Here's the deal: I would like to borrow about 70-100K from Mom and Dad to buy and fix up a property that I will hold and rent out. We're thinking about a 30 year loan at 5%. My parents are retired and would just like to receive the payments. Due to their ages they will likely not outlive the loan.I am their only child and sole heir, so that doesn't really seem to matter. Is there any problem with this type of arrangement, and dose anyone have any suggestions on how to make this all legal? We, my parents and I, live in the state of Virginia.
The issue may be in their estate passing to you without taxes. The fact that you may owe on the note may have forgiveness of debt owing taxes on the amounts remaining.
You might be better off setting up a trust funded by your parents and purchase the property in the trust so that you can manage (or someone else can) and receive income from the trust, if you get a manager you may have passive income.
You might consider too simply taking title to the property with your parents as title will pass to you upon death.
I suggest you seek tax advice and ask your attorney, notes are not always the best way to structure an arrangement :)
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