Helping Your Adult Children Buy Real Estate

My husband wishes to get our 4 kids a start with equity. The oldest kid is close to buying a house, though one isn't picked out yet. He's thinking about a duplex to help pay the mortgage. My husband want to help buy 1/2 of it, breaking that 1/2 of it up into the 5 shares that represent the rest of the family. There are so many different situations that I can think of that could complicate this set up.


Two kids are starting a business together, but there is a stronger feeling of them going in their own directions, who knows? I need to see a better/simpler concrete plan to go about this. It will probably hurt our retirement, whatever. How would you set this up?

Laura from Ontario, Canada

December 4, 20080 found this helpful

You should enlist the help of an attorney.

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December 5, 20080 found this helpful

Definitely agree with prior post! Get a good attorney and a financial adviser for yourselves regarding your long-term retirement needs.

Perhaps you may want to consider a trust fund, or look into it as an alternative. Also, as long as the kids have good credit, then getting a home loan shouldn't be too dificult with good equity down. I believe this is an excellent time for first-time buyers with strong equity. But location and loan structure are very critical.

My parents permitted so much money for each child to use towards a dwn pmt on a home. Their attorney handled all the details and stipulations. The stipulations were in our (us kids) best interest.

But I am a strong believer right now that middle-aged parents with grown adult children need to allow themselves to worry about themselves for a bit. You all have far less time ahead of you to recooperate from this economic chaos! Everything and I mean everything is too volatile right now.

So remember its ok to think of yourselves first. Consider what you need immediately and in the long term before dishing out the big bucks and by all means do not take on any risk if you move forward with your plans to help them. That's where the attorney will be most helpful.

Good luck!

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December 6, 20080 found this helpful

Please don't spend your retirement money on your kids. If you put your retirement at risk you'll just end up needing support from your children later. In the end you won't be doing your kids any favor.

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December 14, 20080 found this helpful

I am a mortgage banker and have been in lending and real estate for years. I can't think of a WORSE decision for your husband to make. On the surface it sounds like a good idea, help out, invest, make profit in the future...etc. But, by breaking your 1/2 into 5 shares, if and when your son wants to sell, you would ALL have to agree on timing and price. So, as they say, too many cooks spoil the broth.

I see nothing but family disaster looming with this plan. Also, if for any reason your son has a business reversal and can't hold up the end of his payments on the house, your retirement might be jeopardized. If a tenant moves into the duplex and doesn't pay rent on time, you will be stuck for that expense. Last, but not least, the residential housing market has imploded.

So, unless you could get a FANTASTIC bargain and be prepared to sit on it for a LONG time, until the market turns around, I see more disaster. Don't mean to burst your bubble or sound so negative but I feel, as a professional, that you might want some free advice. We all know what that's worth....hahahaha but in this case it really is valuable. Hope it helped. :)

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