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Updated over 4 years ago, 08/01/2020
Helping 15 year daughter buy first house. Wife’s not a fan
Today we entered into a contract to buy a 3 bed 2 bath House in Kansas City Mo for $145k.
The house will rent for $1500 to $1700 per month.
I'm teaching my daughter how to create a monthly budget and will set up a separate checking account via a LLC to handle the cash flow. She will be responsible for maintenance and paying all the bills.
She will need to learn how to make a punch list of things to fix and find contractors out of state. We close in 30 days so it’s going to be a crash course.
My question is how do you handle a wife that does not like real estate? The wife thinks she’s to young and does not need the stress.
Btw I have purchased over 95 multi-family units in the last 30 months along with a 80 pad mobile home park last week....
The easiest way I know how to do this is to just create an LLC with the parent and the child together on the LLC. Then, according to the operating agreement, just have the adult have authorization to sign on behalf of the LLC. That's how I do it with my kids and it is pretty easy. Then, if you don't already have your 10 federally backed loans, quit claim deed the property into the adults name, get a loan for the property, and then quit claim deed the property back into the name of the LLC after the loan is finished for more asset protection and tax filing purposes.
Steve Morris he will have the same minor issues when he goes to sell. Many states will allow a minor to rewind the sell.
Additionally some won't allow a minor to sell without a court agreeing it's in the best interest of the minor and that the money is held for the minor. I've been there and would not go that way again. And I was selling a timeshare so anyone could agree it's not in a minor's interest to own that!
Plus just how a deed is written to buy or sell real estate is very different when a minor is involved. Our timeshare was recorded as xxx, a minor child, just to call out that situation.
Imagine 10 years after selling a property rewinding the sale and getting it back for the price it was sold...
@Jason Graves thanks for the advice. Right now their money is in CDs. I know literally nothing about the stock market, admittedly, since my parents put it down constantly as a kid. Never even occurred to me to try to mess with it. I have several properties and know way more about buying rentals than I do about stocks, so for me, it’s the “safe” way to go for them. If they truly aren’t interested by that age, I won’t force it, but always think about where I would be had my parents taken the time to learn about real estate investing. I would have loved that as a kid! (I sold things to my brothers at a young age to make money. I was always coming up with ideas). Anyway, always fun to hear other’s advice and take it into consideration. 👌
@Jason Graves
Closed $140 k! Thx for all the support.
How do you add pics to BP?
🤗
@Katy Frey
It’s never to late for stocks.I suggest a RobinHood.com account . Start w $100 and buy something you use like ATT which pays a 5% dividend. that’s use extra $ you get back energy 3 months.
Robin Hood is for beginners.
@Brian Gerlach
Her trust paid cash for $140k. Adding $10 in light rehab for basement kitchen, bathroom
She’s now doing a cash out refi to 75 after rehab value.
Will pull out $130k and ha e $20 left in deal.
She’s got $3k of her own $ in the deal and will pay for fix it stiff. First cash flow pays.
her $3k and I’m not worried about my $20k I will start getting paid down in year 2
Originally posted by @Jason Graves:
@Brian Gerlach
Her trust paid cash for $140k. Adding $10 in light rehab for basement kitchen, bathroom
She’s now doing a cash out refi to 75 after rehab value.
Will pull out $130k and ha e $20 left in deal.
She’s got $3k of her own $ in the deal and will pay for fix it stiff. First cash flow pays.
her $3k and I’m not worried about my $20k I will start getting paid down in year 2
Why keep your $30k in it? If you are teaching her about finances she either should have a loan agreement with you and interest paid, or pay you off with the refi and keep some of her trust money in the deal. She needs to learn that money it not free.
@Jason Graves click the little icon below that looks like a couple of little mountains and a sun or moon.
Then click inside the big box that appears.
Then either chose a photo from library or take a picture if you are on your phone. Or just drag and drop if your on your computer.
And that’s how you do it.
I would sell of your possessions, and your house. Trade in your car, and get a 1990 dodge caravan, and throw a mattress in the back. Live there for a month or 2, and, I GUARANTEE your wife will learn to love real estate....
If your daughter is into it then I think it’s great! I have two sons who have helped me with rehabs since they were 11 years old. I have two apartment complexes now which they have put in their share of sweat equity. Last year I allowed them to come in as a passive investor on one of my deals. They get quarterly distributions and will get proceeds upon sale. But I gave them 2 conditions before they could invest, 1) save $1000, 2) allow me to teach them how the business plan works. Success on both! They are 17 now and it’s been a great learning experience thus far.
@Alex Olson You are an awesome dad. You are providing your daughter with skills and knowledge to be financially independent and successful. The best part is that you have her undivided attention.
I would love to here an update after a few months.