Browse Forums General Discussion 1 Aug 02, 2009 7:32 pm hi guys! i joined a while ago but disappeared again when we decided to hold off building for a while. well now my mother-in-law has proposed that we buy or build something together - she wants an investment property and to help us out. we havent discussed it at great length yet but basically we would go in halves, we would live in it and she would just have it as an investment, then in 5 yrs or so we could either buy her out, or sell it. so my question is...is this a good idea? does anyone have any experience with it? id like to hear different ideas and opinions coz i dont really know what to think! i know we wouldnt get the first home-owners for it, which is something to consider, but it also means we could get a house now as opposed to 2011ish when i have finished uni thanks for your input! Re: buying/building with family?? 2Aug 02, 2009 7:42 pm sounds like an offer to good to refuse... Depends on how you do it, but pretty sure you would still get the fhog for your part. Talk to the bank or ring the office of state revenue. hope this helps.. lw http://buildingfraser251withcoral.blogspot.com/ Lw http://buildingfraser251withcoral.blogspot.com/ 20th May 09 Signed contracts for land 24th June 09 Land settled today "I own some dirt" 16th Aug 09 Signed Contract 20th Nov 09 Site Start 15th Jan 10 Bricks started Re: buying/building with family?? 3Aug 02, 2009 8:02 pm Get it all in writing and lodge it... Make it legal CYA is best (cover your *** et!) Where you are coming from is where you are going to... Re: buying/building with family?? 5Aug 02, 2009 8:30 pm Our parents are helping us with this house in a similar way. We're making the repayments (because, despite what the banks say, we can actually afford it, especially given we're pretty much paying the same amount in rent ) but Mum and Dad are going to co-sign the loan from the bank (or whoever they choose). This serves two purposes. One, we get our house and Two, they feel involved. And I suppose a third is that I know I'm not being duped by anyone because my Dad is pretty cluey about all this. But my point was that even though my mortgage will be in four names, the house title only needs to be in mine and my husbands name. So I'm sure you could do the same thing, and get the FHOG. So far the plan is in 5 -7 years time to sell, we'll give them some of the profits (assuming we make money) to Mum and Dad, mostly as a thank you, and then use the rest to fund a bigger house for us. I am struggling with a "legal document" as such, because Dad keeps telling me that he expects us to pay the repayments in full (as he should) and therefore this whole shannigan shouldn't actually cost him anything, meaning he doesn't want anything when we sell. Anyway, maybe talk to a mortgage broker about your options regarding the FHOG and go from there! ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: buying/building with family?? 6Aug 02, 2009 9:44 pm We are doing it exactly the same way as you Daisy, hubby and I are going 50/50 with my parents we will live there and pay "rent" (effectively, both halves of the mortgage) in 5 years we will buy out my parents. They get an investment and we get our first house. Win/Win The only extra advise I have is to be patient and make sure that you get a house that you can live in, I find my parents focus too much on the investment part of the deal, and forget that I have to actually -live- in the property Building Malvern Springs - Ellenbrook - WA Commodore Homes The Renegade (with variations) Re: buying/building with family?? 7Aug 02, 2009 11:00 pm We're also building with my MIL, but she will actually be living with us. We're building a 3 bedroom house for us, with a 2 bedroom flat at the back for her. She's by herself, and we wanted her close, and this seemed the best idea for all of us. She sold a property to fund about 20% of the overall costs, and we've come up with a design where we only share the laundry and yard. Our blog: http://20percenthouse.blogspot.com/ Re: buying/building with family?? 8Aug 02, 2009 11:33 pm cleoj - sounds all fine and dandy, now. Just be clear about everyones understanding of the whole thing. If it is difficult to put pen to paper then the courts will have a similar trouble. Better it is out for comment there is more chance of knowing possible issues and resolving them. Just remember if you want to do something down the track and don't get 100% agreement it won't happen. It has recently cost us $500k+legals(SC of WA) after 28 years, to buy back our property that we paid $140k+maintained+rates+buildings etc etc. Just a coupla bobs worth for free Where you are coming from is where you are going to... Re: buying/building with family?? 9Aug 02, 2009 11:53 pm Personally, its not something I would do. But others are doing it and obviously its working out well for them. This is something personal and I dont think anyone can really advise you on it. Good luck Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: buying/building with family?? 10Aug 03, 2009 6:56 am Bam Personally, its not something I would do. But others are doing it and obviously its working out well for them. This is something personal and I dont think anyone can really advise you on it. Good luck +1..... very good advice here. Re: buying/building with family?? 