Should I even bother?

[Genenco]

OK, here's the details:

Bad credit (529 Fico)

All debts ($38,000) 60 or more behind.

Parent has home about $88-$100K value

She quit claims to me, I take it and get $40K loan to payoff loans.

In June, take out major loan ($70K) to pay Parent for the house. (She's willing to take as little as $65K)

House does need some work..>Maybe $5K would fix all major/minor probs...$20K would make it showcase.

I'm looking at a "No seasoning loan" I am expecting 9% rate.

OK, is this feasible and how long would it take?

I make $24K a year...Second job coming soon..Would go up to $30-$35K next year.

Now, should I seek lender, or mental health prefessional? :tongue:

[mike_mn]

Sounds like a tough situation.

You sound like a new or want to be an investor?

Family dealings are always a tough thing. Expectations run beyond the scope of what you say and what you may or may not contract to do.

If it were me, as much as I would dislike doing it, I would probably bring in another investor to take care of it. Unless you are willing to potentially cause irrepairible damage to your relationship with your mother, I would stay away from this.

With that said, if you do do this, I am not sure I understand your logic. If you are planning to get a mortgage, why not just go get a mortgage and purchase the place from her? I don't understand the reasoning for getting a 40k loan then another loan to pay off your mother?

Once she quit claims the property, you own it...why pay her again later? If you can get a loan for 40k to buy the place, you can get a loan for 65k. You can even use a gift of equity as a down payment. i.e. make the purchase price, 80k and then get an 80% loan for 64k to pay off your mother and her debts. You get the 20% down as a gift of equity from mom. The more complicated you make it the more possibilities for problems arise, especially since this is your mother.

Will she still live there after you buy it? Will she pay you rent? What are her future plans? What is the overall exit plan? Answer these quesitons before stepping forward.

Good Luck, none of us wishes to be in your shoes...

[Genenco]

Sounds like a tough situation.

You sound like a new or want to be an investor?...

Oh no..It's just I'd hate to have her lose money in the place after she's paid enough for it.


Family dealings are always a tough thing. Expectations run beyond the scope of what you say and what you may or may not contract to do.

If it were me, as much as I would dislike doing it, I would probably bring in another investor to take care of it. Unless you are willing to potentially cause irrepairible damage to your relationship with your mother, I would stay away from this....

I can fully understand that...Dealing with family can be VERY touchy. (As I have found out)


With that said, if you do do this, I am not sure I understand your logic. If you are planning to get a mortgage, why not just go get a mortgage and purchase the place from her? I don't understand the reasoning for getting a 40k loan then another loan to pay off your mother?...

The reason is, I have a 529 fico. If I clear all debts and keep just paying loan with little "Additional" debt, by June, I should be in mid-600 range. Better rate and terms for a refi.


Once she quit claims the property, you own it...why pay her again later? If you can get a loan for 40k to buy the place, you can get a loan for 65k. You can even use a gift of equity as a down payment. i.e. make the purchase price, 80k and then get an 80% loan for 64k to pay off your mother and her debts. You get the 20% down as a gift of equity from mom. The more complicated you make it the more possibilities for problems arise, especially since this is your mother....

Well, there's 2 thoughts. If I go 40K, that's only basic. If I go $65K Then major remodel (Roof, bathroom, kitchen) is redone in a decent fashion. But again, pay off bills, wait and get better terms. Then Mom gets her 70K and then she can head for the retirement home.


Will she still live there after you buy it? Will she pay you rent? What are her future plans? What is the overall exit plan? Answer these quesitons before stepping forward. ...

Yes/No, She's only here for another 6 months/To move into a retirement home/Keeping the house in the family and not letting it go for a song.


Good Luck, none of us wishes to be in your shoes...

Yeah, I wear size 12 and it feels like a 9.5 :pukeface:

[mike_mn]

Does your mom have good credit? If so, have her refinance and take cash out. Then just buy on a contract for deed from her. After your credit gets better, refinance. Be careful, the lender has the right to call the loan to be paid in full.

Good Luck

[Genenco]

Does your mom have good credit? If so, have her refinance and take cash out. Then just buy on a contract for deed from her. After your credit gets better, refinance. Be careful, the lender has the right to call the loan to be paid in full.

Good Luck


Not that I'm going to go that way, but as I said I have a 529 score...How long should I wait? 6? 12? 24? months?

I'd just hate to have a "Burp" come along destroy the whole thing
:SM026: