Author Topic: Retirements for my in-laws while maintaining their ownership of the restaurant?  (Read 6647 times)

jeromedawg

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Hey guys,

Some of you probably read a few of my old posts about my in-laws who own a Chinese restaurant in a less-than-desirable area and that is over an hour away from us. They're now in their 70s and continue to work their rears off, staying at the restaurant for 12+ hours a day with my FIL laboring in the kitchen and my MIL hunched over at the front desk taking orders on the phone and keeping track of the money. Their commitment to their work and work-ethic blinds them from the longer-term, especially now that they have a grandchild who my MIL has admitted she very much misses and will regret if she doesn't see him more often.

At first, we really wanted to push them to sell the place, but they would more than likely have to end up walking away from it if anything. I really don't think most Chinese restaurant entrepreneurs would want to pick this place up given the location. Other than the amount of money they make on delivery and also that they get pinged to have movies, tv shows and commercials filmed there several times a year, it's just not in a good area. They insist on staying open LATE too (like midnight). My cousin-in-law, who is a cop in the area, pleaded with them to close earlier and to work less; so instead of closing at 1am they now close at 12am....LOL And they stay open 24x7x365 pretty much; working through major holidays like Thanksgiving and Christmas. This is the life my wife grew up with - the restaurant was always child #1 to them.

Anyway, all that said, selling seems like a bleak proposition given the combination of all those things. So I'm wondering if there's another way out of this hell for them. Could they hire a manager (or promote one of the workers to manager) to oversee and run the restaurant while they kick back and 'retire' (or at least do the minimum amount of work while still reaping the reward [years and years of labor])? Could they even claim 'retirement' while still owning the business? I don't know all the tax implications but at this point in time they could use the cash flow. As it is, they don't have much if any savings (and if they do it's all in cash and not invested - they're so old school that they just stockpile their cash rather than investing and growing it via other means). I seriously don't think we could convince them to change their ways as far as how they handle and save their money. But at least having a cash flow would do something for them. Then, they could move down closer to where we are and just check on the restaurant maybe once or twice a month. As far as taxes, etc goes, they do have a CPA who they use but I don't know how much involvement he has in the business other than helping them with their taxes.

The only major roadblock I see with this approach is their [lack of] willingness to even consider entrusting the running of their business in hands other than their own. They [or at least my MIL] claims she'll go crazy and not know what to do if she "retired" - this seems to be at odds with her feelings about having a grand kid though. From what I've seen though, their tune hasn't changed all that much. At most, they have been making it a point to come visit us at least once every week - usually they'll come in late at night just before restaurant closing, stay the night, and stay through the better part of the day before heading back. They also refuse to move into one of those "senior living" communities, one of which is one not too far from us. We visited once with them and could tell they weren't very excited despite their friend who lives there desperately trying to sell them on it (part of which included her treating us to Hometown Buffet lol). Since they own a business and have a home mortgage, low-income housing would be out of the question...although, even if they didn't own the business and home mortgage and qualified for low-income housing, the wait-list is ridiculously long and pretty much impossible to get into if you're wanting to move in within a few years.

The other big catch is that they're only renting the restaurant space as a tenant, which obviously takes from their cash flow. It sounds like the landlord is increasing the rent too and I'm not sure what his terms will be. For them, they don't want to bother asking and just want to leave it up in the air and find out as they go...not very smart being the lesser of aggressors in this case.

At the end of the day, we obviously can't make decisions for them and they're going to do whatever they want to do. It's just going to be tough when one or both of them become hospitalized and we're forced into a situation harder than it should have been because of their poor decision-making. They're literally working themselves into the ground at this point, even if it doesn't feel like it for them. This whole "the restaurant gives me energy" is all a front IMHO. I think they've just gotten used to being tired all the time and showing face to cover it up at the expense of their pride.

Rock and a hard place I tell you.
« Last Edit: October 19, 2015, 04:37:52 PM by jplee3 »

Bruinguy

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It is possible, but I can see the issues with bringing in or promoting a manager.  Your in-laws would be relying on that income to live off of.  If the manager is not as good as your in-laws at running the place, then they suffer.  My bigger fear would probably be theft over incompetency.  I would imagine they would only consider it with family or someone else they trust unquestionably.  If they haven't done it yet, it probably isn't something they will want to do.

