How to get rich buying real estate from your parents with no down payment and no credit
You can get rich from real estate capital appreciation by purchasing properties from your parents through traditional or creative financing that may or may not require a down payment or credit. Whether you’re a first-time homebuyer or a seasoned investor, you can buy any type of property from your parents, from a house you live in with them to an investment property you rent out to tenants. Here are some reasons why it may be faster, easier, and more financially lucrative for you to buy from your parents than from anyone else.
You don’t have to buy an entire property
When you buy from your parents, you can buy whatever percentage you want, like 10%, 50%, or 75%. If you pay less than full price, you will have lower mortgage payments and buying a home will be more affordable. No matter what percentage you own, you still get the benefits of owning a home, like capital appreciation, mortgage interest deductions, property tax deductions, and capital gains tax exclusions.
You can share the responsibility with your parents
When you buy a partial interest in a property, you and your parents share the responsibility of owning it, including any mortgages you each have, property taxes, homeowners insurance or homeowners association debt, and maintenance. Because you have more than one person responsible for a property, you can rely on each other for financial strength in the event of difficulties.
You can upgrade your status from renter to owner
Do you already live at home without paying rent or paying rent? If so, why not buy your parents’ house, since you already live there, and get an equity stake in their property? So, you no longer live with your parents, but you live in the house you have with your parents. If your parents own more than one property, you can buy one of their secondary or investment properties and live on your own.
You don’t have to get a loan from a bank
When you buy from your parents, you don’t have to qualify for a loan from a traditional lender like a bank that has income, asset, and credit requirements because your parents can act as a bank and give you seller financing for your purchases.
You can create your own mortgage loan
When your parents act as your bank, you can get favorable loan terms by structuring your own payment schedule with a manageable loan amount, a lower-than-market interest rate, and a payment term of your choice.
You don’t need a down payment
Unlike getting financing from a bank that has down payment requirements, you can buy from your parents with no down payment.
You can get property tax benefits
Depending on the state you live in, your property taxes may not be reassessed to current values when you buy from your parents or grandparents due to a parent-to-child and grandparent-to-grandchild property tax reassessment exclusion. . This is a huge benefit when parents and grandparents have owned the property for many years and have property taxes based on the values of their properties at the time they purchased them.
You can receive gifts from your parents
Your parents can give you gifts of cash or stock for your purchases, reduce the principal amounts of any loans you owe them, and allow you to buy at a discount. Anyone can give a limited amount of money in a given year to any number of people they want without reporting it to the Internal Revenue Service. This is one way your parents can sell you without you having to pay all the debt you owe them. They may also credit you money at closing escrow for your closing costs by deducting the credit from your sales receipts.
You can turn your financial supplements into an investment
If you’re financially supplementing your parents because they don’t have enough to live on when they retire or for any other reason, you can turn your supplements into an investment by buying your parents’ house and making mortgage payments to them. As a result, you will have an equity stake and the benefits of owning a home.
You can make a profit if you are a real estate agent buying from your parents
If you’re a realtor, you can get cash from your parents at closing escrow. If there is enough equity in a property to pay off any existing liens and pay you a fee, you can take out a traditional loan to buy a share of your parent’s property and get a fee for representing yourself as the buyer, or both you and your parent. parents as buyer and seller.
You can still get rich when your parents are not an option
If your parents aren’t an option to buy, consider buying from other family members and any other sellers. You can purchase a partial interest in real estate and use seller financing to facilitate your purchases. Also, consider joining forces with siblings, friends, roommates, or other shoppers to increase your buying power.
It may be easier to buy from your parents than from strangers
There is a wealth of resources in our own families, but many of us overlook this fact because we are trying to achieve financial success for ourselves. Because your parents have worked their entire lives to achieve what they have, one of the smartest things you can do is work with your parents and build on their success.
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