Hey guys
I have a great opportunity within reach and I'm wondering if its possible and a good idea. My mother in law has a house in one of NSW's major country towns. She has not lived in it for a few years, and the tenant she had in it for the last two years has left. The house has some problems with it…plumbing issues (only small), broken grill and TERMITES!
No matter how much I tell her to pay to get it fixed immediatly, she does not seem too interested. She said to me 'why don't you buy it from me and fix it yourself?'
I consider this a good opportunity for both of us, as she can rid herself of the problem property she doesn't care for, and I can negotiate a great deal on this property.
I have an idea and I want to know if it will work. This property is not worth much in its current state, so I thought that I could skip the lender, and she could give me an interest free loan. If she does this for me, I will pay her full market value for her troubled house,maybe even more. The only loser is the bank
, who loses their interest.
Can this work? Will my solicitor be able to write up a contract likethis?
ThanksYes a solicitor can do this for you – and it is a good idea to document what is happening so there is no problems further down the track with other family members.
I note both my parents and my husband's parents helped us with lower interest rate loans when we were first getting into property. But we did document the loan agreements and there were mortgages placed on title to secure their interest and put it on a commercial footing. We have since paid out those loans – and as you say – the only loser was the bank.
thanksGreat idea mate , just make sure you are committed to honouring yr side of the deal as
otherwise business and family can cause problems down the track.Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
I will certainly keep my end of the deal… Thats part of the reason I want a formal contract. I want her to understand that I am obliged to repay her, because I dont want her to think I am ripping her off. She is still having a little trouble understanding what I am proposing.
Hello Chris
If you mother in law does not understand your concept why don't you just see if she would accept/understand selling it to you on vendor finance at a friendly interest rate…. 4 – 5% may be reasonable …. for current market value.
The advantage to her would be that she would be rid of the problem and getting an income on an asset that is currently not earning anything. On top of that her equity in this asset is being literally eaten away by the termites she is unwilling to take care of.
Good luck
ElkaOne potential problem is if the MIL has a loan over the property. She would need a cash payment to pay that out. If this is the case she could vendor finance it to you on an installment contract instead though.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:One potential problem is if the MIL has a loan over the property. She would need a cash payment to pay that out. If this is the case she could vendor finance it to you on an installment contract instead though.Luckily she owns it outright. I am thinking I will offer her about 30k extra than market value for doing me the favour
, who loses their interest.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
