Currently living in Tuscaloosa and I have the opportunity to sell my dads house (that I have been house hacking for the past year) or buy it myself and make it my first rental property deal. My dad said I can keep any profit but I have to give him 120k. I would love to sell it and make a small amount for a down payment on a duplex or triplex. I am willing to try different things with the deal to possibly further my experience/education. Any suggestions or tips are greatly appreciated!
Where is the house in Tuscaloosa? Some areas are better to keep as Rentals and other areas are better to just sell and move the funds to another area with higher returns.
You didn't mention the value of the property or what you stand to profit. What could the house rent for? There's lots of ways to go about this.
@Andy Kennison - is there enough room in the deal to "cash out refinance", pay your dad off, keep the house (as yours or a rental) and take the remaining cash to put as down payment on a small multi-family?
Since my dad bought the house with cash would I have to put debt on the house and wait a year to cash out refinance? We bought it for 70k and put about 25k in rehab.
You’re still missing basic info in your post to answer your question. What’s the current value of the house and foreseeable rent.
-Thank you all for responding.
@Richard Henry, it's on the east side of town on Kicker road by The Home Depot. The Starbucks on Veterans Memorial parkway is less than a mile from my house. It's in a good area.
@Corby Goade, I am unsure of the property value. I need to get an appraisal, right? Im curious what other houses are selling for so i called a realtor today and found out a house in my neighborhood is on the market at 159k (doesn't mean a lot). My dad has charged me $600 for rent since we bought the house in 2014. I have been renting one room to my friend for a great deal of $200 and he pays a third of power, water, and Internet. I was renting the other room to a tenant I found on Craigslist. He ended up being a great tenant/roommate and paid $500 for all bills. I think I could get $400 per room and $450 for the master bedroom when I move out.
@Jay Helms, I am determined to understand the cash out refinance part. My Dad bought the property in 2014 for 70k cash. We then rehabbed it for 25k. So I think what that means is getting the house appraised and getting a 120k loan for my dad and the leftover equity in my house would be the "cash out refinance"?