Buying a house from a parent or selling a house to your kids

[Will Dougherty]

Hi All, Working on my first deal and will actually be purchasing a house from my parents as they look to free up some cash and are ready to move on from it. We have been researching the best strategy to go about transfering it with the least amount of taxes and interest paid. They have some other bills that they intend to pay off with the money from the sale so I’ll be taking out a mortgage on the house. We are also working on seller financing for part of the cost to lessen the amount needed to hit 20% as we don’t think it makes sense to pay PMI here. basically thinking ill make monthly payments to them over the next 2 years. I am going to purchase the house for less than what it is going to appraise for so I’ll be able to refinance and pull out money this time next year to buy a primary residence (still living at home currently). My question is if there are any strategies or options here that would transfer the house with the minimum amount of taxes and interest being paid? If you were selling a property to one of your kids, how would you go about it? To give you an idea of the numbers.. see below..House sell price 130,000-140,000. 20% down payment. Should appraise for around 165,000-175,000. Currently rents for 1300/mo. Along with the down payment we are working on a monthly number (3-400/MO) over the next 2-3 years to pay to justify them basically giving me 25-30,000 in free equity to refinance out to out towards another property. Hopefully that made sense, thanks in advance for your time/feedback.