Buying a house for my parents and sibling: brilliant or stupid?
October 4, 2008 11:25 PM Subscribe
Is it stupid to invest in real estate in the next year (knowing things are hitting bottom and buying a foreclosure)? Is it doubly stupid to intertwine family with it (they'd live in it rent-free until the market rebounds)? Is this the stupidest idea ever or brilliant?
posted by anonymous to work & money (20 answers total) 3 users marked this as a favorite
Things are going really well for me. I'm maxing out my retirement, my marriage and immediate family are great, my house is half paid-off in just a handful of years, and I'm still getting paid really well. I could easily pay a few grand in mortgage on an investment property each month without affecting my budget too badly.
I know 2009 is going to be bad, foreclosures are everywhere, and the auctions/sales of homes are going for rock bottom prices, especially in formerly boomtowns most inflated by the bubble. I'm thinking of picking up a duplex in Southern California if I can get one "cheap" ($300-500k range is what I'd consider really cheap for down there in a decent neighborhood).
My family has hit rough times -- parents live in a retirement mobile home park in a 50 year old dark and dingy trailer. My only sibling is a lifetime renter with a small family and he works in the banking industry and isn't going to be able to afford a home anytime soon.
My plan was buy a duplex near where both families live, let them each live in half of it for the next 5-10 years rent free. This would be the ultimate gift for both families. My parents are old, and it may be the last house they live in, and if my sibling could skip rent, I think could afford a house in a few years. At some point, I could sell long after this burst bubble rebounds back and make a few bucks along the way.
It seems perfect, but the combination of bad financial times, family, plus all their baggage with me doing well while they aren't seems like a perfect recipe for disaster too.
Is this a stupid idea or could it work?