I actually brought it up with my parents but not to benefit ME but to benefit my younger sister. she and her husband are teachers and make enough to afford a modest house payment, but not enough to qualify for a home in this market. they are renting right now.
i brought it up thinking that my parents could buy a house for THEM and then either “rent to own” or carry paper, or work out some arrangement where my sister and her husband pay my parents. my parents want to retire – and this would give them a vehicle to invest money in and get a monthly cash flow coming in. the big risk, however, would be if my sister or her husband lost their teaching jobs and could not afford to pay – then they’d have to kick them out.
i am in a house, and initially was thinking of this to benefit my sister. my parents are “thinking” about it. i honestly think they like the idea but are simply nervious about such a big investment that is not the “Norm”. they are conservative, and they may see it as too risky.
once I started thinking about it – I thought, if they would do it for sis – woudl they do it for me. i don’t NEED to move. yeah, i am a guy who bought in temecula a couple years ago and should have listened to all of you and NOT bought but i did. oh well. i like my house – it is nice, not as big as I would like for the long haul – but it is nice. if i am in my house for the next decade i am NOT going to be unhappy. but call me an opportunist, call me greedy – call it what you will -b ut if an opportunity came along to “upgrade” why not? so i thought, why not let my house go into foreclosure and take advantage of the fact that prices are so low.. i could just walk on my house and rent for a while. if my credit gets screwed b/d of a foreclosure i wouldn’t qualify for a new loan if/when I decided we hit bottom and wante to buy again…BUT if a relative was willing to buy the house who has cash – they could cut the loan to me and carry the note and i pay them. no real banks involved, mom and dad would just act like the bank.
the $500k figure is way high. i just tossed that out as a rond number. i’d probably look at stuff in the 300-400 range max. my current house is nice, i like it, and probably only worth $200-250 in THIS current market at best…
on the surface it sounded like a possible win-win – but not bieng a financial expert (hey i bought when i shoudl have sat out – so I am not an expert) I thought i’d ask some here who have essentially proven to be “in the know” and see what some of you thikn about the idea.
i really like a lot of the info I obtained. i hadn’t even really considred the whole long term health care costs, etc. i do know my parents have long term care insurance – but i don’t know the specifics of their policies.
another idea I threw out to them – and this also has a win-win angle to it that coudl help and have it’s own set of issues – i suggested they rent out their primary residence and move in with me – or in the alternative, we each move into another house together that is large enough to hold the bunch of us. i could dump my house and we could just rent a 4000 sq ft home and all live togther. my upside is having them in the house – i would have access to day car for my kidsd – NO not every day…but once a week or something – they are there and it woudl be much easier. upside – my kids get to spend a lot more quality time with gandma /grandpa. we are all very close and visit one a week or so – so living together might actually work – but with any co-living arrangment there are negatives to that. you can get annoyed with people you love once you live together…
big houses here in temecula that would house us all woudl easily rent for $3000? not that much. i could pay the bulk of it on my own – and they could move in and pay NO rent or only nomical costs. then they could pocket ALL the rent off their Scripps Ranch home – which is virtually paid off and worth about $600k – they coudl probably rent it for 2500-3000??? that woudl give them anice extra streamof income… but they woudl have to combine households…
if they did get sick or hurt – or were disabled, they would likely be able to live in the house longer – as they woudl have me, my wife, etc to assist them – unless they were so disabled htey required professional care…but as they age..and getinto their late 70s and 80s and assuming tey are inddependent, but just need minor “help” they would be in the same house and it would be easier to help them.
that was another idea i threw out as a way to help them retire earlier and cut costs. combine households… that would surely save money as they could rent their existing homeand profit off it.
back to my original idea – i hae another relative who is insanely wealthy. insanely. she is nto the kind of person to give money away and I would never ask her for money – she wouldn’t just “give” me a half million – but if I came up with a full blwon contract, and it was “legit” and there was some benefit to her – either that the interste she woudl earn would be equal to or better than her other investments and she was sufficiently protected from the obvious contingencies – she might just loan me the money. she has money coming out of the woodwork.. literally millions. that is alway san avenue..but it would need to be worke dout by an independent lawyer/third party so that it was above board, legit and very business like.
thanks again for the suggestions. my main goal is to help my parents. they have this money sitting in an account gaining no interest and they don’t know what to do iwth it. they are not financially sophisticated. they have thought about giving it to one of those investment firms where you basically give them your oney and they invest it and ge ta cut of the profits…but in this market – who knows if even the ‘experts” know WTF they are doing and there are no gaurantees..they could lose it all doing that..
which is why i thoght somethign like this would have the money in someting tangible. like a house. the only real worry is that what if we aren’t even at bottom yet and prices fall another 25% or 50%…. buying a house in Temecula now for $300k… coudl THAT house be $150k in another couple years? who knows..it could… then you’ve pissed away a lot of money…
