oneservant
New member
@portal542 Thanks for the reply and for reading the post. Would you be able to explain the extra issues I’m maybe not considering?
Am I wrong to believe that my partner buying a house with his mom, plus getting a van to live in, is a terrible idea?
- Thread starter oneservant
- Start date
@oneservant If your partner wants to avoid legal headaches and possible financial ruin, he needs to talk to a real estate lawyer before doing this. There need to be well-written legal contracts in place. I cannot stress this enough.
Important questions:
Obviously, under no circumstances should you mingle your finances with this person.
Also, has he or his mother ever owned a house before? I own a small house, and we spend an average of about $8,000 a year on maintenance and upgrades. Houses are expensive to own if you plan to maintain them properly.
Important questions:
- Whose name will be on the deed to the house as the legal owner? If it's the rich friend, then your partner is not buying a house, period. If he's not on the deed, he has nothing.
- If your partner and his mom are on the deed, then there will presumably be a written contract governing the loan from the rich friend. The terms of this contract are important. A lawyer absolutely must be involved.
- If your partner is going to be a co-owner with his mom of this house, he needs to look up the laws on real estate co-ownership. This is crucial. Some of the most tragic cases in real estate law are families fighting over co-owned property. It's so easy to say everything will be fine, but things happen. She might become an addict. She might have a mental health crisis. She might find a boyfriend and want to move into the house...et cetera. Talk to a lawyer.
Obviously, under no circumstances should you mingle your finances with this person.
Also, has he or his mother ever owned a house before? I own a small house, and we spend an average of about $8,000 a year on maintenance and upgrades. Houses are expensive to own if you plan to maintain them properly.
oneservant
New member
joshuathree
New member
@oneservant Also, if he is on title you’ll loose all of the programs designed to help you get in the market. Things like the first time home buyers plan to use your RSPs towards a down payment. No FHSA.
This has many downstream implications for YOU should this person stay as your partner and enter this deal.
Private mortgages between friends never end well… this has the potential to go bell up very quickly.
This has many downstream implications for YOU should this person stay as your partner and enter this deal.
Private mortgages between friends never end well… this has the potential to go bell up very quickly.
noturavgguy
New member
@oneservant They don’t sound like they’ve thought any of this through. Make them live in a van in February and see how they like (they won’t). The purchase also sounds sketchy and poorly thought out and based on that I’m not sure they’re thinking of how they would legal protect themselves if something happens. This whole thing is a giant red flag and I’d not want to be involved at all in it. Even if you aren’t involved now, you’ll be brought into it when it inevitably goes sideways. What a headache.
savedbrian
New member
@oneservant What the heck
@oneservant This is a bad idea on a bad idea. I personally think it is terrible for a parent in this day and age to accept that kind of charity from their child.
Living in a van while paying for a house is bizzare and really not an idea. A hour is a lot better and requires care and time that a tenant will never give.
Paying for a house and up keeping a van is the worst of both worlds. FYI, you don’t need a car in Toronto and vans can be hard to park.
How is it that the dead beat mom makes it possible to buy a more expensive house? She does not sound like someone who would qualify as a tenant in most places.
I have a family member who was dating a guy like this, basically successful but paying for his dead best parents to live easy. Don’t let it happen, if he insists, get out!
Living in a van while paying for a house is bizzare and really not an idea. A hour is a lot better and requires care and time that a tenant will never give.
Paying for a house and up keeping a van is the worst of both worlds. FYI, you don’t need a car in Toronto and vans can be hard to park.
How is it that the dead beat mom makes it possible to buy a more expensive house? She does not sound like someone who would qualify as a tenant in most places.
I have a family member who was dating a guy like this, basically successful but paying for his dead best parents to live easy. Don’t let it happen, if he insists, get out!
@oneservant Okay, pretty much everyone has given thumbs fown to your partner's scheme.
Should it actually happen, what are you going to do to not get dragged down into the abyss? You'll be the only one able to treat for special outings, and then he'll start asking for spending money, then bigger loans. And that's just the financial aspect...
Why are you doubting yourself for questioning his very foolish idea? You seem like a giver whose going to end up getting sucked dry.
Should it actually happen, what are you going to do to not get dragged down into the abyss? You'll be the only one able to treat for special outings, and then he'll start asking for spending money, then bigger loans. And that's just the financial aspect...
