Should I use the equity in my parents home to start buying rental properties?
Hello Eddie! There is so much more info needed to give appropriate advice. How much equity is in your parents home? Are they okay with you gambling their house on investments? Are you okay with it? What is your experience level?
Now if you are asking can you use your parents equity to buy rental houses, sure. You can't access it though. They would have to.
Be careful leveraging your family's money for business ventures. It can get tricky really fast. Good luck!
I love the strategy of using a HELOC to purchase property. However, if you have no experience and no other resources, I doubt gambling your parents home is wise. Your family and relationships are much more valuable than any property, if you go this route, make sure you know exactly what you are doing.
@Jon Schoeller I have some experience with real estate. Mostly helping other people on their projects while trying to learn the ropes with a hands-on approach. I've read all the books, took the rich dad seminar, and I have a list of mentors and coaches.
My parents have over 100k in equity on their home. They know that they want to invest it but dont know what to invest in. I wanted to purchase a cash flowing 3 family triplex in my home town because I know the market and with businesses moving into town I feel like things are only going to go up from here. I have a private money lender who is willing to fund 70% of my next deal (purchase and rehab costs) and my parents are willing to fund the other 30% plus closing costs.
I am fully aware that if my first deal goes south that my parents will be living with me. They know it, and I know it. It's not something that I will be taking lightly. They're in their 70's with nothing but social security for their retirement. They were brought up on the idea that if you take care of your employer, your employer will take care of you. I want to do what I can to help them enjoy their golden years. We have discussed the pros and cons and it's all out on the table. I dont have enough equity on my house to make it worth anything, unless I was to buy a lemonade stand.
Any advice is appreciated.