Buying my Parents House with 0$ down but having 20% equity

[Thomas Kennelly]

Hello Bigger Pockets! This is my first post so feel free to give me any and all advice!

My Wife and I currently have a 2 year old girl and another one due in May. Instead of paying for the apartment we had in the local downtown my parents offered us to move into their house (I grew up) and pay them the Mortgage and Taxes until we can buy it from them (max of five years were in year two). They moved to a new house in a better township and brought my siblings with them and my growing family gets to move into my childhood home.  

Here is the agreement;

1. I purchase the house for $315,000.00 and they get to refinance

2. I have to get all the inspections and COs completed - my Dad and I did alot of work to the interior that never was inspected. 

          a. Built into the Garage from the living room and kitchen

          b. Two car garage built in back yard

          c. In-Ground swimming pool installed 

-- I am trying to get the appraisal amount as high as I can so it'll allow concessions for Closing Costs and Gift of Equity as Down Payment and Equity in house after closing. 

-- House down the road same design but not updated went for 352,000 (Port Jefferson Station, NY)

So with the market where it is and mortgage rates getting lower I see it as an opportunity to jump on a low rate. What would be big ticket items you can suggest to bring the house to its full potential at appraisal? 

[Anthony Angotti]

Originally posted by @Nicole Heasley Beitenman:

Originally posted by @Jaysen Medhurst:

@Thomas Kennelly, unless the home is truly dilapidated very few renovations/updates make sense from a financial POV. I.e. you'll spend more doing the reno than you'll get in additional value. Kitchens and bathrooms usually deliver the best return at 80-100%.

If that's the case, how do flippers make any money?

They buy at a depressed value. It's not the renovations that make them money, it's the fact that they bought a good deal. Usually because of a motivated seller that just wants out or because the house is in such rough shape that there is a good spread.

Their ability to buy low for whatever reason makes them money.