Quote from @Steve K.:
Hey David,
I like this idea, but a couple things to consider:
1. Do you have a good relationship with your parents and are you comfortable collecting rent from them, addressing maintenance requests for them and things like that? If they can be difficult to work with, then I'd be careful renting to them as it's not worth ruining a relationship.
2. Why do you want to put the property in their name? Why not just purchase it yourself?
3. If you live in the property there are some great owner-occupy loans available, like FHA or low money down conventional loans. You'll want to talk to a few local lenders to get a better idea what you'll qualify for and what the terms of the loans are.
4. You can live in the property for a year and then move out, buy another multifamily to live in, and use another low money down owner occupy loan. You need to live in the property for at least a year but you can repeat this year after year if you don't mind moving.
5. If you live in the property for two years and want to sell, you won't pay capital gains tax, so that is just another thing to keep in mind.
6. Buying a multifamily shouldn't impact your ability to get a home loan for a single family in the future, so I wouldn't let that deter you. I'd just make sure the multifamily is cashflow positive when it's fully rented out (as in after you've moved out and rented the unit).
Hey Steve,
Thank you for the response! Below are some of my takes on your questions, and some follow up questions:
1. I do have a good relationship with my parents and would have no troubles with renting to them. My father is a handyman, and he is willing to help me fix up the place & with any maintenance that may arise once its rented out.
2. I am considering putting the property in their name in order to still qualify for any first time home buyer offers when I am looking for a single family home 2-3 years from now. Would you say this is a valid concern?
3. I would am willing to live in the property for 1 year at most, but afterwards would need to move into a single family home. Future multi family homes I purchase could not be with FHA loans if I am understanding correctly?
4."Buying a multifamily shouldn't impact your ability to get a home loan for a single family in the future". If the multi family home is in my name, would its loan I have not be weighed against me when trying to get a single family home?
Again, thank you so much for the assitance!
