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Can a relative buy a house with the intention to rent to us and then we take over later?

We would like to own a house but our credit is bad and we are filing bankruptcy. We were wondering if a relative of ours could obtain a house through a loan (we are planning on making the down payments, whether outright or give her the money), rent it out to us, and then when our bankruptcy has been clear for 3 years take over the house in our name? If so how would that work exactly? She also wants to buy a house with her boyfriend of their own soon too. Would she be able to do that if she gets a loan for a house for us? Or if she got hers first would she be able to get a second one for us? This would be an out of state thing too.

Also is there any benefits for her in doing this?
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September 13 2013 - US
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Answers (3)

The drawbacks and benefits of doing something like this, I think, is best answered with input from other experts.  I highly suggest you seek out the advice of your local Realtor as well as a licensed CPA so you can fully understand the financial impacts.

There might be "stuff" (for lack of a better word) there that might make your idea really great, and really bad at the same time.

Unfortunately, I don't think anyone can honesty give you a straight "yes" or "no" answer on this one.
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September 13 2013
If you have bad credit and are filing bankruptcy why don't you spend the next three years fixing your credit and saving $$$ to be ready at the end of the term when the bankruptcy is discharged?  if your relative is planning on purchasing a home with her boyfriend, that is what she should do.  If she were to buy a home to rent it to you, when she decides to purchase another home with her boyfriend her down payment will be larger since it will be her second home.  If I were your relative, I would not do it.  We do not know how much anybody makes, nor do we know the value of the homes you are talking about that has to be taken into consideration too.   
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September 13 2013
Profile picture for wetdawgs
If she has sufficient income and down payments to afford both an investment home (the one she'd rent to you) and her primary home (without counting rental income), then it would be a possibility.     The investment home will require considerably higher down payment than her primary residence.   She should get her own home first.

But, frankly, this is a very very bad idea and could cripple her financially. Do you really want to do that to a loved one?  You already know how awful bankruptcy is, so don't pull her into deep water with you.    Bankruptcy has been caused by some significant  issues with your finances.  It is time to work to get beyond them yourself, not by pulling someone else in the deep end. Put together a strategy to improve your credit but meanwhile rent. 
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September 13 2013
 
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