A sale of the business is the best answer.  You cite a lot of negatives, but it seems to be supporting your in-laws.  It may have some value.  I'd suggest finding a business broker that has experience with restaurants in your area. 

Will/do your in-laws get social security?  I don't believe you have to "retire" to begin collecting it.   

jeromedawg

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It is possible, but I can see the issues with bringing in or promoting a manager.  Your in-laws would be relying on that income to live off of.  If the manager is not as good as your in-laws at running the place, then they suffer.  My bigger fear would probably be theft over incompetency.  I would imagine they would only consider it with family or someone else they trust unquestionably.  If they haven't done it yet, it probably isn't something they will want to do.

A sale of the business is the best answer.  You cite a lot of negatives, but it seems to be supporting your in-laws.  It may have some value.  I'd suggest finding a business broker that has experience with restaurants in your area. 

Will/do your in-laws get social security?  I don't believe you have to "retire" to begin collecting it.

True, theft is another concern.... they did mention that they think someone in the kitchen was stealing food at a time (including sea cucumber, which is expensive stuff). Neither my wife nor her brother are wanting to take over the business and I don't think her parents want that either. So I guess they'll either sell or walk away. They have been working with local agencies for advertising the restaurant but it has garnered very little interest. Not sure if there are any good brokers in the area but it seems hard to come by - there are not a lot of Chinese restaurants in the immediate vicinity but there are other Chinese restaurants not that far away and that seem to be doing pretty well in comparison. This restaurant is the 'old dog' in town - they just haven't kept up with or catered to the market demand (esp younger folks). Only thing *maybe* that they have going for them is that they serve Korean/Chinese-Korean specific dishes upon request, so they have a bit of a niche with the Koreans but they're still so far, out of the way, and in not a great area, that most Koreans would rather go elsewhere it seems.

GizmoTX

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Are you sure they're even making money? Or they may be hanging on for dear life because they don't believe they can afford to retire.

LLCoolDave

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A long term business owner will always micro-manage the business if they hire a manager. It will make everyone miserable. The only way it works is if they have a franchise and the manager is over multiple locations. You really can't justify the salary of the manager any other way because profit margins are so thin in the restaurant industry. As someone else said, it's time to sell.

jeromedawg

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Are you sure they're even making money? Or they may be hanging on for dear life because they don't believe they can afford to retire.

I think they're in denial when they say things like "I'll probably go crazy if I retire" - I think they're literally funding their lifestyle. First off, they took a hefty mortgage out on their home back in 2004, which should say enough about their situation... they're working to pay for their home as well as whatever else they think they should afford. I think they feel entitled to "enjoy" their money except with them it's like a bunch of blackholes that not even they know about. That's what makes it super-frustrating for my wife especially, and probably made her into who she is today (frugal, penny-pinching, and perfect for adopting the Mustachian lifestyle lol)

jeromedawg

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A long term business owner will always micro-manage the business if they hire a manager. It will make everyone miserable. The only way it works is if they have a franchise and the manager is over multiple locations. You really can't justify the salary of the manager any other way because profit margins are so thin in the restaurant industry. As someone else said, it's time to sell.

Makes sense... seeing how things are going, I don't think they'll ever sell. They're going to be put in a position where they're forced to walk away because they didn't get out and sell when they should have. The "golden opportunity" they're looking for will likely never come, and if it does, they'll probably overlook it out of pride and say something like "No that's too little money for what we've built!" - same thing happened to my friend whose parents owned a restaurant. They learned though and took the next [and lower] offer out of desperation. Thing about his parents though is that their restaurant was in a more desirable area and I think they also owned the space. It's very difficult when you don't own a large space but operate a restaurant out of it... we were wanting them to initially downsize but I seriously doubt they'd ever consider that. And there's certainly no way they'd walk away and go work for someone either.

okits

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Is part of the situation just that they are addicted to work?  If they don't have a significant means of financial support in retirement I can see why they cling to the restaurant and want to personally manage it. 

