HI
Im new here. My boyfriend has a house under the option to buy with his Inlaws. However he do not stay in the home and it needs roof repairs,cabinets needs doors in the kitchen, and a central heat and air unit to rent out. He do not have the money to repair the items so he will do most of the work. I my self consider to run my daycare business out of there instead and make repairs as we go along. I will help him make payments on this house which right now he only owes about 11k. Do this make any since or am Im just wasting more time and money?
Hi,
What is this house worth as FMV? (Fair Market Value)
Is your boyfriend lease optioning it from the inlaws? Or are the inlaws his partners in the property?
How much do you estimate the repairs to the property to cost in order to get it into reasonable serviceable condition?
Do certain repairs have to be completed to use the property as a day care?
Please post the answers to these questions or research in your area and give a estimated answer please.
Thanks,
GR
well the fmv is about 44k, and yes he is lease optioning it from the inlaws. I estimate repairs to be around 7k. and yes I would have to cover the floor furnace and some roof repairs If I open the house up for daycare purpose.
Hi,
Since your not married to this gentleman and have no defined idea as to what happens in the future I would advice you to:
Set up a legal partnership on the property making each of you 50/50 partners in the property with the cost of your “Buy In” being the immediate repairs.
Make an operating agreement that the fixed rents are to be exactly the amount of the fixed mortgage amount and taxes and insurance.
Agree that your business for the cheap rent will pay (x%) percent of your net profit from the day care per month to hold in reserve against getting repairs done to the property over time which restores the value.
This way it is a win / win for both of you as he gets a partner willing to pay for the property and you both get the money through you to fix it up over
(x) number of months.
In your operating agreement make sure you include your exclusive right to rent the property from the partnership for the 5 to 10 years investment period.
This can be fantastic for both of you!
Good luck,
GR
This is your boyfriend. What kind of boyfriend is he? Is he going to be your husband one day, or just a guy to play around with for a few years? That being said factor that into the fact that any real estate deal can turn out badly. If it turns out badly is it worth losing your boyfriend over? If you value your relationship more than the house, don’t do the deal unless you are married to him. My rule of thumb is don’t go into business with anybody that you can’t sue. You are not looking to sue anybody, but this gives you the clarity to understand that if a deal goes bad, you could end up in the place that would normally require getting lawyers. If you get to that place, can you still go to family reunions again, or will you have to go out a find a new boyfriend. The attributes of a good cousin, brother, or boyfriend are different than the attributes of a good business partner.
I say give him lots of moral support but no money.
hey everyone, me and my boyfriend is really common law according to the state, but I see him as a boyfriend because we are not married (paper). Even though we have been together for 10 years now. Thanks for all you guys replys. Now on to another subject, The guy next door to him is selling his house for 35k It needs lots of repairs. the arv is around 50k but when I asked the people in my real estate association they say thats too much and that in that area they are only buying the houses for around 20k or less (on the wholesale side). Even though they say it is too much I still want to buy the house for rental property purpose. What would you recommend with a no money down?
How much do rents in the area run?
If the local investors are telling you its too much AND they’re buying houses for around 1/2 what your neighbor is asking, you should probably take a step back and survey the situation. People that have multiple rentals have to buy the properties for a good price or the properties will eat them alive financially. Don’t overpay because you want to jump in the deep end of the pool. There are so many houses for sale out there and the market is soft in most places. Don’t pay double what the investors in your area are willing to pay unless you want to just become another statistic…