I’m getting right to the point this time. My brother’s best friend needs to sell some investment property in another state fast (he needs the cash). So he’s willing to sell it to me for his purchase price and the cost of fixing up the place. It would be about $25K (he purchased it as a foreclosure from the bank during the height of the recession so he got a steal). He already has a tenant in the house that receives assistance (she has terminal cancer) on the rent so 75% of the rental income is guaranteed as long as she lives there. The problem as you might know is that I’m not sitting on $25K.
It’s the price of a car but I’m not willing to take on that loan from a bank. I’ve done the math and the house will pay back the $25K in almost 4 years assuming an 80% occupancy rate. After that it’s an income producer or possibly when the housing market recovers some I would be able to sell it for a decent profit.
Here are my options:
- Take a 401K loan.
- Purchase the home 50-50 with my mom (mommy wants retirement income that’s not SS related)
- Use a mixture of borrowed 401K money and borrowed money from mom
- Walk away
I know that there will be additional expenses including maintenance, insurance and taxes which I’ve factored into the repayment period. I still think that it’s a decent opportunity but I also know that I should be focusing on paying off my bills. I’m seriously torn on what to do here. I need to make a decision pretty quickly (within a week) so I can’t sit on this fence too long before it’s sold out from under me. I’m afraid that I’ll just be throwing money away. If I don’t do this I can always consider buying gold online and waiting for the price to skyrocket. What to do?