Perhaps aim to improve the situation, rather than change it dramatically.  Get them to work a shorter shift once a week to get more rest or for more family time (you mentioned they have employees, maybe one would like to pick up more hours.)

You seem aware of all the obvious solutions and why they won't work/have been rejected.  What you and DW can do is prepare for the most likely outcomes (like one falling ill and having to suddenly walk away from the restaurant), and have well-researched plans in place if it does happen.  Not optimal, but as you said, they ultimately get to choose what they do with their lives and their business.

Once a week (at least) seems pretty frequent to be visiting.  How much more do they want to see you, DW, and grandchild?  (How much visiting can you and DW handle?)  Once you and DW get a bit more comfortable as new parents you could start driving out to see them.  Caring for an infant  is hard but if the grandparents are in their 70s and still working 80+ hours a week I think it would be fair to split some of the driving to have visits.  (Yes, they are choosing to work those hours but it could always be worse...  They could not work and be asking you and DW for financial support, instead!)

jeromedawg

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Is part of the situation just that they are addicted to work?  If they don't have a significant means of financial support in retirement I can see why they cling to the restaurant and want to personally manage it. 

Perhaps aim to improve the situation, rather than change it dramatically.  Get them to work a shorter shift once a week to get more rest or for more family time (you mentioned they have employees, maybe one would like to pick up more hours.)

You seem aware of all the obvious solutions and why they won't work/have been rejected.  What you and DW can do is prepare for the most likely outcomes (like one falling ill and having to suddenly walk away from the restaurant), and have well-researched plans in place if it does happen.  Not optimal, but as you said, they ultimately get to choose what they do with their lives and their business.

Once a week (at least) seems pretty frequent to be visiting.  How much more do they want to see you, DW, and grandchild?  (How much visiting can you and DW handle?)  Once you and DW get a bit more comfortable as new parents you could start driving out to see them.  Caring for an infant  is hard but if the grandparents are in their 70s and still working 80+ hours a week I think it would be fair to split some of the driving to have visits.  (Yes, they are choosing to work those hours but it could always be worse...  They could not work and be asking you and DW for financial support, instead!)

I think they are addicted to work. I mean, they have to be if they want to stay there from before restaurant opening (between 11am and 12pm) to close (midnight) virtually every day... They are getting social security but it's not much. And they are renting out two rooms of their house currently which helps out a lot on the mortgage. They are such compulsive buyers though... always with an "act first" mentality especially on huge decision e.g. when they decided to get the house, they did it because they wanted to...and only for that reason. They didn't think twice about how much money it would really end up costing them. My wife was puzzled at this especially because she was away at college when they decided to buy it.... it's a 3 bed home and they took a loan out probably in the ballpark of $400k-500k!!! They were able to get refinancing on it a few years ago but for a while before that they were just defaulting on their payments. Anyway, I think they're at a point where they could get some money back if they sold the house. It would probably be a wash with the amount of interest they've paid on it though. But of course they just see it as "we just got a ton of money, what are we going to spend it on now?" lol

As far as working less, they already are giving up a day to spend with the grand kid, so that's good. My wife spoke more with her mom and clarified that her mom doesn't want to be a babysitter and couldn't handle watching the grand kid all the time. I can already tell she's hands-off with him when she's with us - doesn't ever want to change a diaper (or is scared to...and we're scared too, because she'd probably not put it on right and he'd likely explode and leak all over the place hahaha), and only wants the benefits of holding and playing with him :). I think her expectations of being a grandmother are skewed... of course, I know people who pretty much rely on their parents as sitters, and it sure helps. But we're not asking them to do anything like that. I just thought her mom wanted to be closer to the kid and to see him more often...apparently she associates that with "I have to babysit. No thanks" hahaha

Yea I think we'll probably go up to the restaurant eventually. We used to before the kid on a monthly basis, and would spend the night at their house. Now that they're renting all the rooms out though, we don't have many options (unless we solicit from our friends up there to stay with them which I guess could work).
« Last Edit: October 20, 2015, 11:44:31 AM by jplee3 »

NoraLenderbee

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Do they WANT to "get out of this hell," or is that something you and your wife want for them?

