Profile picture for goblueandmaize

In-law investing

How can an in-law invest in a property that will be owner occupied by their child's family without being on mortgage? 

Also, where can i find a discussion of issues associated with being on the title and not mortgage?
  • July 17 2009 - Berkeley
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Answers (3)

Sounds like your spouse's family is going to put some money up for you to purchase a home. 

If it is a straight loan then you can use the money to purchase the home (with or without a loan) and record a TD against the property and you will probably make I/O payments.  The in-law won't quite be on title, but they will have a lien on the property.  If you sell then they will have to be paid off and if you fail to make to make payments they can foreclose.

If it is an equity investment loan and they are going to share the profits of the property then you can add them to the title as joint tenants (equal ownership) or Tenants in Common (if it is not equal ownership); the title will literally say the percentage of ownership.  Or you can put it into an LLC and divide it up that way.

Just be sure to note the loan amount and if they get that amount before the profits are split and the percentage that is split.

  • August 17 2009
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Profile picture for real estate mike
board certified real estate attorney. Your actions depend on your desired outcome. Remember when pooling money with family, even if you lose money or break even when expecting profit, they're still family. Know the downsides going in. best of luck to you!
  • July 17 2009
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Profile picture for wetdawgs
One can be on the title without being on the mortgage.  However, I'd recommend  legal documentation (using a real estate attorney) to support how the money will be split and obligations for mortgage etc.  as time passes.

  • July 17 2009
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