Family Transferring Ownership
Hello BP members! I'm fairly new to investing and I've been a silent investor for the most part. I have a situation that I'm hoping you all can help me with. I have an uncle who is ready to get rid of his investment property. Because we're family, he's willing to transfer the property without me having to put down a single dime. He said I can take my time paying him off. What's a good way to approach this?
My plan was to take over the property, renovate it, and refinance to pay him back. His home is worth @160k (currently), he's willing to sell it to me for 137.5k. ARV will be over 200k.
Most Popular Reply
He has no children or heirs? No wife? Yellow pad hand write what the agreement is exactly.
I Uncle am giving you x property for x dollar amount. Luyen Nguyen from x day forward will be responsible to pay for taxes, insurance, improvements, everything yada yada.
Uncle: "Luyen Nguyen will pay Uncle $23000 over the following four years at $480 a month due on the 1st of the month. Paid in full on X date...." then keep your agreement like clockwork.
Sign, date, three witnesses who are not relatives and not party to the transaction sign and date.
Family Transfer Deed to a Living Trust that you and he are trustees. Then that Living Trust can transfer into your own Living Trust. In your state there are going to be transfer taxes, increase in property taxes, and federal gift taxes due to not being a close relative (uncle is not the same as a father). The county knows the current value and will increase property taxes accordingly. Get some tax advice from a CPA to prepare to pay for the gain.
Or you can get an attorney to write it up and have the details ready.
You need a title company to do the transfers and get insurance to find out if there are liens and problems that uncle didn't disclose or doesn't know about. Does uncle get Medicaid? Gifting money may reduce his medicaid, get advice on this... it could be disastrous to not have health insurance if elderly.