If they do get out, and it turns out they can't afford their lifestyle, what is your plan? (Will you and your wife subsidize them? Will you persuade them to sell the house? Will they reproach you forever about how you made them poor?)

If they sell and get a chunk of money, will they become frugal and spend it wisely, or will they blow it as usual? What happens then? See question #2.

jeromedawg

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Do they WANT to "get out of this hell," or is that something you and your wife want for them?

If they do get out, and it turns out they can't afford their lifestyle, what is your plan? (Will you and your wife subsidize them? Will you persuade them to sell the house? Will they reproach you forever about how you made them poor?)

If they sell and get a chunk of money, will they become frugal and spend it wisely, or will they blow it as usual? What happens then? See question #2.

Good questions to consider. Maybe they want to stay put because it's a 'necessary evil' that they justify by saying they'll go crazy otherwise while denying that they're doing it to support their lifestyle.

I don't think we would be able to subsidize them but if they sold the restaurant they would have to realize they have no other choice but to sell the house. Before they make all of these decisions of course, we would want to sit down with them to go over all their stockpiles of cash in addition to how much they would be able to get back for the home. And just play out different scenarios (and the questions you pose are very good for that). I think part of the issue is that they don't want to do any of this... at least, it doesn't seem they want to for the time being. But who knows if they'll change their tune if and when they become immobilized or something drastic happens to one or both of them. There's no guarantee they won't blow the money if they get a chunk back from the sales, but I think they'd also understand the situation they're in where they can't just go buying whatever they want because they feel like it. For them, there seems to be a pretty strict correlation between working and acquiring stuff. And if they're not working, they'll would more than likely make the connection that they shouldn't be laying down loads of money on stuff... again, no guarantees. We can't safeguard every decision they make; only *try* to help them *try* making better ones.

Megma

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I have a similar discussion all the time with my mom who owns a catering company, she has taken one week off in the last five years maybe. I don't think she will ever retire, though she is now only mid50s, so younger than your wife's parents.

But this is also part of the deal to make any money in the food business, as others have said the margins are thin and it's very very hard to hand it over to a manager because of all the cash and huge risk of theft. My mother has had an impossible time trying to find even someone to watch it 1-2 days a week so she can have any kind of break. It's entirely possible that they're not making any money from what you have said about their finances, or are only coming out ahead because of their labor and not paying anyone else to do things. My mom does this a lot, does it herself to make a profit.

GizmoTX

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It's entirely possible that they're not making any money from what you have said about their finances, or are only coming out ahead because of their labor and not paying anyone else to do things.

This would explain the long hours.

okits

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Stubborn, no pension/possibly small stash, and impulsive spenders?  Sounds like they're going to do what they're going to do (at least if they are decisions they came to themselves they might put 100% effort into them.)  Probably your best bet is gentle suggestions and leave them be.

There may be psychological barriers like losing their status in the community as XYZ restaurant owners, or feelings of economic vulnerability and insecurity.  I know a handful of people your MIL & FIL's age who grew up in poverty, and the impulse to work for money they don't need (or not spend it) comes from deep-rooted experience.  I've decided to be glad for them enjoying life on their own terms. Perhaps for them, happiness is knowing there's money coming in and they have the ability and opportunity to earn more.

jeromedawg

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Stubborn, no pension/possibly small stash, and impulsive spenders?  Sounds like they're going to do what they're going to do (at least if they are decisions they came to themselves they might put 100% effort into them.)  Probably your best bet is gentle suggestions and leave them be.

There may be psychological barriers like losing their status in the community as XYZ restaurant owners, or feelings of economic vulnerability and insecurity.  I know a handful of people your MIL & FIL's age who grew up in poverty, and the impulse to work for money they don't need (or not spend it) comes from deep-rooted experience.  I've decided to be glad for them enjoying life on their own terms. Perhaps for them, happiness is knowing there's money coming in and they have the ability and opportunity to earn more.

