Investor · Atlanta, GA · Member since 2017 · 33 posts · 8 votes
Hi BP: Mom inherited property, paid off, valued at ~$120k. Cash flowing only $600/month due to the other rental house being run down and now unrentable. (there was two)
I'm trying to get creative to leverage the property for further REI. Options I'm trying to consider below—any advice or if I'm missing an option, please reply...
- she cash-out refis and we invest together on something
- she adds me to the title, seasons for 6-months, I cash out refi and invest
- she sells to me under market so I have a safety net of equity in the property, the $600/ pays the note and we use the money on the sale to invest
- she sells and we move on to something else (but uncle lives next door and uses the property for storage, so has talked her into not selling at the moment)
$120k cash is silly sitting there generating $600/month... I'd like to leverage the money.
Any other options? Or is there a better option over another?
@Chris Smith so she inherited at the stepped up basis. Two houses on one lot, and some storage? One house is unrentable and one rents at $600/ mo. Is that market rent? what does it take to rehab the other house to rentable condition? Is there a market?
If you want to leverage you need to be on the title, she can gift you some part of the property or you could put the property in an LLC finance as an investment, you each own part of it and you each share in profits. She can gift you some each year. The advantage of not having her own the property is if down the road she needs care it is income to her and not a straight asset. You could also do a trust. I am not a lawyer you should consult one to decide how to handle this after you decide whether it is a viable rental property.
@Colleen F. thanks for the reply. Both trailers. Lol not worth the rehab or time. Could raise rent maybe $50/$100 and something to look into if we refi. I didn’t think about gifting a portion of the property or trust. Something I’ll look more into. Thank you again!