selfish you can do whathever you want but if you dont help you are dead to me. I just dont understand how they dont see that the best option is to buy a house in order to rent some space! but they want a ****in condo or townhouse, it looks like they dont understand they situation! And I wanted to buy my duplex in january to house hack
    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    It is a mistake to think renting is a waste of money. It is in fact the least expensive way to live assuming one is reasonable about what they rent. Your parents can not afford a home and should be told that. You and your brother should not be enabling them. If they want to live in a condo they should rent one not buy it. 

    Your parents and brother are crazy to be thinking they should be buying a home they can not afford especially when he is unemployed. Your brother has a serious problem and you need to distance yourself from him.

    Step away from this entirely, get off their crazy train.

    2Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    8y

    You are in a difficult situation. Your family is attempting to bully you into making a financial decision that is bad for you. 

    If you are going to consider this as a possibility, before make any commitments, I think you should see a therapist-- especially if you hope to maintain a healthy relationship with your family. See if you can get your family members to go with you. (They should be willing to spend an hour or two hashing this out with a therapist since they are asking you to make a longterm LIFE CHANGING commitment for their benefit.)

    0Reply
  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    @Fred Frontstone He is 58 and he had some really good positions internationally, so he is overqualified for most of the positions and then too old for others.
    0Reply
  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    @Fred Frontstone Sadly thats not how corporations work. We are in the situation we are because we left from venezuela. The currency has no value and we had to sell everything to come here.
    0Reply
  • Javier Blanco
    OP
    Atlanta, GA · Member since 2018 · 25 posts · 9 votes
    8y
    @Fred Frontstone Yes but thats part of the problem. How old are they? And also my father’s back is damaged because when kid he almost killed himself hiking. So he cant do some jobs even driving for too much time messes him up. And rehab and treatment of back will be more expensive than not having a job. So that takes away some jobs
    0Reply
  • Will C.
    Rental Property Investor · Richmond, VA · Member since 2016 · 279 posts · 133 votes
    7y
    @Javier Blanco Don't buy anything with family. Let your brother help your parents if he wants, whether renting or purchasing within their budget. You start your investing with multi or whatever but separately. You can take some of the CF from your investment and give them a gift card to grocery store or something similar on a monthly basis. You would be getting your start and helping them at the same time.
    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Your fathers unemployment situation is nothing but excuses. Tell him to get his butt off the couch and find whatever job he can get, Home depo is usually hiring. Excuses don't cut it.

    My scenes is that both you and your brother are enabling him and he is manipulating your brother through guilt. Nice....as suggested the family needs help.

    He should absolutely not be buying a home.

    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    I would tend to agree with the others . Do not let your family drag you down . I’m sure you guys are trying ,I’m sure they mean well but mixing business and family is never going to work . It usually ends in bankruptcy and broken relationships . Focus on your on deals by yourself don’t get guilted into doing a foolish business transaction or you’ll regret it big time . Your parents have unrealistic expectations .frankly I’m surprised they want to live in a bIg money condo or fancy townhome and It seems they are not overly interested in working even if it’s a pay cut or doing a meanial job . I would think coming from a third world hell hole where money is worthless their standards would be lower. They are in no position to own and you are in no position to be taking on debt or bad deals for them . The bank is not dumb . There is a good reasoning on why they can’t get a home loan
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