Best use of assets

Hi all, We are looking for advise from some of you pros out there on buying and holding a very nice home that just came on the market. They are asking $65,000, and the ARV is around $110,000-$120,000. We arrived at this value from the local appraiser who happens to be a close friend of the family. All it needs is carpet and paint. Here’s the deal… My parents are both retired school teachers and own 2 homes free and clear, approx. value around $400,000, they have perfect credit also. It is too good of deal to pass up and it won’t last long. We are wondering what some of you might suggest for the best use of their assets and credit in purchasing this home? Thanks and Great Site!!

  1. Who is “we”? Please define all of the players.

  2. You speak of “my parents” and “they” - what is your piece in this?

  3. What about your assets and your credit?

  4. I would say that less the 1/10% of people in America have “perfect credit”. Perfect credit is a credit scores of 850. This is extremely unlikely. More probably, they have “Excellent” credit.

Great credit, availble equity, and capital coupled with a good bargain (54 - 59%) of value obviously make for a winning combination.

Ask youreslf this and then let us know: “If you bought the property, what would you do with it?” (“exit strategy”).


Thanks for responding… “We” is my parents and myself. I am a 46 year old former logger/log home builder from Northern Minnesota. My body endured many injuries over the 25+ years that I worked in the woods, and now I am paying for it. I am currently on SSDI and am waiting on a back surgery. I recieve $850.00/month and have a credit score of 642 and it is getting better month by month. I have no debt and very little in the asset department. I had to sell my home in order to pay off debts and my ex-wife while I still had the chance. I obviously cannot qualify for any type of mortgage at this time and have weighed my options as far as making a living in the future. I am one of these REI wannabes and have bought many courses and have studied everything I can get my hands on in the last couple years. Still don’t know what to do… and all day to do it. My parents are concidering buying this property and maybe do a L/O with me so I can have a place to live and get a fresh start. I would like to purchase the home from them once my income improves and either sell it when the market starts back up or keep it for a rental property and use the equity out of it to do it all over again. (is this a feasible plan?). If I can’t purchase the home down the road, my parents exit strategy would be to sell and get their money back out of it, and I don’t see that being a problem. And by the way Keith, my parents ARE in that elite 1/10 of 1%, they have NEVER missed a payment on anything in 50 years. When their credit has been run it usually gets run twice because the lenders can’t believe their scores… Ultra responsible people! Hope this helps you know the scoop…


Yeah, my score is like that, too…they ask me how my credit is and I usually say, “Pretty good”…then they run it and I can hear them look at hte report and say, “Holy Crap”…

I know how it is in the woods…my dad was a self-employed logger in New England. I started in the woods at 8, carrying the scale stick and tally pad. Then I graduated to running thru the tops and pucker brush setting choker chains and running the cable out thru the woods. Not real fun and really hard work. Pop got pretty smashed up a couple of times but that old rascal could put some count on the deck!

I think you have several options - fix up and flip, fix up and hold as a rental, or wholesale it back out immediately. Buying and living in it is plausible but not really REI and it isn’t going to make you any $$$…

And, oh yeah, BTW, ex-wives just plain suck (and not in the good way)!


One thing you’ll have to consider is the effect any income you make may impact you SSD check. I also hope your ex doesn’t try to get a piece of the action. If you can get into this house and then purchase it from your parents, that would be a great option for you. If you end up making enough to cancel out you SSD, that’s one thing. But if your ex is gonna try to get a pice of your money, invest so you can keep her hands away from it ( i’m not sure how to do that). I guess you can use equity in property to buy another and another as long each property supports the new debt load. When they’re all paid off, you can refi at 50% LTV and live off the money. It’s not considered income because it’s a loan. You just have to find a place to put it where she can’t get at it… O.K I’mbeing presumptuous and negatine bbut i have a lot of friends who have ex’s like that… Good luck to you. :beer