Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Is the property actually in really bad shape or is it just in bad shape for a sale? Can they continue living in it with minimal maintenance?
100k is not too bad. This is your father after all so if you totally trust him you could just have a contract stating that you would make mortgage payments for him in exchange for a percentage. I'm not an attorney and there are risks involved, but I say there are plenty of ways to get creative. The advantages are that this is your dad, it's a valuable asset, and you make enough money to cover payments on your own (if that last part is not true then I'd be a lot more hesitant)
Anyway, continue to consider your options. The article I shared wasn't necessarily the best article, I just found it and it gives some background into subject to. And in those cases it's strangers making the transaction.
the property is not fit for living for a normal person. But my uncle is making it work... truth is I have not been inside the house in 20 years, it was bad then. It looked ok from the outside when I drove by the other day. Just overgrown trees/lawn, but the neighborhood is not real fancy yet and the house has a large setback from the road unlike the neighbors, it has more privacy.
For all I know uncle has hired a maid and is living like a king, but I also hear there is no heat. I imagine it be much like a hoarding situation but I don't know for sure.
I believe he could continue to live there maintenance free (except for code violations) until he dies, and would in fact prefer it to being displaced.
One of my bigger fears is me or my dad getting into trouble with the law because of potentially multiple code violations.
Is the property actually in really bad shape or is it just in bad shape for a sale? Can they continue living in it with minimal maintenance?
100k is not too bad. This is your father after all so if you totally trust him you could just have a contract stating that you would make mortgage payments for him in exchange for a percentage. I'm not an attorney and there are risks involved, but I say there are plenty of ways to get creative. The advantages are that this is your dad, it's a valuable asset, and you make enough money to cover payments on your own (if that last part is not true then I'd be a lot more hesitant)
Anyway, continue to consider your options. The article I shared wasn't necessarily the best article, I just found it and it gives some background into subject to. And in those cases it's strangers making the transaction.
oh and yeah, I can afford the payments on top of my own living situation *except*
that really does play into where I decide to live even if just renting. I moved out of my expensive CA lease in Jan and had been living month-to-month rent in Las Vegas for MUCH cheaper in preparation to save up for a down payment, I wasn't sure where I was going to buy yet be it CA, LV or elsewhere.
If I want this Chicago property, it will affect my decision on where to live temporarily as I will have to figure in my rental cost wherever I am, luckily I am in a good position to figure that out right now as I'm not currently stuck in a lease or mortgage so I can adjust... .find a roommate, go somewhere else, etc.
Ideally, I don't really want to add a $1000 expense to my monthly living situation but there might be some ways to adjust before taking on the expense of this mortgage.
I also may offer to make my dad gradually increasing payments or half payments -- some assistance until I'm in a better situation to take it over completely, at least that is some help he doesn't have now. But that is another thing to tackle.
I was wanting to go back to CA but might stay in LV for tax purposes if I do take on the Chicago property.
My income is substantially higher in Las Vegas due to income taxes alone, for me the difference between living in CA and Vegas on a montly basis is almost enough to cover the mortgage payment!
When I look at that way, it seems not such a big deal ... I kind of prefer living in Vegas to SoCal anyway at times though I still consider Vegas pretty much an extension of CA I guess that is another subject
You're right about Novation. In REI people have been assuming loans (called "subject to") for decades now and until recently it was very rare for the lender to call the loan. I have never purchased "subject to" so I'm certainly not an expert, but it seems to me if there was a less risky time to do it would be in this case, since you're the son of the mortgage holder and you know your father won't sue you. There may also be a way to set up a trust (again I am not an expert) to avoid the due-on-sale clause altogether.
Anyway, whether this is a good idea financially or not depends on the current value of the property and the balance on the mortgage. We don't really know anything other than it being in poor condition and in a hot neighborhood.
Lastly, I would not buy in Vegas as an investment. From all that I've seen, buy-and-hold investors in Vegas have been shifting all of their equity into other markets. Flipping is still viable but not rentals. Good luck!!
just read the article, great stuff! answered a lot of my questions and "hunches"
almost makes me wonder if its better to do it and ask forgiveness rather than ask permission and get denied by the lender...
I'm about sure of that actually.... keep it informal while dad is alive and just make sure it goes to me when he dies or have me added while he is alive at least, we can figure all that out the good thing is it sounds like this still happens a lot -- that was my hunch -- that banks would rather continue to get payments than a foreclosure.
My dad and I have almost the same name, too I think that could help lol.
Another thing that is probably OK, but you need to be sure on, is how exactly is the house titled and is that title clear?
If there is any possibility that the uncle has in some way a claim on the title or part of it from way back when the house was inherited, or if the title transfer wasn't handled properly back then, then there could be problems.
Just because your father has a mortgage does not mean that the bank did a proper job of researching the title.
In some states, if he had any claim to the title and had been living rent-free for over a decade or so, then he now owns that house through a variant of adverse possession that is designed for cases of inherited property that wasn't transferred properly. I don't know about Ohio's laws.
I am not a lawyer.
First, you need to figure out the situation with you uncle. If your or your parents call the county and ask for a welfare check expressing concerns about his living situation not being safe, a danger to himself and all, you may well get a social worker helping him to apply for disability, move into a safer place, etc.
If the home has multiple code violations, it may not be habitable. In that case, the legal system will support you in moving your uncle to a safer place.
Your Dad and Mom need to figure out what they want to do. If they want to sell you the house for $100,000 or sell it outright or?
You need to sit down with an attorney and figure things out from there.
Not sure if this was mentioned but 'signing over' a house you would have the house at your fathers cost basis, which means when you go to sell it maybe a taxable event due to appreciation.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