You make very good points about them losing their status. I think they have some pride in that (they've been restaurant owners for several decades now). I think they're still stuck in the "good ole times" when business was booming, yet their lack of business sense has left them in the dust in terms of competition and keeping up with 'market demand' - the thing is, they've had a bad track record with money. For instance, my FIL let several of his younger siblings borrow money from him only to squander it all away. My wife often laments saying her dad could easily have gone to school and gotten an education to become an engineer or doctor if he didn't let his sibling step all over him. The bad part of this is that they're pretty naive too, always giving people more than benefit of the doubt, even when it comes to people trying to rip them off. Although, when my FIL puts his foot down he puts it down pretty hard... or at least, it seems he's hardened up in this sense. But whenever someone is trying to sell or pitch something to them, they are so easily swayed by it it's not funny. Anyway, they've taken care of themselves up until this point. I guess we shouldn't have so much doubt that they can't carry on further than this. But the real concern, as I stated before, is what happens when one becomes immobile and the other loses his or her marbles. It's a very scary thought.

ysette9

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This sounds like a frustrating and potentially scary situation for you to watch them age and think about what will come down the line. As other posters have hinted at though, I think the best you can do is watch, research contingency plans on your own, and wait for them to make some noise about wanting to change their situation. My in-laws (also Chinese) are very stubborn as well. My husband has tried to help his mother with retirement planning for years now and she has slowly opened up to allow financial planning and getting her out of some foolish investments, but not much else. All of the things that look good to us (selling and moving to a LCOL area, for example) are rejected. More frustrating still is that she can't elucidate what she would like to do in retirement beyond watching TV so it is impossible to help her plan different scenarios.

In the end we have learned to just let her do her thing and try to provide gentle nudges or specific help (such as reviewing investments and cash flow) occasionally. Simultaneously he and i have had many talks about what kind of support we are wiling to provide should that be required down the line. I recommend having those honest conversations with your wife and get on the same page before you are presented with a crisis. For example, it is common for Chinese parents to expect to live with their kids in retirement and/or provide financial support. Are you okay with any of that? If so, how much and for how long? You really don't want to be fighting about stuff like that with your spouse.

jeromedawg

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This sounds like a frustrating and potentially scary situation for you to watch them age and think about what will come down the line. As other posters have hinted at though, I think the best you can do is watch, research contingency plans on your own, and wait for them to make some noise about wanting to change their situation. My in-laws (also Chinese) are very stubborn as well. My husband has tried to help his mother with retirement planning for years now and she has slowly opened up to allow financial planning and getting her out of some foolish investments, but not much else. All of the things that look good to us (selling and moving to a LCOL area, for example) are rejected. More frustrating still is that she can't elucidate what she would like to do in retirement beyond watching TV so it is impossible to help her plan different scenarios.

In the end we have learned to just let her do her thing and try to provide gentle nudges or specific help (such as reviewing investments and cash flow) occasionally. Simultaneously he and i have had many talks about what kind of support we are wiling to provide should that be required down the line. I recommend having those honest conversations with your wife and get on the same page before you are presented with a crisis. For example, it is common for Chinese parents to expect to live with their kids in retirement and/or provide financial support. Are you okay with any of that? If so, how much and for how long? You really don't want to be fighting about stuff like that with your spouse.

Yea, it's a bit scary thinking about it. I don't think they realize that they could end up being a big burden for our family and also my brother-in-law (although, he lives far enough away where he wouldn't have to foot much if any responsibility). I think they're even in denial about this, because I can see them telling us not to worry about it and that they'll be okay. They're seriously the type who will throw money at problems if it comes down to it. My wife has said that her mom wants to move closer to us but I don't think that will ever happen while they still run the restaurant. I seriously think they won't consider walking away or selling until it's too late and at least one of them is out of commission.

I think I'll have to discuss this more with my wife, as you said. Not even she knows what they have saved up in terms of their cash stockpile. They are only willing to share up to a certain amount of information about their finances with us but my wife does help them a lot with paying bills and keeping track of some parts of their finances (e.g. avoiding overdrafts and paying bills on time to avoid late fees). She talks about how her parents don't want to rely on us for help but I seriously don't know if they realize what they're saying. My wife says they don't want to depend on us or trouble us for help, which I appreciate but I think it's gonna end up coming down to that to some extent seeing how they haven't been taking the best care of themselves.

chasesfish

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JPLee - I deal with this all the time in my career, there's really no easy answer to this.   Here are a bunch of observations:

1) Hiring a manager isn't an option - Nobody will work as hard as they will and if the person isn't already there proving themselves, its a non-starter.

