What to do with Grandpas house?

[Juilo Ortiz]

Hello,

My grandpa has a home in which he still owes 130k and is worth about 200k as it stands and alot more with a little rehab. He has asked me to help him refinance the house to my name, as he is no longer able to due to terrible credit and a fixed income. He would also like to pull out 20k in cash to spend on traveling and visiting family. What do you think would be my best course of action? Should I refinance the house which I have been told would take a bit longer since I am not currently on the title or should I buy the home from him for 150k leaving him with his 20k he would like. Or are there any other ways to work this out? He and my mother (who is his caretaker) would continue living there, essentially being my tenants. I have just recently became really interested in real estate and would like to buy and rent out properties. No matter what happens with this situation. 

[Bill B.]

Assuming there’s been appreciation you definitely dont want to just add your name to the title s you’ll be taxed on any appreciation. (Appreciation that would be tax free to them as their primary.). So the refi is out. You can buy it, assuming you’re an only child and they want to give you you $50k. But again if you ever sell you’re going to be taxed not that money. 

As a random guy in the street I’d say you’re better off paying closer to market minus 10-20% (they’ll save the  6-10% in closing costs compared to selling to a stranger.) then they can pay you rent.