Seeking Advise on creative loan structure

[Kyle Fronckowiak]

Hi everyone!

My wife and I have an opportunity to purchase a property in South Lake Tahoe from her father. Over the past 10 years, he and his late wife poured their hearts into building this home (with permits, of course). Sadly, we lost my mother-in-law to cancer two years ago, and my father-in-law has since realized he no longer wants to live there, though he remains emotionally attached.

The home is in its final stages of construction, needing only finish work and a kitchen remodel to be rentable. He has already mentioned that he is willing to act as the bank, interest-free, which is a great opportunity. Without involving a traditional lender, what kind of deal structures should we consider? I’d love any insights on next steps. Thanks in advance!

Kyle

[Bradley Buxton]

@Kyle Fronckowiak

What would make sense for your father in-law? What is his situation? Do you have a down payment? If so that will give you equity and some ownership stake? Does he want monthly payments or a balloon payment? Does he want to use the house? Who will be on title? Is there a trust?  As others have said have a lawyer draft up the agreement.

Check your local regulations if you plan to rent out the house. The City of South Lake Tahoe does not allow short term rentals. Depending on where your place is there are parts of the county near SLT that do allow them. They are some incentive programs to rent it long term if that is your goal.