Purchasing property from relatives

[Evan Haslund]

I have the opportunity to purchase a relatives home because they'll be moving into an assisted living community later this year. I just purchased my 3rd home in February and I'm about to rent out my second home.

My strategy so far has been to occupy the residence, then move out after a year or two and rent it out. I'm at the point where I don't want to move out of my new home for several years (mostly it's my wife begging to stay in one place for more than a year or two, I don't blame her lol). The new house was purchased for 77.5k with a down payment of $7750,and it appraised for 106k.

I'm thinking of possibly seeing if my relative is interested in seller financing, they've owned the home for 10 years and purchased it for 62.5k. I'm really early in the stages of this, so I don't know exactly how much equity they have in it yet, but let's say they have 20k in it. Would it be smart to try and get a line of credit from my current house since it appraised for a lot more? I could pay them the amount of equity they have in it, have them hold the note, and refi into a mortgage in a couple years. Does anyone have any thoughts?