Could this crazy house-hacking plan work?

[Hung Tran]

Greetings all, Hung from NYC here and new to REI.

This idea just came to mind out of nowhere and wanted to get a pro’s take on it. Here’s what I’m wondering. I personally can’t house hack myself due to my wife’s job. But my sister lives 5-9 hrs away in Buffalo, NY. and I’m wondering if there’s a way to help my sister get a place to stay that’ll help her get into RE and help me learn and make some change at the same time??

Is there any way possible I could pay for her 3.5% down payment and have her house hack at that property and then collect the (what would hopefully be) a net profit after the PITI (principal, taxes, insurance and interest) are paid off??

I do recognize the FHA loan would have to be in her name because she ultimately is the one living there. That would mean that the equity built is in her name as well no? Would the only benefit in doing this be whatever profit there may be, I take, but she keeps the equity on the property?

[Theresa Harris]

You'd have to talk to a bank. From what I've heard in the US, the down payment can not be a gift.  Aside from that, if you can get something to work where you and her split this (say everything is 50:50 and she pays rent and you split profits), it could work.