My husband and I live in a house that my dad owns. We have been renting it out for the last 5 years at a very discounted rate (which we are very grateful for).
My dad has a $900,000 bank loan that needs to be paid off which he has known about for a year. He has tried to get in touch with the bank to refinance but he’s had no luck. He is being forced to pay the loan in the next few months. He is comfortable financially, but is just in a bit of a rut with this particular loan and can’t/doesn’t want to really sell anything other than the house we currently rent.
My dad has mentioned a few times that we could purchase the home at below market value. We would definitely like to but feel quite pressured to purchase it in a short amount of time because he needs the funds to pay off his debts. We understand we will be receiving a discount but it seems there are terms attached; he wants my husband to work at his office to reduce his workload so he can work less to reduce the capital gains tax (we don’t think it’s a good idea to mix family and business) and he has now asked for an extra $150,000 on top of the original price only in the last 2 weeks because he needs more to cover his debts. On top of that, because the bank loan needs to be paid very soon, he has asked for $100,000 from us to help him pay off the loan, which will then be used as a “deposit” on the home. We don’t feel this is a great idea unless it is legally binding and we are absolutely guaranteed to purchase the home.
My dad is full of ideas and can be extremely confusing with his plans- unfortunately he doesn’t seem to ask our opinion on what works best for everyone, but rather tells us what the solution is and we just have to go along with it. It feels quite emotionally manipulative, like we owe him.
This creates a lot of tension because we like to do our own research rather than jump in blindly. Is it unreasonable for us to not give him the $100,000 he’s asking for after he’s helped us with low rent and will hopefully sell us the house at a below market value?
Parent asking for help with loan
byu/Lumpy-Fact3729 inpersonalfinance
Posted by Lumpy-Fact3729
17 Comments
It’s reasonable for you not to do things you aren’t comfortable doing.
You might consider not renting from him at all discount.
I would work on accepting that saying “No” does not mean you are unappreciative nor does it mean you love father any less than before.
You and everyone else knows the answer to this question.
I don’t think I’d agree to this, and if he really needs the money I’d consider cutting all financial ties and moving out. I know that’s easier said than done though.
Stay away from Dad’s financial situation. You and your husband can’t do enough to pay Dad’s
$900k balloon payment.
Consider moving out of the house so Dad can list it to sell. This could help Dad while keeping yourselves at arm’s length.
How does one get into a “rut” with a loan? Your dad has undisclosed financial problems and wants you to bear the responsibility of his decisions.
If the terms keep changing i would
walk away. 100k also covers a lot of rent and even at a discount youd have yrs of renting to actually make up for it some where else.
Your dad might very well have more issues than hes admitting to as well. If you do buy talk to an attorney or the very least a closing/title company
It’s reasonable to not want to buy the house, especially given that it comes with some conditions like paying a bunch of front and working at his business.
This is messy and family related. Never mix finances with family. When it makes you feel uncomfortable time to make some changes. If you’re not ready to buy, move. Let him sell it on the open market and get fair market value for the sale.
If you’re going to purchase the home consult a real estate lawyer. Yes it will cost but it will be likely be cheaper than a real estate agent. Make sure all the terms are laid out prior to consulting as going back and forth with any legal office will cost you for each email and phone call or text message.
If you have $100k to “give” either use that to rent elsewhere or put a down payment on a different house and move out so he can sell it for market value and pay off more debt than what he’d get for selling it to you under market value. Else he’ll have something to hold over on you and potentially come back for the remainder of the market value at a later date when he has more repayment deadlines.
If you do move forward with purchasing, make sure there are no liens on the home before there is ANY money handed over.
If he is was unable to finance the house himself to get 900k out, and pay off a different loan, I would be worried about the asset in question.
“Act now”, without being given time to think, is the first sign of a scam.
PS, if he’s anything like my folks, he will accept no other plan than his own.
This is actually not a financial question… and financial suggestions won’t help you.
Set some boundaries before you get pulled into a situation you can’t get out of.
Don’t let him guilt trip you. You paid rent for five years, and he’s gotten a tax break on that property. It’s a two-way street. You don’t owe him anything.
Move.
This house is coming with strings, time for you to disassociate family and business.
Renters/landlord is a business.
Let your dad sell the house to disinterested party for market value.
Move out, let him sell at market value