Before you go and blast me for promoting shady financing, hear me out.
I’m noticing a distinct trend amongst my clients. Parents want to diversify from their stock holdings into real estate, but income property financing requires 25%-30% down.
Their adult children want to buy a house, but they have no down payment and very little income or credit.
Solution- FHA financing! The parents use thier good credit and income and the kids are the owner/occupant. The minimum down payment is 3.5% and the kids start building credit.
Everyone needs to agree upfront how mortgage payments and down payment are divided, and it is wise to think about an exit plan.
However, properly executed, this is a win-win plan for everyone.
Kendyl Young
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