mpeirce
Thinks s/he gets paid by the post
I'm about to help out my DM with a the purchase of a coop (condo).
I'm looking for any suggestions or things to watch out for.
The details: she moved to Fort Lauderdale last summer and rented a condo for a year to "test drive" living in Florida and see if she could handle the summers. Seems like she can and really likes living there. She's been taking an annual winter trip down their for many years and has friends there.
She's found a nice coop that is about the same size as the condo she owned up north - 2br/2bath in decent shape with a nice view.
Financially she's fine. She has a teachers pension and some modest savings. She's never gotten into financial trouble and lives within her means.
The cost of the coop is roughly the same as her old condo up north. The old condo had a mortgage on it. If she could finance the coop, she could afford the mortgage.
The main issue for her is that coops are rarely financed down there. Banks won't do it (or rarely) although some sellers will finance the sale.
My idea is to not loan her the money, but rather go halves with her. I'd match the money she has from the sale of old condo to pay for the coop in full.
We'd set up an agreement where we own the place 50-50. We each contribute 50% of the full purchase price, then, when it's sold, we split the proceeds. She would be responsible for all other reasonable expenses - taxes, HOA fees, normal upkeep. The same as if she owned it outright. If there is any big changes need to the place (like updating a kitchen, not that this place needs that) that would affect the selling price, we'd both have to agree on it and chip in for it 50-50.
She will have the right to sell when she wants (say when she moves on to independent living or whatever).
After talking with a local attorney down there, the common form for this type of agreement is a trust. We put all the details into the trust agreement.
The money isn't a huge thing for me (though it's pretty big deal to her). Roughly $75K for each of us. I hope to make a some profit from it when we resell it, but fully understand we could lose money on the deal too.
My motivation is (1) make it easy for her to have a nice place to live down there - no deals falling through because of financing trouble (2) make her life a little better - basically she won't have to pay on a mortgage and so she'll have a little more spending money to enjoy life and can preserve her savings (3) the possibility of a modest profit over the lifetime of the deal.
DW is cool with it. As are my siblings. DM and I get along well.
I'm just asking here for any advice from folks who may have done something similar.
I'm looking for any suggestions or things to watch out for.
The details: she moved to Fort Lauderdale last summer and rented a condo for a year to "test drive" living in Florida and see if she could handle the summers. Seems like she can and really likes living there. She's been taking an annual winter trip down their for many years and has friends there.
She's found a nice coop that is about the same size as the condo she owned up north - 2br/2bath in decent shape with a nice view.
Financially she's fine. She has a teachers pension and some modest savings. She's never gotten into financial trouble and lives within her means.
The cost of the coop is roughly the same as her old condo up north. The old condo had a mortgage on it. If she could finance the coop, she could afford the mortgage.
The main issue for her is that coops are rarely financed down there. Banks won't do it (or rarely) although some sellers will finance the sale.
My idea is to not loan her the money, but rather go halves with her. I'd match the money she has from the sale of old condo to pay for the coop in full.
We'd set up an agreement where we own the place 50-50. We each contribute 50% of the full purchase price, then, when it's sold, we split the proceeds. She would be responsible for all other reasonable expenses - taxes, HOA fees, normal upkeep. The same as if she owned it outright. If there is any big changes need to the place (like updating a kitchen, not that this place needs that) that would affect the selling price, we'd both have to agree on it and chip in for it 50-50.
She will have the right to sell when she wants (say when she moves on to independent living or whatever).
After talking with a local attorney down there, the common form for this type of agreement is a trust. We put all the details into the trust agreement.
The money isn't a huge thing for me (though it's pretty big deal to her). Roughly $75K for each of us. I hope to make a some profit from it when we resell it, but fully understand we could lose money on the deal too.
My motivation is (1) make it easy for her to have a nice place to live down there - no deals falling through because of financing trouble (2) make her life a little better - basically she won't have to pay on a mortgage and so she'll have a little more spending money to enjoy life and can preserve her savings (3) the possibility of a modest profit over the lifetime of the deal.
DW is cool with it. As are my siblings. DM and I get along well.
I'm just asking here for any advice from folks who may have done something similar.
