Purchasing my Parents house so they can retire

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Purchasing my Parents house so they can retire

Julio Cruz
Real Estate Agent · Dumfries, VA · Member since 2015 · 20 posts · 7 votes

My siblings and I would like to purchase my parents house so they could retire. The house is in Brooklyn New York. And it’s worth about $700,000 and they owe about $230,000. I don’t have the cash the purchase it out right l. But I am looking for different ways to purchase with different financing. Or maybe private money. I would like to give them a lump sum of money while having money to fix up the property so they have a good amount of money to retire. How would you do this? Or do you think I should just let them sell it.

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Abel CurielBusiness Member
Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
5y
Originally posted by @Julio Cruz:

@Abel Curiel @Scott Wolf

So my biggest thing is that no it’s a three unit property written in the area is going between to 1820 500 a month if I could renovate and have all three units rented that would yield me between 5600 and say 6500 a month in rent I’m just wondering what finance options I would have in order to help my parents do bothOr should I have them stay in the bottom unit and just rip rip the up to upstairs two units.

I did not fully understand the first portion of that message but depending on location, unit size, amenities, utilities, etc., I'd say $6,500/month is a realistic rent roll.

Regarding financing, I'd recommend speaking with a lender about your parents options to cash-out refinance and get you on the loan. You can also discuss how much of a loan you'd qualify for in case you are doing a straight sale. In that case, you'd just need a RE attorney to help coordinate the purchase.

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  • Scott WolfPro Member
    Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 956 votes
    5y

    @Julio Cruz, why do you want to buy it? Is it a good investment for you, or just for them to get out of it?  If it's the latter, then just let them sell.  

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    Hello @Julio Cruz, I agree with @Scott Wolf.

    Unless this will become a cash-flowing investment from Day 1 or your primary residence, I'd recommend selling it. 

    Inventory in many parts of Brooklyn is very low. They'd likely make more money for retirement by starting a bidding war on their property than they would selling to you. Again, this is ONLY if the deal is not for investment/personal residence... I understand there may be sentimental value to the place so I know there are other factors to consider.

    Best of luck to you moving forward!

    Abel

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  • Julio Cruz
    OP
    Real Estate Agent · Dumfries, VA · Member since 2015 · 20 posts · 7 votes
    5y

    @Abel Curiel

    I will be purchasing the property as an investment property not as a primary residence the property is a three unit property

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  • Julio Cruz
    OP
    Real Estate Agent · Dumfries, VA · Member since 2015 · 20 posts · 7 votes
    5y

    @Abel Curiel @Scott Wolf

    So my biggest thing is that no it’s a three unit property written in the area is going between to 1820 500 a month if I could renovate and have all three units rented that would yield me between 5600 and say 6500 a month in rent I’m just wondering what finance options I would have in order to help my parents do bothOr should I have them stay in the bottom unit and just rip rip the up to upstairs two units.

    0Reply
  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    5y
    Originally posted by @Julio Cruz:

    @Abel Curiel @Scott Wolf

    So my biggest thing is that no it’s a three unit property written in the area is going between to 1820 500 a month if I could renovate and have all three units rented that would yield me between 5600 and say 6500 a month in rent I’m just wondering what finance options I would have in order to help my parents do bothOr should I have them stay in the bottom unit and just rip rip the up to upstairs two units.

    I did not fully understand the first portion of that message but depending on location, unit size, amenities, utilities, etc., I'd say $6,500/month is a realistic rent roll.

    Regarding financing, I'd recommend speaking with a lender about your parents options to cash-out refinance and get you on the loan. You can also discuss how much of a loan you'd qualify for in case you are doing a straight sale. In that case, you'd just need a RE attorney to help coordinate the purchase.

    REbuild Team - eXp Realty5234 Reviews
    WebsiteView Page
    3Reply
  • Scott WolfPro Member
    Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 956 votes
    5y

    @Julio Cruz I echo @Abel Curiel's sentiment about talking to a lender for financing options.  If you need recommendations, feel free to reach out.  

    You should also run the numbers to make sure it will be a good investment.  I'm not sure about your parents financial situation, but if they can hold onto it your family will benefit further by them willing it to you & your siblings upon their passing (hopefully in the very distant future).  You will get a stepped-up basis, and will be able to use the money you currently have to invest in other properties.  Good trust & estate planning is very important for building generational wealth.

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  • Charles Xia
    Investor · New York, NY · Member since 2019 · 44 posts · 30 votes
    5y

    Hi @Julio Cruz

    As @Abel Curiel said, look into a refinancing option and get your name on the loan, you can also add your name to the title in this process. It's easier to pay of the current debt for the mortgage than to purchase the property for your parents. Purchasing property for your parents would be a good idea if you wanted to give them a lump sum of money, but since they are your parents and you do seem to love them very much you can give them an allowance or something. Better to give them some money than to owe a very large portion of money to the bank.

    Happy Investing,

    Charles

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