Why are you doubting yourself for questioning his very foolish idea? You seem like a giver whose going to end up getting sucked dry.
noochandthegoodbook
New member
@oneservant There are a tremendous amount of risk points here.
Could it work out fine? Sure.
Will it? Almost certainly not.
Could it work out fine? Sure.
Will it? Almost certainly not.
@oneservant All that matters in the end is who is on title and who is the lender.
Here’s the best case scenario i can see with what I know.
Mom’s friend is the lender/mortgage holder
(Look up Olympia Trust or similar services to set up private mortgages legally)
Your SO owns the property and is the only person on title. ( use real estate lawyer )
Your mom is a tenant and signs a lease.
In this scenario, SO takes all the responsibility of owning the house, taxes, utility payments, major repairs. And paying the lender every month. (If you miss payments the property will go back to the lender. )
The only problem is if mom stops paying rent what will SO do? Obviously it’s mom you can’t kick her out. But when you do sell in three years just make sure that all the mortgage payments and utilities, “holding costs” that SO puts in are added to the price as an expense, if the real estate climate allows for it in 3 years, sell at the right price and do your best to break even with your holding costs.
All the best.
Here’s the best case scenario i can see with what I know.
Mom’s friend is the lender/mortgage holder
(Look up Olympia Trust or similar services to set up private mortgages legally)
Your SO owns the property and is the only person on title. ( use real estate lawyer )
Your mom is a tenant and signs a lease.
In this scenario, SO takes all the responsibility of owning the house, taxes, utility payments, major repairs. And paying the lender every month. (If you miss payments the property will go back to the lender. )
The only problem is if mom stops paying rent what will SO do? Obviously it’s mom you can’t kick her out. But when you do sell in three years just make sure that all the mortgage payments and utilities, “holding costs” that SO puts in are added to the price as an expense, if the real estate climate allows for it in 3 years, sell at the right price and do your best to break even with your holding costs.
All the best.
collinsdennis30
New member
@oneservant Sounds like a bad idea, but if he goes ahead with it, make sure there are contractual agreements legally binding between him and the friend. Objectively speaking, one doesn't want to get screwed. 'Business and pleasure... What's that saying'? If the independent mortgage % is lower, great, but when dealing with that kind of money, lawyer up still.
Mom sounds like drama, and I'd strongly dissuade this idea, long term relationship wise, that is a red flag IMO, but I don't have all the facts or context of the relationship.
Mom sounds like drama, and I'd strongly dissuade this idea, long term relationship wise, that is a red flag IMO, but I don't have all the facts or context of the relationship.
resjudicata
New member
@oneservant Break up yesterday lol I know it sounds harsh but I’ve been you in the past. Someone capable of being this stupid in this situation will continue to shock you with their stupidity and bad decision making. Sure it doesn’t affect you this time, but eventually it will. Life is too short for this mess and there are other men to date
@resjudicata Maybe there is a man shortage in her neck of the woods or she wants to play "Saviour" LOL
@oneservant I'm not smart enough to know how to setup a legal arrangement that protects your SO from losing it all.
SO needs to seek a lawyer before committing any more time. This lawyer should review all future paperwork, contracts, loan agreements, etc and hold enough influence to advise your SO to back out.
I'd never co-mingle my finances with your SO.
SO needs to seek a lawyer before committing any more time. This lawyer should review all future paperwork, contracts, loan agreements, etc and hold enough influence to advise your SO to back out.
I'd never co-mingle my finances with your SO.
@oneservant
He should think long and hard about property tax, insurance, maintenance costs, mortgage interest... you don't get any returns for many costs of ownership either. And then throwing the cost of a van on top of the house he now doesn't even plan to fully live in and has a questionable arrangement for ownership and payment of?
This whole thing reads as him making poor financial decisions based on emotion then rationalizing it to himself without fully appreciating what he'd be really getting himself into and the risks and costs involved.
If you plan on being with this person in the long run, I'd have a frank discussion about your concerns if this kind of thing were to happen down the road with your lives and finances tied together.
He should think long and hard about property tax, insurance, maintenance costs, mortgage interest... you don't get any returns for many costs of ownership either. And then throwing the cost of a van on top of the house he now doesn't even plan to fully live in and has a questionable arrangement for ownership and payment of?
This whole thing reads as him making poor financial decisions based on emotion then rationalizing it to himself without fully appreciating what he'd be really getting himself into and the risks and costs involved.
