Paid off home, rentals and personal residence

[Mischa Talokonnikoff]

Hi BP,

Hopefully you can guide with the next steps, this is what I have going on.

- I Own a home in south Florida (fort Myers) that is paid off. My mother lives in this house, and will for the rest of her life. The value is 250-300k.

- I would like to purchase a place for myself and fiancé in tampa

- I would also like to start a rental/buy and hold portfolio

- I’m interested in knowing if these personal properties should go into business names so that I can write off business losses at my moms place(she will never pay me rent), so I’m just covering expenses).

It’s obvious that I have a lot of cash that is sitting idle. I can’t sell the house because my mother needs a place to stay. But, having that cash liquid would be huge. So, what to do?

Do I home equity or heloc her house? If I move it into a business name, will banks still give me a loan against the property? Is it worth putting in a biz/does it matter? Do I take out 200k on it and use it for multiple down payments? If so, do I put those in new properties (one for myself/one rental) in LLCs? Would I even get financing or should I just do one for now and pay cash to avoid second financing?

Thank you for your guidance. Trying to be thoughtful on my first move.

[Steve Hall]

@Mischa Talokonnikoff We need a lot more information here to give you any kind of useful advice.

Why won't your mom pay rent? 

How old is your mom? (65 vs 95 makes a big difference in strategy)

Why are you tying up $300k in a home for your mom? If my mom wasn't going to pay rent, I'd put her in a $100k condo or townhome, or more likely a mobile home park.

Why is your mom's house not in an LLC or in her name? If she gets sued, you and your fiance could lose your home, and if you get sued, the creditors could take your mom's home! Also, if your mom's house was in her name, she could claim homestead, saving taxes.

How much do you have liquid without the HELOCs?

And the most important question... what does you fiancé think?