A zero cash-flow BRRRR for my Mother

[Jimmy Suszynski]

My mom is getting older and a two-story home is less than ideal. She rents off of another family member and somehow I'm the one who fixes everything that goes wrong at the place. I installed new flooring in entire first floor, ran gas line for her dryer and bought paint. I don't mind doing these things, she's been more than great to me.

I found the perfect place, but it turned out to be a foreclosure and I don't have the cash to buy it outright. It definitely got the creative juices flowing, however, and I believe that I can help my mother out tremendously and create a HELOC for myself in the process. Since I don't have the cash and neither does she, if we can find the right property that meets all requirements for a good BRRRR deal, I'd like to have her use the FHA 203k loan with me as a co-borrower. Once the property is in good shape, cash-out refi or just take out a HELOC on the equity. I would put down 10% or more to be able to get out of the PMI.

Rather than make money off of my mother, I'd rather her just pay the mortgage/taxes/insurance. Servicing the loan and cheaper utilities would save her $150-200 per month and I would have access to a line of credit to help me out over the next couple of years.

Does this sound absurd?

[Adam Ramsey]

Hi Jimmy,

The one thing I would be worried about is having your name on the loan. That debt may throw your own debt to income ratio out of wack when trying to get other loans whether it be for another property or just anything you need to finance in general. I'm not sure how they would exactly figure out how much of the payment goes against you (maybe half) but I'd talk to a lender first to see how this could affect you when trying to finance anything else down the line.