Dad might give my wife and I his 3 flat to collect on and maintain but still wants to be able to borrow against it.

Background:

My wife (25F) and I (27M) live in an apartment in the suburbs of a major Midwestern city. My father purchased a three flat in 2010 and had it fully renovated in 2015. The building is worth approximately $600,000 now. He recently had a long time tenant move out, who he was actually under charging but fair market value of rent is approximately $2000/mo. The other two units collect $1900/mo and $1100/mo respectively. My dad plans to snow bird down in Florida after he retires and would like someone to keep up with the maintenance. He planned to use the 3 flat to borrow against for a mortgage down in Florida because he has Covid level low interest rates.

The deal:

He originally told my wife and I that we could take over the 3 flat and collect rent but would be responsible for property taxes (approx $1000/mo) and maintenance/upkeep + giving him $2000/month. He is in the process of establishing an LLC for the 3 flat and putting it in a trust. We sat down and once we got to talking about numbers he started to change his mind and told us $1000/mo reduced rent for us and just keep the 3 flat in his name for the tax benefits (depreciation deductions) and ability to borrow against it for the Florida property. Is there a way that we would be able to meet in the middle for all of this that would still allow him to borrow against it and we could move incollect on it? He basically boiled it down to the fact that he can’t effectively quantify the tax benefits that he gets otherwise he would pass it down to us.

TLDR: how do we manage a 3 flat while also allowing my dad to keep his tax benefits on it?

submitted by /u/Flanyo
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source https://www.reddit.com/r/RealEstate/comments/1skh7vy/dad_might_give_my_wife_and_i_his_3_flat_to/