If you're a single mom with student loans, a car payment, and living paycheck-to-paycheck, then $20,000 would be devastating and a reserve is critical.

Maybe a better question would have been if you know how much money you have for a down payment on a property? 

You could structure the deal as an installment sale or a lease option so the property owner doesn't see a large capital gain tax payment for the sale.And good on you for helping out!

Cash Payment: Decide whether you'll finance the purchase or pay in full.Future Resale Value: Factor in potential appreciation of the property.2.

Prepare financially by saving for down payments, improving your credit score, and setting aside emergency reserves.

Down Payment: 20% of the purchase price, equal to $43,0003.

@Peter Mckernan Copy.... it's a "% based payment" off scope of work. 

Instead of a traditional down payment, I would give them some money (maybe just to bring the loan back to even).The upside if taken over the loan at the current balance, with some rehab and hopefully getting the front lot back would be a nice ROI. 

My plan is to use a low down payment conventional loan, and with the factors you mentioned, it’ll likely be tough to find a property that breaks even.

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.