The Conservative Cave
Current Events => The DUmpster => Topic started by: franksolich on May 17, 2012, 08:24:53 PM
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http://www.democraticunderground.com/1121121
Oh my.
Lindakimy (15 posts) Profile Journal Send DU Mail Ignore
Real estate and family
I have a question and would like to get some input before making a decision. My older brother and his wife are retired, both accountants for the state where they lived, with pensions and social security. They bought a new house a few years ago and are now underwater. I am the "poor" one in the family but I do own my (far less desirable) house free and clear and have a very good credit rating because I have been careful to live well within my means for many years.
My brother is at the point, given that his house can't be refinanced at a reasonable rate and has many, many serious problems - it's basically a lemon - that he is ready to walk away. However he lives in a state where that is more difficult. He doesn't want to jump into an even worse situation but he is edging over into desperation.
Lately my husband and I have talked about buying a property to rent out as an investment. Places are very inexpensive where we live with prices down and we could make more than we do with bank CDs and such. I shrank back from that (careful as I am) because it's fine if you have a renter but you have to come up with the payment if you don't. That scares me.
Last weekend when my brother was visiting we talked about this and he said he would be delighted to pay a high rent if he just didn't have to worry any more about the place he has now and how it is tipping. We chatted a bit and looked up a few properties and they are considerably less expensive here that where he lives. I think he is seriously interested. We would love to have him and his wife nearby because we all get along very well and enjoy time together.
My question is whether this is a good thing. If my husband and I bought a place and rented it to my brother (whom I trust completely) for enough to pay us back for the down payment with interest within a few years and then dropped his rent to the amount due to the bank plus taxes and insurance but kept the property in our name with the provision that we would will it to him in case of our death...would that be a sound investment?
It seems to me that it would help us (higher interest rate) and him (lower monthly cost and no more worry about the failing house he bought). Am I telling myself a story here?
Any thoughts? I am certainly not an expert on either finance or real estate. I would just like to get a bit more from my savings and also help my brother through a hard time.
The attorney primitive:
elleng (30,749 posts) Profile Journal Send DU Mail Ignore
1. Sounds interesting, but I have no real advice except cross-post in 'Economy?'
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Lindakimy
My question is whether this is a good thing. If my husband and I bought a place and rented it to my brother (whom I trust completely)
Mistake #1
for enough to pay us back for the down payment with interest within a few years and then dropped his rent to the amount due to the bank plus taxes and insurance but kept the property in our name with the provision that we would will it to him in case of our death...would that be a sound investment?
So basically he's making the house payment with taxes and insurance but you'll own the house. OK, so what happens when the house needs repairs, etc... You got the pockets to cover these expenses?
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So, DUmmy, you're going to invest your life savings in a property, and then depend on rental income from a deadbeat who's walking out on a previous financial obligation?
Sounds okay to me.
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They should read the book "RealEstate for DUmmies".
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Why is anything related to private real estate transactions between family members, taxed at all.
Taxes have already been paid.
Why in the bloody damn hell do I, or my kids have to pay more taxes for something I already own?
I've seen the "death tax" in action, and it damn near cost a friend his parents property.
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Why is anything related to private real estate transactions between family members, taxed at all.
Taxes have already been paid.
Why in the bloody damn hell do I, or my kids have to pay more taxes for something I already own?
I've seen the "death tax" in action, and it damn near cost a friend his parents property.
Because, there's no such thing as double taxation, according to libs.
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They should read the book "RealEstate for DUmmies".
I like the chapter "How I Turned A Million In Real Estate Into $25 In Cash."
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I like the chapter "How I Turned A Million In Real Estate Into $25 In Cash."
Good one.
Awesome.
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Good one.
Awesome.
I get half credit !
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I get half credit !
I'll drink the first half of that cold beer, you can have the other part. :-)
I'm doing the rightous thing and sharing. :whistling:
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I'll drink the first half of that cold beer, you can have the other part. :-)
I'm doing the rightous thing and sharing. :whistling:
As long as it's at the next available OWS rally. I'm in the mood for some LOOTING !
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As long as it's at the next available OWS rally. I'm in the mood for some LOOTING !
You da man! :cheersmate:
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So, DUmmy, you're going to invest your life savings in a property, and then depend on rental income from a deadbeat who's walking out on a previous financial obligation?
Sounds okay to me.
never trust family unless you are willing to walk away from deal with no hard feelings
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Sounds like a contract for deed situation. If structured right the dummy could use the rental property as a offset to regular income thereby lowering his tax obligation.
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If my husband and I bought a place and rented it to my brother (whom I trust completely) for enough to pay us back for the down payment with interest within a few years and then dropped his rent to the amount due to the bank plus taxes and insurance but kept the property in our name with the provision that we would will it to him in case of our death...would that be a sound investment?
How is that an investment at all?!? Counting the time value of money and maintenance, you're not even breaking even on it, and your bro is getting a house out of the deal.
No wonder Democrats can't understand why Obama's fiscal policy is insane.
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Sounds like a contract for deed situation. If structured right the dummy could use the rental property as a offset to regular income thereby lowering his tax obligation.
Sounds like a situation where you shouldn't be looking to the DUmp for solid advice. Same with "what should I do about the voices in my head?"
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They bought a new house a few years ago and are now underwater.
given that his house can't be refinanced at a reasonable rate and has many, many serious problems - it's basically a lemon - that he is ready to walk away
Did they not care for their house? I mean, really. That's just sad.
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As long as it's at the next available OWS rally. I'm in the mood for some LOOTING !
I could use a good small 20-24" lcd tv ~ but no off brands. :whistling:
ETA:
In the book of Real Estate for Dummies how many chapters do they devote to things which can and will go wrong renting to friends and relatives. I can definitely add a few pages. Friends don't let friends rent to friends or relatives. Never, ever, ever. I think that is a corollary to never loan money to a friend, relative, or strange that you want to ever see again.