Houston, TX · Member since 2020 · 4 posts · 5 votes
Hi! I need some advice. My parents are planning to sell their home in St. Pete, Fl. This house is a GEM in a great neighborhood where homes are consistently going up in value. Starbucks, marina, lots of activities, etc nearby. I’m a bit bummed but I understand that based on the equity and value it can set them up nicely to retire back in our home town in GA. We have been trying to think of ways to keep it while still setting them up in a good position for the future. The main challenge here is making sure they have enough cash in hand at sale to pay off a few things and settle into their new home in GA. I don’t have enough cash in hand nor do I live in FL currently so it wouldn’t be my primary residence. Any thoughts how we could get creative and keep the home in the family? Thank you all I’m advance.
Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
3y
Does your dad still have his VA entitlement? You could rent out the St Pete home, and buy the GA home zero down (using the VA loan). It really depends on what their goals are and if they want to own a property in another state.
Many people have limiting beliefs around being a landlord and "dealing with properties out of state" even though there are many ways to do that effectively and create passive income for themselves, all while keeping the property!
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
3y
@Beryl Colbert Without the numbers associated with your parents Florida home we can't accurately answer those questions.
Regardless, this transaction is more about your parents and less about you. Assuming the property has appreciated and probably has/had fixed rate debt what your parents decide to buy next is just as important as selling. If they down size and don't over spend it's a win-win. The equity in FL could in affect pay off an entire house in GA. If they get back into higher rate, debt on a bigger house, at retirement age that makes no sense. Younger investors leverage RE early and often. Older investors scale back and sell off properties (duds and winners). Be clear on your parents goals and align the conversations around it.
Are your parents REI savvy? What level of leverage are they comfortable with? If I asked my parents to pull a HELOC on there primary residences they would laugh in my face. They DON'T understand creative RE strategy. If the tax savings are there selling is usually the correct non savoy move. The cash should be redeployed into the next property. I'd focus on where they want to deploy that cash. Help them find/buy/create an opportunity that they can afford and create the win-win situation you're seeking.
Houston, TX · Member since 2020 · 4 posts · 5 votes
3y
@Jaron Walling thank you for this thoughtful reply. Adding numbers in my original post. They are downsizing and homes in the market they are moving to are significantly less. Based on comps in the are they should be able to get around $450K before reno conservatively. They owe about $150k. The new home will be about $275K and my dad qualifies for a VA loan. They are open to my ideas/feedback and I'll definitely keep trying for a win win situation.
Investor · San Diego, CA · Member since 2016 · 1k+ posts · 975 votes
3y
Does your dad still have his VA entitlement? You could rent out the St Pete home, and buy the GA home zero down (using the VA loan). It really depends on what their goals are and if they want to own a property in another state.
Many people have limiting beliefs around being a landlord and "dealing with properties out of state" even though there are many ways to do that effectively and create passive income for themselves, all while keeping the property!
Houston, TX · Member since 2020 · 4 posts · 5 votes
3y
Thanks @Doug Spence He does still have entitlement left. Our main concern was making sure they have additional cash after everything is said and done. All in all we are still exploring that option.