Skip to main content

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
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/1skh7vy/dad_might_give_my_wife_and_i_his_3_flat_to/
Labels:

Comments

Post a Comment

Popular posts from this blog

North Carolina – “One to Buy; Two to Sell”

I realize I will likely have to contact a real estate attorney but also hoping to hear insights and experiences from others! I have a house in NC that I bought by myself in 2009, and paid off, in full, in 2022. I got married in 2023. My spouse and I have not lived in the house as our "marital residence". We have maintained separate residences even after we got married. (That a separate topic!). I am now selling this house. Realtors have told us that my husband has to sign the deed at time of transfer but I am not convinced since the house has not been our marital residence. The realtors like to use the phrase "one to buy; two to sell", which seems like a broad-stroke statement which is not applicable under all circumstances. And of course, the realtors don’t realize the details of my specific circumstances: I purchased and paid for the house in full prior to marriage Only my name is on the deed And most importantly, we have never lived in the house as a marit...
Post a Comment
Read more

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

Co-signing as non-primary resident - effect on size of required downpayment & first time home buyer status?

Contemplating co-signing on a house with my mom and splitting the mortgage payment. I currently have a significantly higher income and much better credit than her. I'm looking at potential home costs and related downpayments but have difficulty using some of the online estimators. From my perspective, this would be somewhat of an investment purchase (I intend to stay in my current location in a different state and contribute to the mortgage), however, for my mom, this would be a primary residence. For purposes of the downpayment size and the type of mortgage arrangement, would it be an investment property or a primary residence? Many thanks for any help. submitted by /u/piercalicious [link] [comments] source https://www.reddit.com/r/RealEstate/comments/km4hvl/cosigning_as_nonprimary_resident_effect_on_size/
Post a Comment
Read more