Alternative College Savings Strategy

[Jason Pearson]

What am I missing? After significant research regarding college savings for our son, my wife and I have devised a strategy which we would love the community to pick a part. We are not happy with 529’s, Coverdell’s, and Custodial Accounts for this purpose.

We will save $500 per month in a joint account until our son is about 5 years old. Those funds will be used as a down payment on a SFR rental around $100K. The property will be held in a Limited Partnership with our LLC as General Partner and 1% ownership as LP to our son.

We will continue the contributions which will be coupled with the rent to pay down the mortgage before he graduates high school.

If he decides to go to college the cash flow will be used to offset costs of college in addition to scholarships, grants, etc.

If he does not go to college but meets other metrics (military service, marriage, starting his own business) we will gift him ownership.

If he is not on the correct path the property can be something for him to work for without giving him an asset he didn’t earn

We are open to questions, comments, and concerns