Should I Buy My Mom's House?

[Mitchel Gendelman]

Hi BP Community,

My mom wants to sell her house, and it is a pretty sought after town in my area (Blue Bell, PA). I am 23, live elsewhere and rent-free, and am looking to get started with REI, but by house hacking in Philadelphia (that's for another post another time!). However, I feel like there might be a way for me to create value for both me and my mom in this situation.

A little background: I don't have a ton of capital to put towards her house without deterring my goal to purchase a 2-3 unit property in Philly. For loan purposes, I have a full-time, salaried job with a solid income. My mom hasn't listed her house yet or signed with an agent. She would be interested in selling to me, though likely not via seller financing. She is looking to purchase another house that is slightly more expensive but in a townhouse community to benefit from lesser maintenance. She has a pretty solid chunk of equity in the house, somewhere around 250k. Her house is a single-family home, 5 bed 2.5 baths in a nice neighborhood. It would need minor tweaks to spruce it up, like landscaping, new appliances, and new carpet or flooring in some rooms. Roughly 15k worth of work to get it in top-notch shape.

Some numbers: Sale comps in her neighborhood are anywhere from 375-390k. Rental comps say 2500 per month would be pretty easy for this house, which is probably low relative to the cost of the house (1% rule).

I'm just looking for some general thoughts into this situation. Perhaps the answer might be to just help her sell the house as usual, but wondering if there are any other options that we could both benefit from. Maybe wholesaling? Putting together a deal and partnering on this as a long term investment with her or someone? As mentioned, I don't have much experience (yet!), but would love to hear some ideas from those that do! Thanks so much in advance!

Mitchel Gendelman