11Aug 03, 2009 3:22 pm This is sorta what I am doing. My dad let me and my sister pick one investment property he has and said we can build a Duplex on it. Or he would buy each of us land out in the West and we can build a project home on it. We chose to build an architectually designed Duplex near where we already live. Basically my dad 100% owns the investment property so my sis and I won't be paying anything for that. We got to design each side of our Duplex (anything we wanted, I have pool and sis doesnt, each side is completely different etc) and basiclly we have to pay for some of the building costs which is looking to be about $250k each as my dad is paying for architect and many other things. He is putting up some units for collatoral coz I don't have a f/t job yet (still at uni) and I will pay my half with my bf as soon as we have the loan! We will not be selling it but each side will be worht over 670k atleast once its built. Ovbiously it's not as easy as it sounds like but the accountant will tell the best way to do it all. I know not many people would go into building with family, but I'm getting a good deal and will have it paid off by the time I'm 24 I'd imagine. FYI my dad and my grandfather 'pooled' their money when he started working. They bought properties and paid them off (back then they were cheapppppppp) and kept on going and going and going! DA approved Waiting on a few more Builder's quotes. Re: buying/building with family?? 12Aug 03, 2009 4:37 pm mandy - that sounds awesome! Glad to hear some happy stories about going into property with family help. I'm sure there are lots of good stories, but its not always easy to find them! ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: buying/building with family?? 13Aug 03, 2009 5:02 pm True *frosty* true... My intention was not to scare or worry anyone, just to point out the possible issues if it went southward. I must say if you have a look in the court lists there are many of these situations gone bad, but I have no idea out of what number. Most don't get to court (supreme court) as mediation is more expediant and also part of the process. I trust all goes well Where you are coming from is where you are going to... Re: buying/building with family?? 14Aug 03, 2009 5:06 pm Bam Personally, its not something I would do. But others are doing it and obviously its working out well for them. This is something personal and I dont think anyone can really advise you on it. Good luck Agree. Personally I wouldn't do it either. I also agree to make it legal. Sit down with the family and work out what you want before you even start and stick to it. Arguements over money have done many families in. Re: buying/building with family?? 15Aug 03, 2009 5:16 pm This was the purpose of my post shanec, ...and to prevent such an ugly thing from degenerating into WAR because it can If someone promises you something why not make it legal onc Where you are coming from is where you are going to... Re: buying/building with family?? 16Aug 03, 2009 6:10 pm Again as multiple people have already posted, I also wouldn't do it, but it may work out for you. Personally, I think theirs always hidden fine print in every business transaction with family that may not be known for years to come. Re: buying/building with family?? 18Aug 03, 2009 7:31 pm Yeh backfired on US... Cruising along 28years la da dah... oh BTW get out of my house But but but we paid, we toiled, we worked and we got shafted... BIL is all good though, left his Mum and has gone to Thailand with the cash Have a look at a book called 'rich dad, poor dad' Lazy = nasty a free lunch for childhood will bring the worst out of anyone. Sometimes blood is no thicker than used beer, well in my DWs family, Dear FIL must have 'spun like a top' in his grave top bloke that one. Having said all that, I have had a different philosophy with our kids. 1 at 20(now) knows the stress of buying a house, and the pleasure of an investment property. I guided, not gave. She also has a bub, and a hardworking BF who listens. Don't take this as anything other than information. Nor as how it will turnout, just a heads up we wish we had, had. onc sorry for the rant... I vowed not to mention again as I am sure it will bore some ppl. Where you are coming from is where you are going to... Re: buying/building with family?? 19Aug 03, 2009 7:46 pm im building with my sister, we are both single or in loose relationships, we are in our mid twenties. One of the problems we will face is what we do when one of us moves out or gets married, but could be turned into a rental very easily. One of the positives include our incomes wont go onto a 1 income family, and the great benefit imho is protection of the asset against defacto/marriagr break up Re: buying/building with family?? 20Aug 03, 2009 7:56 pm We had an investment unit for 6 years and then we sold it to our son - I realise this is not quite the same as situation of OP but it is a "business transaction" between family members. There was no "hidden fine print" and we did not gain any wealth from this - market was good at the time and we sold it to him for around 30k under market value. We knew this and this was our choice. However we thought it was best that we have no ongoing financial obligations and so he took out a loan with a bank and the house is now fully his (subject to mortgage and FHOG conditions of course) and so there can be no comeback in the unlikely event we have a family fall out. 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