Advice for in-laws home?

[Jorge Vazquez]

Hey, i need some advice on a current situation.

My in laws were selling their house about 2 years ago for about 250k but took it off the market due to my wife's step dad being diagnosed with Amyloidosis. They're getting ready put it up on the market again soon but told us if we wanted it we could take it for 230k, which will break them even. Im pretty sure theyll be asking for at least 260k now on the market. There are a few and minor things that needs repairs since they maintained the house pretty well(second family to own it), just needs some upgrades.

Her step father came up with the idea of us buying it from them and they'll be renting it from us till they decide they're ready to move back to Delaware or downgrade to an apartment, that way we get some income on the side and also help our credit score.

We're a starting out family, so my wife, daughter, and I live in my parents basement. My wife recently graduated from her school and is now waiting on her license to get a job and my current job/income isn't that great.

I'm not very optimistic about my wifes step father living until next year, giving us enough time to save for a down payment though. 

I feel like this could have some potential, but since I'm new to RE investing, I don't have enough knowledge to fully take advantage of the home. I thought about house hacking it for a year or two til I'm able to do the upgrades necessary, then having it as a rental property.

What do you guys suggest? 

[Chris Mason]

Hi @Jorge Vazquez,

Your job is to find a local mortgage gal or guy that knows a particular niche guideline, and that keeps up on the latest guideline changes! 

I will tell you the two bullet points that will comprise your lender shopping list:

• "Children wanting to provide housing for parents." As soon as you find someone local to you that can speak intelligently on the subject, boom your interest rate just dropped to a primary residence interest rate (assuming you + wife income qualifies you without needing to count rental income). That's going to trump whatever other rate shopping you might be inclined to do. "Primary residence interest rate on a property I'm not going to be living in, without committing fraud" is perpetually the mortgage dream of REI, you actually get to get that deal because you're doing the right thing and taking care of your wife's folks.
• Fannie Mae removal of the "Continuity of Obligation" requirement a few months back. As soon as you find someone local to you that can speak intelligently on the subject, boom now you have rate/term refinance closing costs instead of purchase closing costs (I do not know anything about Georgia property/transfer taxes, so those components may still be there, IDK). This is going to be better than the old trick, which was to structure it as a purchase with a gift of equity. 

There you go. Find someone that can speak intelligently on both of those subjects. That's going to get you a killer slam dunk best deal possible on the mortgage side of things.