Buying properties from family.. Pros/Cons..

[Peter Tomeczko]

Hello everyone..

New pro member & my first post/question.. Woo.. 🤘

My parents are retired and looking to off load their rental properties. They are tired of self managing the properties.

Any suggestions, pros / cons when it comes to..

seller financing?

Buying from family? 😬

I’m proposing a no money down, no interest,15 year mortgage. The house is currently rented month to month but current tenant has been there for 5+ years.

If I can keep conventional banks out of this deal, I can buy another rental in the next couple months. 🤞🏻

Thank you and I look forward to connecting with you all.

Peter T

Chicago, IL

[Michael Albaum]

@Peter Tomeczko Mark brings up some great points!

I’ve both bought and sold real estate to and from family and it’s been great! You just have to ensure everyone is on the same page with regards to expectations. I’d also be sure to write everything down! Even though it’s family, treat it like a traditional business deal...draft and sign a promissory note, record the note as their having the 1st deed to the property so that they can be named as loss payee on the insurance policy, just in case.

Also, something to think about on both ends, buying and selling to family, you should pass the commissions that you would be paying to an agent along to any family member who is buying rom you, or vice versa...automatic 6% discount, as that money would have gone out the door anyhow.

Best of luck!

Michael