2) Selling the business probably won't generate much, because they're selling someone a job. 

3)  I also don't want to make too many assumptions, but I've had husband/wife asian-american businesses as clients before.  They rarely have a lot of taxable income to verify even if they wanted to list and sell it.  The mindset of stockpiling cash may also validate this

4) The business is their passion and their status symbol.   House or not, your parents haven't accepted what they do after its gone.  Part of this depends on how hard they work.  I see business owners well into their 80s if they have kids that want to get involved.  It is their baby.

Unfortunately, it will probably take some "event" for your parents to realize that they can't continue running this.  There really isn't any value in the restaurant, so I think closing it is the option.   IF they're willing to close it and plan it, they could do it over a 2-3 month period, advertise it, and have some community celebrations. It would be a lot nicer to see that then for something to happen with one of their health and sell it.

The house?  I can't help you much there other than recommending you start building a parental suite on your house now.  Feel free to message me if you want any more specific advice.

ysette9

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She talks about how her parents don't want to rely on us for help but I seriously don't know if they realize what they're saying. My wife says they don't want to depend on us or trouble us for help, which I appreciate but I think it's gonna end up coming down to that to some extent seeing how they haven't been taking the best care of themselves.

This sounds very familiar. My husband has spent many  hours banging his head (figuratively) against the wall, frustrated with how stubborn his mother is regarding her finances. It is a pride thing, an independence thing, not wanting to be a burden on the kids, everything wrapped up together. What seems to have worked in our case is a series of small conversations over the past 4-5 years. She has slowly opened up more and more and allowed my husband to look at their entire situation. She hasn't quite retired yet but is in a better position now than I would have ever guessed when we started talking years ago. Hopefully you can make incremental progress in your situation as well.

Fishindude

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The restaurant business is tough, and it's really tough for the one location mom & pop outfits like you describe.
My guess is, they aren't making very much money to start with and can't afford to add the overhead of a manger.  Plus, when you are not there watching the money, some of the money tends to disappear in these businesses.   Theft runs rampant in these type of operations.

They probably just need to keep working till they can't do it anymore, then either sell the place for whatever they can get or close up shop and auction off all of the equipment and contents.   It likely won't be of much value.

Financial reality will likely smack them pretty hard.
Anything you can do to get them planning for an exit would be good.

elaine amj

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You should consider what you are willing to do to support them in the future. Also, what type of social safety net do you have where you live?

Here in Ontario, we have a considerable safety net and my aged in-laws with minimal savings are living very comfortably on the income they get from the government (really helps that we don't have to pay for healthcare). I don't think they have a whole lot in pensions but between CPP, OAS, and GIS, they each have gotten enough to pay for their (minimal) needs. Of course, they live at the Mustachian level and this makes a difference. My MIL lives with us and spends $700 a month - that covers someone coming in daily to cook lunch for her and some housekeeping ($500/mo), her share of the groceries, and a contribution towards utilities. She really has no other expenses so her monthly income is sufficient for her needs.

Dicey

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JPLee - I deal with this all the time in my career, there's really no easy answer to this.   Here are a bunch of observations:

1) Hiring a manager isn't an option - Nobody will work as hard as they will and if the person isn't already there proving themselves, its a non-starter.

2) Selling the business probably won't generate much, because they're selling someone a job. 

3)  I also don't want to make too many assumptions, but I've had husband/wife asian-american businesses as clients before.  They rarely have a lot of taxable income to verify even if they wanted to list and sell it.  The mindset of stockpiling cash may also validate this

4) The business is their passion and their status symbol.   House or not, your parents haven't accepted what they do after its gone.  Part of this depends on how hard they work.  I see business owners well into their 80s if they have kids that want to get involved.  It is their baby.

