My first long-term rental... to my mom and dad!

[Terry Dunlap]

Investment Info:

Single-family residence buy & hold investment in Huron.

Purchase price: $165,000
Cash invested: $165,000

Mom and dad didn't have a lot saved for retirement, so I bought their house and I actively invest the money for them. I don't actually charge them "rent" because I gift them $15,000/yr in which they use to "pay" rent. This allows me to write-off all the improvements to the house. The goal is to break-even or show a loss each year for tax purposes.

What made you interested in investing in this type of deal?

I think the description says it all.

How did you find this deal and how did you negotiate it?

Mom and dad questioned how they would survive in retirement, we sat down, we ran the numbers, we did the deal.

How did you finance this deal?

Paid cash.

What was the outcome?

Mom and dad stay in their house, and they now have enough investments to enjoy retirement.