Buying house for someone else

[David Niu]

Hello BP friends,

I am buying a house for a John( friend) who does not qualify for financing at the moment.

House will be around 200k in Westland, MI

Will do a 5% conv. Loan with seller paying a max 3% concession. Total will be around 11k cash needed at time of closing.

John will sign a triple net lease, who then will pay rent with a 200+/month cash flow.

After 1.5 years John wants to buy the house back at market rate, but no lower than what I paid for it. (Appreciation is minor in Westland)

My question is how much money can I pull out at time of sale? Assume 5k in equity, how about the down payment, am I able to pull that out as well?

If this is a bad deal for me, how can I turn it around? Are there creative Seller financing options I can set up when selling John the house?

Thank you all for your time, I am happy to clarify my post if not clear enough.

David