Unfortunately, it will probably take some "event" for your parents to realize that they can't continue running this.  There really isn't any value in the restaurant, so I think closing it is the option.   IF they're willing to close it and plan it, they could do it over a 2-3 month period, advertise it, and have some community celebrations. It would be a lot nicer to see that then for something to happen with one of their health and sell it.

The house?  I can't help you much there other than recommending you start building a parental suite on your house now.  Feel free to message me if you want any more specific advice.

Chasesfish nailed it. It's wonderful that you care so much, but ultimately it is their decision. They can't picture any other version of their life than the one they're living. In a way, there's honor and dignity in that. The best course might be for you to be supportive but silent. Imagine yourself in their shoes one day. Would you want your offspring trying to tell you that the life you've built is wrong?

jeromedawg

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JPLee - I deal with this all the time in my career, there's really no easy answer to this.   Here are a bunch of observations:

1) Hiring a manager isn't an option - Nobody will work as hard as they will and if the person isn't already there proving themselves, its a non-starter.

2) Selling the business probably won't generate much, because they're selling someone a job. 

3)  I also don't want to make too many assumptions, but I've had husband/wife asian-american businesses as clients before.  They rarely have a lot of taxable income to verify even if they wanted to list and sell it.  The mindset of stockpiling cash may also validate this

4) The business is their passion and their status symbol.   House or not, your parents haven't accepted what they do after its gone.  Part of this depends on how hard they work.  I see business owners well into their 80s if they have kids that want to get involved.  It is their baby.

Unfortunately, it will probably take some "event" for your parents to realize that they can't continue running this.  There really isn't any value in the restaurant, so I think closing it is the option.   IF they're willing to close it and plan it, they could do it over a 2-3 month period, advertise it, and have some community celebrations. It would be a lot nicer to see that then for something to happen with one of their health and sell it.

The house?  I can't help you much there other than recommending you start building a parental suite on your house now.  Feel free to message me if you want any more specific advice.


Thanks for the feedback. Well, one "event" has been them having a grand kid but it's obviously not important enough to them to try harder in selling the restaurant and quitting. They really have no exit plan though, even though they've lightly discussed retiring in the past. This makes sense since they like to talk and take action without planning. I agree there's probably not much value in the restaurant. Unless they hand off the business for beans... it sucks too because all the employees *know* they can step all over my in-laws and sort of have them by a leash. It's pretty ridiculous, thinking about it. We'll have to have more of these "retirement" discussions with them in the future. But for now, it seems they're just burying their heads in the sand and not really wanting to face reality. Their outlook is "it ain't broke so don't fix it" which makes sense in some contexts, but there will be a point when it *is* broke and you *can't* fix it - that's what scares us.

The parental suite would be nice, except we're in a 3 bed condo hahaha. I suppose they could stay in the guest bedroom, but we haven't even figured out which room our kid will be in. Regardless, I think the condo is a bit too small for all of us. The other idea, which would be more of a toll on us, is to 'rent' our condo out to them for a pretty minimal cost (whatever that is) and we move into a home. I went in on the condo with my parents and they're planning to pass it down as 'early inheritance' to us but it's complicated since the value of it will be split between my brothers and I upon any sort of sale. It's sort of a forward-granted inheritance if you will. My wife and I have loosely considered moving into a house too, so maybe that's a possibility. Then her parents could either sell the restaurant for beans or walk away from it and figure out what to do with their house up there too... I was thinking they could rent the house out if they move into our condo (and we move into another place) but they still owe mortgage on that place so they'd just be renting to pay the mortgage off (and I'm not sure how much left they have). If there's not *too* much left on their mortgage, could they just finish fully paying it off, and then rent it out for passive income stream? If all else, I suppose they could just sell the place to avoid all the headache.

chasesfish

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I can completely relate to your frustrations.

Ultimately I think you have to control your own financial situation and prepare to be in a position to provide them the level of assistance you desire when that time comes.   I am constantly frustrated with the financial choices of my in-laws, but at the same time they were overly generous to us 10 and 15 years ago when we were not capable.  Due to that, I feel a both a responsibility and desire to help them in the future when we are capable and they are not.

That decision is different for everyone.  You can't beat yourself up over the financial choices they make between now and then, you just have to decide what their decisions mean for your commitment to assist them in the future. 

elaine amj

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I can completely relate to your frustrations.

