Hello! This is my first post! I am a new follower and slowly transitioning my husband and I to this lifestyle.
My husband and I live in an modern industrial 1,000 sq ft condo, 1 br and 1 1/2 bath in a popular area. We plan on starting a family next year and hope to move some place larger but could manage.
However, my husbands parents are in their early 80s and his mother recently is suffering short term memory loss (very noticeable amount), my fear is that this might spiral to many more things. It has been our thought that we do not want to have to "put them in a home". His father is having trouble adjusting and isn't very patient or understanding about her memory issues. Otherwise they are both in good health. We send them $300 a month to help with their expenses. (My husbands family is Asian and it's typical for children to help support their parents after they leave the home.) I am fine with this as they don't have much savings and live off social security, & they depend on this extra cash.
Bottom line, they live in the same city as us but 20 min north. We are thinking of purchasing a home with a detached garage apartment. His parents like the idea. We can live in the main house and they can live in the apartment or vise versa. We believe we can buy a sufficient home for this from $300k (hopefully less, needing work done) or $400k (finished). We can use $100k from the sell of their home to decrease the mortgage to an affordable amount for us and put the other amount in index funds and some in a checking for them. We would take care of their utilities and they can use their SS for car ins., groceries, savings etc.
I think the time to make this adjustment is sooner than later, as they may have trouble adjusting as they get older. Also they can see future grand baby and do some light baby sitting.
Break down:
-Our home is worth about $130k and we owe $194k (I know!) @ 4.25 %.
-For now, we would be at a $300-400 LOSS per month to rent it, I would like to keep it and pay it down for future income since we can't sell it without a significant loss. This can be canceled out by the $300 we give them monthly as they won't need it if we are taking care of most of their expenses.
-His parents house is worth about $250k with no mortgage, no significant additional savings
- His parents do receive SS checks and Medicare, at this point in not sure how much but will be finding out
-There is his sister but she cannot help financially as she is a SAHM and they live in a different state.
-finding a home either finished or the ability to add the apartment should run about 300k to $400k. The cheaper the better, we can fix it up.
- we will not get approved for another mortgage until we have a lease signed on our condo, the idea is for this to be our permanent home in our names. We can always rent out the apartment later on.
Is this a good idea financially? In what order should we proceed? What have we not thought about.
My husband is gun-ho about looking at homes but I rather rent our place, sell their house and then look at homes. I want an action plan! We don't have the cash flow to be paying for two mortgages. Thanks for the advice and help.
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