San Diego Real Estate Investment: Keeping it in the Family

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by Roberta Murphy

Ever considered a Family investment?

family
Brian Brady

I received a call yesterday from Brian Brady, aka America’s Most Opinionated Mortgage Broker, and he put forth a modest proposal that might interest more than a few thirsty San Diego real estate investors.

If these flush and hungry investors have children or grandchildren, said this Opinionated Mortgage Broker, they might want to help their children or grandchildren make a great real estate buy utilizing new and improved FHA financing.

How might this hypothetical transaction work?

First, one finds bargain real estate (may I help?) that is in reasonably good condition and priced under $697,500. It will also help if the motivated seller is willing to help pay closing costs. Conversely, we might have a gainfully employed and motivated young real estate buyer with parents or grandparents who still have an interest in keeping the family “real”–and who perhaps are also interested in real estate investment.

The good news? FHA will allow the borrower to qualify for the loan with a non-occupying co-borrower.

In other words, Mom and Dad–or Grandma and Grandpa–can co-sign on an FHA loan for their kids or grandkids–and can also share in potential future profits. What might also be interesting would be the possibility of allocating income tax benefits to the owner who could benefit most benefit from them. How payments on the loan are made is strictly by personal agreement. The kids might pay the entire monthly payment–or it could be shared with parents or grandparents. And though the entire family might wish to live together, it is not necessary to do so with this program since there is no requirement that co-signers live in the property.

As baby boomers are downsizing, this might be a way to invest assets and also assist kids in buying their own homes.

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