HELP! Awkward financing situation for a first timer.

[Ariel S.]

Hello out there!

I have been putting a plan in action to start investing in real property and I have reached a hump so I am reaching out for some advice. 

I have an opportunity to buy a home in Houston, TX where the owner (my mother) owes $60.000 on a home valued at $450k. My mother can't refinance and is out of options for dropping the payments down now that she is no longer working (she has been in the house for 25 years)...so we had an idea for me to buy the home and rent it out to her at a lower price. This would be mutually beneficial because 1) the monthly payments on the asset would be more affordable and will be kept in the family, eliminating the need to consider a reverse mortgage and 2) I would be able to pull equity out of it in order to invest in another income producing property and 3) would be a better option to avoid estate taxes etc. I am looking nonstop at properties and watching deals go by because I haven't been able to find financing. It has taken two weeks to coordinate with a family friend and I am sick of wasting time. 

The real issue is: is this idea even possible, and if it isn't how do I find a way to make it possible to use the property in Houston to secure cash or financing on another income producing property. The other issue is: are there any recommendations for knowledgable lenders, registered in Texas, that can help me work through the options and get me going quickly. 

Thanks for all recommendations, 

Ariel 

[Leland Barrow]

Just my advice but there are a lot of potential issues with your plan like doing business with family and the Elder investment fraud and Financial Exploitation regulations. You essentially are talking about relocating 390K of your mothers wealth to you, so that you can invest it for yourself. You would also become her landlord. These things typically start out with noble intentions and end up far from being noble. 

My suggestion is that she sell the house, and that you save up money until you have the means to invest.