If you plan on being with this person in the long run, I'd have a frank discussion about your concerns if this kind of thing were to happen down the road with your lives and finances tied together.
adam02131985
New member
@oneservant Terrible idea. Based on the limited info, sounds like bf is impulsive too (ie jumping from van life to buying a place). Would caution his commitment fully to the plan, especially one that is years long; even if he were to figure it out financially (with how intermingled/messy it is already). Would only assume/predict that he'd regret the decision within a few short years (if not months), want to find some intermingled way to get out of the situation, and find some other 'nifty' idea to latch on to short-term again.
@oneservant This is all terrible. Especially the "living in a van 3 days a week" part. He's going to spend
Does his mom work?
If she is so bad with money, he can't help her by helping her.
He is not remotely in the position to "buy his mom a house" that doesn't also meet his own needs.
If he's buying a house, he needs to buy his own house, for him to live in, and have his mom live with him and charge her rent.
She will never listen to him. She will not control her own soendkng/problems.
He can only be a fallback for her, never just "take care of her" or pay her bills.
Does his mom work?
If she is so bad with money, he can't help her by helping her.
He is not remotely in the position to "buy his mom a house" that doesn't also meet his own needs.
If he's buying a house, he needs to buy his own house, for him to live in, and have his mom live with him and charge her rent.
She will never listen to him. She will not control her own soendkng/problems.
He can only be a fallback for her, never just "take care of her" or pay her bills.
@oneservant You aren't wrong.
He should not pay a dime on a house that doesn't have his name on the title. Owner can sell and walk away with his equity and any increase in value whenever they want.
If you buy a house now and sell it in 3ish years you likely aren't going to make any money and it sounds like he thinks he'd have a sizeable down payment. He won't. Maybe in 7-10 years with a sizeable increase in value but what if the "rich person" dies, a lot can happen in 7-10 years, is the house going to be left to them in a will? Sold so the heirs get the un-paid-for portion, then equity and increase in value go to BF? I can see heirs having a problem with that unless there's some iron clad agreement and paperwork to be signed in front of his own, not the rich person's lawyer.
The person who's name is on the title would have to pay capital gains taxes on the increase in value when it sells to him or anyone and pay other costs and taxes and fees to buy and sell it which they will want to be paid for too. The person on title also has to pay tax on rent collected, someone who doesn't own it can't collect rent and pay tax on the rental income. if BF intends to "keep" the house that he doesn't own and move out while renting it (assuming house with suite for mom?) is the investor going to pay tax on the rental income then keep the rest of the rent to pay themselves for the boyfriend to buy it from them? I don't see how the BF would even need to be involved as a person who somehow profits from that situation or why the actual investor would allow him to be able to profit from that situation, he would get something for nothing. The rich person is probably rich because of shady deals with stupid people.
Keep yourself at arms length.
He should not pay a dime on a house that doesn't have his name on the title. Owner can sell and walk away with his equity and any increase in value whenever they want.
If you buy a house now and sell it in 3ish years you likely aren't going to make any money and it sounds like he thinks he'd have a sizeable down payment. He won't. Maybe in 7-10 years with a sizeable increase in value but what if the "rich person" dies, a lot can happen in 7-10 years, is the house going to be left to them in a will? Sold so the heirs get the un-paid-for portion, then equity and increase in value go to BF? I can see heirs having a problem with that unless there's some iron clad agreement and paperwork to be signed in front of his own, not the rich person's lawyer.
The person who's name is on the title would have to pay capital gains taxes on the increase in value when it sells to him or anyone and pay other costs and taxes and fees to buy and sell it which they will want to be paid for too. The person on title also has to pay tax on rent collected, someone who doesn't own it can't collect rent and pay tax on the rental income. if BF intends to "keep" the house that he doesn't own and move out while renting it (assuming house with suite for mom?) is the investor going to pay tax on the rental income then keep the rest of the rent to pay themselves for the boyfriend to buy it from them? I don't see how the BF would even need to be involved as a person who somehow profits from that situation or why the actual investor would allow him to be able to profit from that situation, he would get something for nothing. The rich person is probably rich because of shady deals with stupid people.
Keep yourself at arms length.
russki9000
New member
@oneservant I see lots of red flags 
that’s a lot of people to commingle money. That’s a hot mess.
that’s a lot of people to commingle money. That’s a hot mess.choosejoy22
New member
@oneservant Ex-boyfriend once he told you that plan hopefully.