"Banty" wrote in message
...
In article . com,
says...
Todd H. wrote:
Legbuh writes:
Hi all!
Here's the situation. My folks currently live up north (ND) in a
condo. They are close to retirement and have always wanted to move to
AZ. Well, they recently visited and found some properties they are
interested in.
Their condo is worth about 130k, and they owe about 20k on it. The
place they are making an offer on is about 160k.
They are asking me to help them with this, as a loan, to get between
the two. I told them they'd probably be better off getting a loan
from a bank, sell the condo, then pay off most of the loan.
Instead they want to loan money from me (100k or so) and then pay me
back when they sell the condo in ND.
They also have said they'd like to put the new place in AZ in mine
and
a brother's name so when they die there isn't a lot of headache. I
don't know if this is the best idea either.
So, for these two situations what options are there? I can afford
the
loan, but not sure if I want to put a large portion of my nest egg up
for this. Also, not sure about putting the new place in their kids'
(Snip)
I bought the house my father is living in now, and rent it to him. The rent
he pays covered the mortgage, and no probate concerns whatsoever. Paid it
off early, and now the rent goes into a slush fund account down there for
emergencies, either house-related or if he gets sick. Buy the place yourself
as an investment, charge them fair rent (equal to the mortgage plus
expenses), and have them put the proceeds from the condo is something
secure, to earn a few bucks interest. Added plus, they have a stash if
unexpected medical bills or something come up. Your risk exposure is low,
since land values in AZ are so strong, at least until the water runs out.
Cash is a lot easier to probate and divvy up than shared real estate. If you
can afford to loan 100k, you can afford 20% down of 160k as a long-term
low-risk investment. Their out of pocket costs are no higher, and presumably
the capital gains tax is irrelevant to them, since they were going to buy it
in your names anyway. And since they don't give you anything, no gift tax
issues.
I strongly agree with the others- don't put the place in multiple kids
names. Recipe for family squabbles that can outlive all of you.
aem sends...