Originally Posted by Booo
I wasn't looking at the equity in my house as being tied up. I was looking at it as diversifying in real estate.
I'm confused about the diversifying, I thought that you want your son to repay what equity you have in the house as of now, and that any future gains would go to your son. How is that diversifying in real estate, the most you are getting from the house is the equity you have as of now, there is no gain possible for you. If your son takes a note and repays you equity only over a period of years that's a no interest bond...as opposed to get the equity out in one shot now and investing it somewhere.
As a parent it's wonderful to help your child get a good start,he is pretty young to settle down to home ownership as a single guy. Can't you just sell the home, invest the proceeds and see if you can help him out with a down payment further down the road?
My thought was I'd get my equity when he sells the house. Could be 2, 10 or 20 years from now. I don't have any other investments that have a guaranteed return so I don't have a problem not making money on this one. This way he gets a low monthly mortgage payment (on $70,000) and doesn't pay a penny to me for the equity (the new owner does) and I don't have to 'help him down the road'.
On paper he's a single guy. In reality he's been seeing the same girl for 6 years and they had a baby last year and got their own apartment. Last year he was a full time student and part time worker and athlete. This year he's working full time and going to school for a masters degree. His girlfriend works at a dentist office and the dentist is paying her way through school while she works for him. Her mother is a doctor and offers financial help and help with the baby. They would like to move out of the Ohio River Valley before my grand daughter goes to school. They will rent to own for a couple of years and we will go from there.
I'd like to thank everyone for their advice.