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[MD] Unique Buying Situation: Purchasing Home for More Than Worth to Renovate.

Tl;dr: Parents owe money on house. House not worth quite as much as they owe. I want to buy it for more than they owe, so they can fix it up and sell for trending market value. Is this legal, what's the best way, and have you heard of this before?

I'm going to use simplistic numbers for ease of math and to remain slightly anonymous.

My parents owe $150,000 on their mortgage and they wish to sell their house now because the market is pretty high in our area and my father is ready to retire.

The problem is, they have not taken great care of the house and it needs some MAJOR renovations, and their credit is terrible.

I've been racking my brain about how we can make this work an I had an idea of buying the house from them for $185,000, then taking the profit to invest $35,000 into renovating the house. Then I would sell it myself for how much houses go for in this neighborhood, with this configuration, ($215,000) and giving them the profit made from the house to kick start their retirement out of state.

I've been researching different types of loans, but the Google search for what I'm trying to do is a long one.

Of course the best case scenario is that someone else just buys the house for $185,000 and I could skip this whole process, but the shape that it is in, I don't think that would happen.

I want to make sure what I'm doing is completely legal and I won't run into any pitfalls.

I want to know what would be the best way to do this (traditional mortgage?)

And, if you have ever heard of this before and if there is a term for it I can do further research.

Note: when I say major repairs I mean a new roof, new HVAC, new floors, new hot water heater, lots of drywall and cosmetic things. I plan on having an inspector assess the whole house, as well.

This is 3bd, 1ba, rambler style home in the DC metro area.

submitted by /u/Schenectadye
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/dblb8y/md_unique_buying_situation_purchasing_home_for/
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