I posted a few months ago about a deal my father and I were trying to set up. He flipped a house that he owns free and clear - no mortgage. He'd like to add me to the title, take out a HELOC under my name, and then I would rent the house to pay off the HELOC and buy it out from him over time. He thinks this will not be an issue because he set up a HELOC with his long-term girlfriend of 15 yrs. on their primary residence after adding her to the title, and it was a very smooth process. I keep trying to tell him that the fact that I am a blood relative could change the process; I don't know if the government would see this as him gifting me the house.
I want to do some research, but he wants to jump in on this ASAP. I'm VERY eager to get a second house under my belt, and I think this has potential as the house rented out very well under the previous owner. At the same time, I'm nervous. I'm not getting much out of my research. Most articles covering this topic regard parents who are trying to give their child a house, and that's not what's happening here. Any advice? TIA!
Unless there are some unfavorable conditions like you need to renovate a shack out of your wallet. Few people except you would hesitate NOt to accept it. The HELOC amount should be =
@Nicole Heasley pretty cool your father is willing to work this with you. I am posting to give this a bump as I am curious about the proper answer. Hopefully an accountant can chime in with a correct answer.
Congrats on looking into REI investing and especially for working with and helping your family! I would just go through the process personally and learn as you go. You seem very intelligent and are just stuck with analysis paralysis. I'm the exact same way and always want to see the entire staircase before I walk up, and have had to learn the hard way that sometimes I need to take the first step and just keep going while only being able to see one stair at a time. I'm more than confident that with you and your Dad working together, ya'll can accomplish your goal, and it will probably be much easier than you believe. I would be very interested to hear what others have to say! I do believe you are overthinking this but I may be wrong I'm no expert. Good luck and don't let that fear or all the "what ifs" hold you back!
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