Ultimately I think you have to control your own financial situation and prepare to be in a position to provide them the level of assistance you desire when that time comes.   I am constantly frustrated with the financial choices of my in-laws, but at the same time they were overly generous to us 10 and 15 years ago when we were not capable.  Due to that, I feel a both a responsibility and desire to help them in the future when we are capable and they are not.

That decision is different for everyone.  You can't beat yourself up over the financial choices they make between now and then, you just have to decide what their decisions mean for your commitment to assist them in the future.

Very good point. My mom is now making some crazy financial decisions I have been objecting very loudly to. I told her I don't like it, but it really is her decision to make. She asked me recently to borrow some money. DH and I talked it over extensively - I don't like it - but how can I say no? She supported my dumb decisions in the past and has always been very generous with us, especially in the past when we didn't have much. I still remember her sending me $5000 to invest in a business (that I had already poured all my money in) that she knew was going to fail. I still believed in it though, and she supported me (and she could easily afford it) and didn't say a word when it eventually failed. Years later, she told me she considered it an educational cost. How can I possibly say no if she asks me for help now?

Dicey

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Thanks for the feedback. Well, one "event" has been them having a grand kid but it's obviously not important enough to them to try harder in selling the restaurant and quitting.
If your parent's didn't ease up on their work schedules for their own children, it might be unreasonable to expect them to behave differently for grandchildren.

I went in on the condo with my parents and they're planning to pass it down as 'early inheritance' to us but it's complicated since the value of it will be split between my brothers and I upon any sort of sale. It's sort of a forward-granted inheritance if you will. My wife and I have loosely considered moving into a house too, so maybe that's a possibility. Then her parents could either sell the restaurant for beans or walk away from it and figure out what to do with their house up there too... I was thinking they could rent the house out if they move into our condo (and we move into another place) but they still owe mortgage on that place so they'd just be renting to pay the mortgage off (and I'm not sure how much left they have). If there's not *too* much left on their mortgage, could they just finish fully paying it off, and then rent it out for passive income stream? If all else, I suppose they could just sell the place to avoid all the headache.
This is very convoluted, but my takeaway, based on my limited understanding, is that perhaps you should consider repaying the loan taken from your parents for the condo before you buy a house. I'm sure they can use the extra money, possibly to pay off their own mortgage. Given their situation as described by you, I'm puzzled that you haven't considered this option. If you're adult enough to start a family and your parents are of limited means, expecting them to provide (even partially) for your housing and babysit your child(ren) just doesn't seem like the best decision possible.
 

sunday

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This is very convoluted, but my takeaway, based on my limited understanding, is that perhaps you should consider repaying the loan taken from your parents for the condo before you buy a house. I'm sure they can use the extra money, possibly to pay off their own mortgage. Given their situation as described by you, I'm puzzled that you haven't considered this option. If you're adult enough to start a family and your parents are of limited means, expecting them to provide (even partially) for your housing and babysit your child(ren) just doesn't seem like the best decision possible.

Good advice, Diane C.

NoraLenderbee

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Thanks for the feedback. Well, one "event" has been them having a grand kid but it's obviously not important enough to them to try harder in selling the restaurant and quitting.
If your parent's didn't ease up on their work schedules for their own children, it might be unreasonable to expect them to behave differently for grandchildren.

I think the restaurant owners are the OP's in-laws. The people who helped buy the condo are the OP's own parents.


jeromedawg

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Thanks for the feedback. Well, one "event" has been them having a grand kid but it's obviously not important enough to them to try harder in selling the restaurant and quitting.
If your parent's didn't ease up on their work schedules for their own children, it might be unreasonable to expect them to behave differently for grandchildren.

I think the restaurant owners are the OP's in-laws. The people who helped buy the condo are the OP's own parents.

Yes this is correct. Sorry, I should have tried making that a little more clear. My parents and I went in on the condo together and have nothing to do with the restaurant (and are happily retired). My in-laws are the one with the restaurant and difficult forecast of a future.

Dicey

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Thanks for the clarification. It's a tough situation, and I wish you the best.