Dad wants to sell me his house below market

[Alec A.]

Hello, I'm new and hoping to get some advice on purchasing my parent's home to become my primary residence after renovation and then building them a in-law suite. I'm looking for creative financial structuring ideas. If this is better posted in a different forum please let me know. Thanks

My parents own and occupy a water front property home in Florida. The value of the property is approximately $1.2M. my parents are nearing retirement age and wish to keep this property in our family rather than sell.

They have approximately $500K in debt on the property and I believe that is the minimum they would "sell" to me for to be free and clear. The home itself is in need of extensive renovation and being that it is single story, built in 1953, and water front, I'd like to build a second story for fear of flooding.

One person's suggestion was for me to have my parent's deed their house to me. I would refinance. Then, depending on the lender's seasoning requirements, I could take out a HELOC or home loan against my newfound equity to finance the home's renovation and the in-law suite construction. My parent's would have to file a gift declaration for 709 with the IRS.

Any other input is appreciated.