Convince Parents To Invest

[James DuBois]

Hey all,

I have been looking for the past 6 - 8 months at properties, reading books and listening to podcasts. I believe I am ready to buy my first investment property(Multifamily HouseHack). I am already pre-approved for a renovation loan. One problem, I am having trouble coming up with the down payment/closing costs. I've been focusing the money that I would be using for investing to pay off credit cards from school as I graduated 8 - 9 months ago and have been working as a Software Developer ever since. I can afford a mortgage no problem as I get paid well for my career. I cant afford the down payment/closing costs currently because I want to get out of credit card debt. But the way I see is I'm paying rent regardless, but wouldn't it be nice to have the chance to live for free?

My question is how can I convince my parents to pay for the downpayment and closing costs and i pay the monthly mortgage and manage the tenants? My dad is a businessman so he would need numbers to make sure it's a good investment. What kind of deal do you think I could come up with so its a win win? My loan, their downpayment and closing costs and then I would manage the property. In what way could I swing the deal to make it worth my parents time and money to help me out? And how could I swing the deal in the way to make my parents monthly payments to pay them back for the down payment/closing costs?

Thanks!

[Marc Winter]

I may be out of line here, but I think it's a HUGE mistake to get your folks involved in any deal, especially your FIRST.  To me, this is a business, and family and business don't mix well.  What happens if the transaction goes sideways?  Properties and money come and go; parents and families are (should be) forever.

Secondly, in my view, you are focusing on the wrong part of the program.  It's the DEAL you need to zone in on.  What about finding a killer deal, with TERMS from the seller?  

Your mostly conventional approach is limiting you.  Think about it--there is private lender financing (no friends or relatives) always available.  There are sellers who will hold financing.  If the deal is good enough, the money will find you.  That's what you should be concentrating on.  Get the GREAT deal, and the rest will fall right into place.

Good luck.