Poll of the Day > Would you buy the house in this scenario?

(+) Yeah! (+)

My uncle has ran into financial troubles, and the bank is repossessing his house. He has offered to sell me the house for the amount remaining on the mortgage, roughly 60% of the current value of the house. In exchange, I allow him to live in the basement suite for "a few years", rent free, while he gets back on his feet.

The price is obviously very tempting, but my lord, this is setting off so many red flags in my head. It's an awkward position, as I don't want to say no, but this seems like I'm setting myself up for a lot of headaches in the future.

Thoughts? Would you help out a family member in this situation?
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One thing I have to say is that in many places, letting someone live in your house for free for even a few months gives them rights that make it hard to get them to leave. After a few years he could just be like nope, not leaving. Then you have to go through the eviction process... Which a lot of people are too embarrassed or lazy to do to relatives. I know that so, so well.

At the absolute least, get everything very very clearly written down and signed. Preferably talk to a lawyer first.
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Make sure you find out what his favorite foods are, in case you have to arrange a poisoning later.


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Dynalo posted...

Thoughts? Would you help out a family member in this situation?

Depends very much on the family member.

Money can really screw up relationships, so you are right to be leery of this.
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Also a lot would depend on the uncle's personality. If he's generally a good and honorable person, maaaaaybe. If he's generally an irresponsible ass, I'd run far away.
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ParanoidObsessive posted...

Make sure you find out what his favorite foods are, in case you have to arrange a poisoning later.

This is why I like you. Always planning ahead.

Moonjay posted...

One thing I have to say is that in many places, letting someone live in your house for free for even a few months gives them rights that make it hard to get them to leave. After a few years he could just be like nope, not leaving. Then you have to go through the eviction process... Which a lot of people are too embarrassed or lazy to do to relatives. I know that so, so well.

At the absolute least, get everything very very clearly written down and signed. Preferably talk to a lawyer first.

Yeah, that's part of the red flags, the legal ramifications of such an arrangement. But then there's the whole issue of getting money involved with family and that can get awful fast.
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Moonjay posted...

Also a lot would depend on the uncle's personality. If he's generally a good and honorable person, maaaaaybe. If he's generally an irresponsible ass, I'd run far away.

He's a good person that makes questionable decisions. Hence our lovely situation here. I do like him, but he's a bit of an odd duck.
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You'd really need to set up specific terms and get everything in writing. There are also a lot of questions that need asking, such as whether he's contributing to the other household expenses (electricity, water, etc). However, it just seems like a bad idea. I guess it comes down to how much you like the uncle and the house.
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Zeus posted...

I guess it comes down to how much you like the uncle and the house.

Ambivalent on both.
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I'm thinking I'll likely have to tell him no, but I'm gonna meet with him tomorrow and chat about it.
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Buy it, don't honor his living in the basement, and then sell the house for a profit.
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MrCool812 posted...

Buy it, don't honor his living in the basement, and then sell the house for a profit.

Yep, that's a risk that he should be considering on his end too.
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Moonjay posted...

MrCool812 posted...

Buy it, don't honor his living in the basement, and then sell the house for a profit.

Yep, that's a risk that he should be considering on his end too.

I'd rather not have my father disown me at the moment <_<
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Dynalo posted...

Moonjay posted...

MrCool812 posted...

Buy it, don't honor his living in the basement, and then sell the house for a profit.

Yep, that's a risk that he should be considering on his end too.

I'd rather not have my father disown me at the moment <_<

Wait until you're ready for him to disown you. Imagine the profit on flipping this house.
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I might. It honestly depends on the uncle. Is he a cool uncle that I'm close too? Or is he one that's a bit of a pain in the ass?

Either way, if I did go through with it I'd make sure to get in writing a maximum time frame for this rent free living situation with explicit details on what will happen once the time has expired. Such as eviction or an option for them to continue living there while paying rent. Also, it would be important to establish what sort of house privileges he might be expecting vs what you would feel comfortable with. Is he to stick to his basement suite? Or does he get to have full run of the rest of the house? Hanging out in the living room, kitchen, food, etc.

These are all things that would need to be discussed and agreed upon before I took him up on the offer.

Also, don't take him at his word as to the integrity of the home just because he is family. Absolutely get it properly inspected. Some states require it. But if yours doesn't you need to know what you're getting.

These things would all be important to maintaining the familial relationship. You wouldn't want any animosity to brew over miscommunication on what is expected.
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Dynalo posted...

I'm thinking I'll likely have to tell him no, but I'm gonna meet with him tomorrow and chat about it.

I've learned from bitter experience that you should never loan family money for any reason because most times they either don't repay it (even if they're supposed to) or it ruins your relationship between you and that relative. I would listen to those alarms and lights going off in your head and walk away from this deal, since it could be financially as well as psychologically detrimental to you and your relationship to your uncle.

I don't know your relationship with your uncle. If it's my uncle I'd just pay it off for him.
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As others have pointed out, the legal waters of letting him live rent free are fraught with problems. Do not let him live rent free on paper, even if you don't enforce your lease to the fullest. Make sure he's on a binding lease with a clear time period (I'd go with the standard year to year). Make sure he's giving you a few bucks here and there, and keep records of it. He's family, but keep this transactional.

The reasons for this are twofold: for one thing it gives you some leverage to remove him if he doesn't shape up, but it also holds him accountable in the near term - he can't just sleep it off for a couple of years and hope everything works. It will actually be healthier for him.
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I met with him today and just told him I'm not interested. Had no desire to open this can of worms.
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Dynalo posted...

I allow him to live in the basement suite for "a few years", rent free, while he gets back on his feet.

Lololol, fuck that guy

Straight up scammer