Using a 'gift' for a down payment

[Dan Desler]

Hi All

I am looking at getting started at investing in rental property this summer. I have only been in the USA for 4 years (emigrated from the UK), so I don't have too much capital or equity in my personal home, 401K or other investments  right now , but I want to find a way to get started in investing in real estate this year.

I have access to up to $70,000 from my family in the UK. My parents have liquid cash they'd be happy to give me to get started. I would eventually give this money back in 4-5 years, so it is not free money, or in real terms, a 'gift' . 

What I'm trying to get my head round is how I can use this cash for a down payment on an investment property.

My current outline of a plan is this:

1. Get the cash into my bank account
2. Let it season there for a couple months 
3. Use it for a down payment on a good cash flowing property
4. Find a deal that ensures the cash flows enough each year to eventually give back whatever I use in 4 years time
5. Give back the cash back in 4 years, after 4 years, the cash flow I am now making is mine to reinvest.

Now, the questions I have are:

• Am I right in thinking I would need to call this money a 'gift' and season it for a couple billing cycles? 
• Can a gift be used for an investment property? 
• Is there any issues if I eventually 'gift' this money back?
• Are there any other ways of doing this?

I hope this all makes sense. I am going to start talking to lenders, I know they are all different, but if anyone has been in a similar situation or has advice I'd greatly appreciate it!

Thanks!

Dan