Need HELP. Does this purchase make sense?

[Ryan St Pierre]

A family member of mine make some bad financial decisions several years ago and tried to keep it quiet by borrowing money at terrible interest rates from quick loan companies. They have a single family home that needs some fixing up. 

I was thinking that if I could get a good deal (which I'm sure I could given the circumstances) that it may be mutually beneficial for me to buy the home. They could wipe their debt clear and immediately begin renting from me. They have 2 older children living at home. My idea is to hold and rent until the kids move out (approx. 5 years) fix it up and increase rent. At that time hopefully they will be back on their feet and either purchase another home or pay the increased rent. Dealing with family scares me a bit but not too much as I would be up front about the plan.

Does this sound like a good investment? Also I have 2 options, I could refi my house to pay for it or try to get a second mortgage. I was leaning this way as I understand that I can write off the interest on a rental. Also after fixing up the place I could try to refi the rental and use that money to pay off my primary residence. Numbers are irrelevant for now as I will crunch those if I decide it is a good idea. 

Any suggestions would be greatly appreciated. Thanks in advance.

[Nathan Gesner]

Nobody can answer your question because you don't provide any information. Could it be a good investment? Sure! Could it be a bad investment? Sure! Could it be the biggest mistake of your life? Sure!

The only information you've provided is that you would apparently buy it cheap and then rent it out to your relatives. That is probably a bad idea. They are not good people financially. If they can't pay the mortgage and make dumb choices like high-interest loans, what makes you think they'll do better with you as the Landlord? There is a very good chance they will walk all over you and cost you money.

Buy cheap to get a good deal? Sure, if the numbers work. Rent to the family members that caused the problem in the first place? Not a chance.