How can we do this? He buy mine and I buy the neighbors.?

Question

My neighbors house is for sale. I want it.

They are selling it for what I owe on my house (they're desperate). My dad wants to buy my house and wants to pay cash.

My question is what is the best way to do it?

I was thinking he buy the neighbors house out right, I live in it, but pay the mortgage in the house I Will still own but HE live in. I want to do that so we don't have another finance cost, plus the cost of 2 more title searches and processing. I just bought my house 3 years ago.Would this work?

Any suggestions?

Answer 1

.   It works perfectly.  The cash makes it possible.   A lender would cause problems because they wouldn't "understand" the living arrangement.

Answer 2

It seems like such a terrific idea but I don't think you should do it for two reasons.

First, for the purposes of taxes and insurance each property would be treated as a rental property for the owner and as a rented property for the one living there, causing all kinds of problems.  You must be living in the home you own to get Homestead exemptions if your state offers them), and rates for rental properties (which yours would technically be even of no rent were being charged) and not property appraisers are setting up hotlines to encourage people to turn in those cheating the system.

You'd have a problem with insurance, too, because you and your Dad would each have to have 2 policies on each home - one as the owner and another as the "renter".  You can only get a regular homeowners policy if you actually live in the home you own.  Otherwise if you were to have a claim they could deny coverage and/or charge you with insurance fraud.

Second, what if either of you want to move one day?  Or if either you or your Dad were to get really ill,  die or become estranged for some reason you'd have huge legal and tax issues on your hands.  Really, a huge, very expensive headache.

You will be much better off, and in the long run probably save money, by selling your house to your Dad and buying the neighbor's house.  Your Dad may be able to skip the title search because he's paying cash.  If you have a mortgage you will definitely need one, though.  You can perhaps get title and closing agents to give you a break considering you can bring them 2 transactions...

Best of luck!

Answer 3

It will work to the degree that plans don't change.  He will own the house you live in and you will own the one he lives in.  When/if either of you wants to move someday,..........