Hello BP Community,My Sister would like to gift me and my other siblings our parents home, with our plan being to get a heloc on it and rent it out while investing the money from the line of credit into rentals or flips.

I never looked a gift horse in the mouth, but as I think about it, this may be a requirement from the state insurance commission, disallowing charging premiums for the same risk, I don't know, but I can see the issue.

The problem is, I was just informed I won't be able to get a conv. loan on an investment property if I am using a gift/loan for the down payment.  

My 4 year old owns a 4 plex (gift in trust from her great grama) but she uses a PM as she isn't ready to handle it yet... she wanted to paint it purple and put a horse in the back yard.

Believe IRS regs will require the loan to be documented, at a fair market rate and have regular payments, so as not to be classified as a gift and subject to IRS gift regs. 

Even when I flipped my home from my personal residence into a rental, I think I paid $500, which covered touch up paint, light bulbs, professional cleaning, and a welcome gift for my new tenants.

Personally I'd offer my tenants a $150 gift card to a steak house and refuse anything else or cave and hire my CSI team.

She had an alternative solution and told me that "ask your uncle to gift you the whole downpayment".

If I want to help, it's a gift, never a loan.

When I gave birthday gifts to friends, they were handmade instead of store-bought.