Financing my son's first house purchase

[Jean-Marie Poth]

I am looking for advice on how to help my son get into his first house hack.  There is a two family unit that he can make payments on, but at 18 cannot get approved for a loan.  Has anyone done some creative financing that mutually benefits both parent and child?  How did you go about it?  He has talked of a rent to own from me, a possibility, although terms are vague.  Anyone done something like this? 

[JD Martin]

Main thing: be prepared to be the proud owner of a two-family unit with your son as one of the non-paying tenants. If you are prepared for that, and can financially cover the payments, then there are plenty of ways you can do this - a HELOC on your own house, buying it outright for cash and let him/tenant pay you directly, giving him credit for his/tenant's payments, finance it and have him cover the mortgage, then when he can get his own mortgage let him finance you out for the balance of the loan, etc.

There's no trick to helping him buy the place. The trick is whether or not you're comfortable owning/taking the place back if/when he cannot make payments. If you're not prepared to evict him, then you must be prepared to buy a house for your son to live in until you figure out alternate arrangements - such as selling to someone else and letting them evict him, and you would not be the first person to go down that road. I personally know LLs who sold property with one of their progeny as a holdover non-paying tenant, so that they could be out from under the payment and not responsible for evicting their own kid.