All Forum Posts by: Jose Saladin

Thank you for the insight @Ryan Blake

I'm definitely looking to do everyrhing above board.

As part of my strategy, I would like to build an master bath/bed extension, with its own entrance, to the three bedroom, two bath home mentioned in a different post.

A 20'x15' (could be smaller) structure that can accomodate the bedroom and the bathroom. Maybe even allow for a small kitchenette for full privacy, although it would be attached to the house with a connecting door.

The yard has enough room to allow for it. While it would take up half the yard, with proper lanscaping, it can be made into a nice looking haven for the tenants if they choose to use it.

Could rent out for $1k in the area. My thinking is increased value and cashflow on a long term hold. Not immediate returns.

Any thoughts on this?

Build cost? 

Tax implications?

Any other thing I may not see?

Thank you all for the replies.

Ashish. I truly appreciate the time you took to break things down the way you did. It's what I was hoping to get here on BP Forums.

I have replied to your comments within the quoted text above. In Bold Italic, between the dashes. Please note that my replies are just my thought process while I'm learning. In no way am I trying to contradict your statements. On the contrary, hoping to get any of them shot down if they need to be, so I can learn from it.

Anyone that finds any other hole, please don't hesitate to chime in.

Thanks again to all.

Absolutely!

Me purchasing it and renting it out to her turns it into an investment property thatvallows me to take advantage of all the tax benefits that come with it.

She may lose the primary residence mortgage benefits she has, but I think what we achieve with the conversion outweighs the loss.

Cashflow would be immediate and allow for quick savings growth for the next purchase. Together with the equity that the house will have (heloc or refinance).

No one has provided details to knocked down the idea yet, so I'm leaning in the doable direction.

Thank you for your reply Preston.

The idea is to pay off her mortgage by leveraging my cash value life insurance. So all ownership documents will be in my name, the llc's name or the land trusts name.

I want to purchase my sisters house as my first investment. It would be a live in rental.

I would have one bedroom to myself with access to the common areas. I would rent the house to her. She gets the master bedroom and my nephew gets the third room. She would have access to all the common areas as well.

The house is valued at $320k 'ish. I can get her to sell to me for the current mortgage balance of$150k'ish. I can leverage my WLI cash value to purchase it outside the banking system.  

The goal is to purchase it in a land trust or llc. Use it to gain some experience as a landlord and in two years leverage the equity to purchase a duplex. And of course, take advantage of the tax benefits along side my current business income.

Viability of the idea?

Pros and cons?