My Retirement Plan

4 Replies

Below is an idea I’ve been kicking around. I’d appreciate any feedback...

In general my retirement plan is to sequentially buy homes on a 24 month cycle for myself, my son and his wife and and my daughter. The goal is to do this profitably and tax free.

Background:

I’ve done two profitable, owner-occupied, “slow” flips. I like the process and plan to ramp this up with 2-3 more before I retire in a 2-3 years.

My Retirement Plan:

A typical scenario would be for one of my kids to buy a house (I’d help with the down payment and renovation costs). I’d renovate it while they lived in my place. Once I’m done, they’d move in and live in it for 2 years. They would then sell it at (hopefully) a profit and be able to exclude the gain from their taxes.

In a perfect world, we’d do this sequentially so that I’d always have a project and we’d be cycling through the houses (son - daughter - my own place) so that each of us is building equity tax free.

The buying decision is theirs - they have to live there and pay the mortgage. Also, the selling decision is theirs - 2 years is the minimum to exclude the gain, but they could stay longer if they prefer. I could just go find other solo opportunities if they wanted to opt out.

My thought is, they're going to get my equity at some point. They might as well put it to use sooner rather than later ;-)

Assumptions:

  • We’d live within 10-20 miles of one another.
  • My kids and their spouse(s) would provide assistance to the renovation process as they are able to.
  • While buying rental properties probably makes more sense, I have zero interest in being a landlord.

Thoughts??

So whT is your retirement plan? 

I would buy rentals, be an investor. 

Helping your kids out is good, but it will either cost you money or alienate your kids. That is the only two options. I have helped two of my kids build homes, and with both, I had a sizable out of pocket amount as well as work. I am glad I was able to do it, but it was not cheap. 

Being an investor can be a good retirement plan, but you have described something totally different.

Arlan, 

Thanks for the reply.  I should clarify that I already have a retirement plan in place through my "real" job, this would be supplemental.  

The supplemental retirement plan is to build equity for all of us by sequentially flipping properties.  

Again, I don't want to invest in rentals.

@Dale Jackson

I don't like the idea.  

1. You can't time the market with a 2-3 year exit

2.  The product your selling is not new if someone has been living there

3.  Opportunity cost of tying up your $ 

Originally posted by @John Weidner :

@Dale Jackson

I don't like the idea.  

1. You can't time the market with a 2-3 year exit

2.  The product your selling is not new if someone has been living there

3.  Opportunity cost of tying up your $ 

 John,

Thanks for the reply, certainly these are valid points.  However, in my situation, I would be retired and am not really looking to eek-out every last dollar.  

It's more of a lifestyle plan... my kids and I all need a house and this would be my version of sequential "house hacking".

Also, this wouldn't preclude me from doing other flips if I had the interest.