Refinancing a gifted home to rent out

[Zachary Ulven]

My father was looking to sell his old house (Aurora IL) and be done with it. My suggestion was to gift it to me and let me refinance to pay him (keeping loss for closing costs down). What are your thoughts? Are there any problems with this plan I have not thought of? I know the house will appraise for 180k and I am looking to pay him 150k. Additionally comparable rentals in that area are 1600-1800/month.

[Andy Rousch]

Has he lived there two out of the last five years? might be smart to buy it and have hi hold the mortgage rather than gift it so you wont have to pay taxes down the line on capital gains from 0 dollars to whatever it is worth in the future. Only if he's lived in it of course. anyway, looks like it hits the one percent rule!