The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Us2bCool on February 28, 2014, 10:05:50 AM
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I am faced with a very good opportunity to buy an investment property at the moment.
It's a rental that has an excellent long-term tenant, will give good cash flow right out of the gate and is for a very good price. My parents have some personal reasons they want us to buy it and have offered to loan us the money so we can pay "cash". I will also be putting in a 15% down payment.
They would like their loan to be short term (2-3 years), so we would use their cash to make for an easy transaction, and refinance at a later date using traditional financing. My question is, are there any pitfalls you can think of for a transaction like this? What are the odds of being unable to refinance?
*Now, a little background...my husband and I had to declare bankruptcy three years ago due to a failed business. We just bought a new home using a VA loan four months ago, so I'm guessing it won't be an issue.
The purchase price of the house is $150,000, appraised value is closer to $180,000. We will be financing $125,000.