All Forum Posts by: Zachary Martin

@Brandon HallNo nerve was struck at all.  I'm deducting loan payments, I just wanted to make sure I could still do it if he had the property without being an "official financial institution".  I figured that some banking lobby would have had a law stating something to that effect a long time ago.

What I am looking to do is what @Andrea S. (tag didnt work) is doing.
I am his only heir and currently has everything in a trust, and would put my property in it also so if he were to pass, then it would go to me.  

Basically I would want to keep everything the same but my father would be the bank.

I would continue to make the same payments just to him instead of a bank.  He would get the income of the interest and claim it as income.  I would still have an escrow for taxes and insurance.  I would still have a credit history.  I would still deduct it on my taxes.  He would have to file some paperwork I assume to make do this.  

It just seemed like a good way to benefit one person (my dad in this scenario) while there would be no change for myself.  It seems a bit like "gaming" the system a little which is why I was slightly skeptical that it would be legal to do.

Thanks everyone for commenting on this.  I think I'll pursue this!

Also, thanks to everyone who has responded!

@Account ClosedI wouldn't be borrowing anything from him.

@Tiger M. My Dad said he wouldn't have any problems reporting whatever needs to be reported.  So that wasn't an issue.  He also agrees that its good that it stays "in the family".

@Arlan PotterMy dad is very generous to me and I trust him completely.  I highly doubt any issues would arise.

@Brandon Hall The purchase wouldn't be a gift or at least intended to be one.  My current loan is for about $164k.  How would it negatively impact my dad?  As far as our financial situation.  I have a stable job with a steady income and pay my payment weekly (1/4 every week). My dad is quasi-retired, he does some contract work, but has a large amount of cash sitting around.  He was a CPA and a controller so he seems to think that this scenario is fine.  The maintaining a "credit history" so that I wont be hindered in the future if I were to get a new loan is a concern.  Also being able to use my loan for a deduction would also be the part of this that would make this a "overall net family benefit".  I would still be making payments and later deduct them, building credit.  He would be taking the payments and getting the income of my payments and paying taxes on that and ending up "making money".  I want this to be a benefit to BOTH him and myself.  Or at least not hurt either him or myself.

So the scenario I have is that I am currently in the process of refinancing.  Thinking about it, I posited the question to my dad if he were to "pay/buy it off", and I were to pay him instead of the bank, he would benefit from the interest payments and nothing (ideally) would change on my end.  So I guess my questions would be...

-Is this do-able? (money isn't the issue)

-Would I still be able to maintain a credit history/record by paying him? Or would this mess with it as a result?

-Can I still deduct during tax time?

-Is there any legal situations that need to happen to make this work?

-Is there any pitfalls or problems I would run into?

Thanks!

@Thomas Clark Glad to see another NoVa resident here!  Welcome!

@Jonathan C. Very nice work.  I'm impressed! 

I keep an eye out for them but any town houses Ive seen in the area have been too expensive to cash flow.

@Jesse T. I have considered it.  I would have to fix it up a little (dog chewed up my baseboard) and probably replace the carpet.  I would also probably have to refinance also in order to not just break even (condo fee is a killer).

I have a bunch of funds already where I wouldn't need to do this.  However if it were a house hack type of situation I have no problem doing it.  

I don't really know much about commercial property but I know someone who owns a spot at 14th and U. Last I was talking to him he was trying to set up a 7-11 lease (NNN I assume) which would basically then take care itself for a couple of decades. If you can get a big name in that commercial spot, I believe its REALLY nice.