Finance a $28,000 house for Brother?

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UTgrad
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Re: Finance a $28,000 house for Brother?

Post by UTgrad » Sun May 20, 2018 3:06 pm

It's all about lifestyle, whats livable for some may not be for others. My annual expenses when I lived there were probably 15-18k per year fam of 3 I have now upgraded my lifestyle to a whopping 36k fam of 4 :shock:
Once mortgages are paid I could drop it back down to 18k.
Last edited by UTgrad on Sun May 20, 2018 3:59 pm, edited 1 time in total.

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Re: Finance a $28,000 house for Brother?

Post by LadyGeek » Sun May 20, 2018 3:58 pm

This thread is now in the Personal Finance (Not Investing) forum (financing a home).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

mnnice
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Re: Finance a $28,000 house for Brother?

Post by mnnice » Sun May 20, 2018 8:04 pm

UTgrad wrote:
Sun May 20, 2018 1:34 pm
https://www.trulia.com/p/tx/brownsville ... 2071564852

Here is a link to the house I used to live in for those who think a 20k or 30k house doesn't exist or must be condemned.

The owner never made a repair in the years I lived there. Property taxes are 400/yr or so, and insurance must be dirt cheap as well.
My idea of cute is not the same as everyone but I think it has appeal. If it is was in SE Portland or somewhere hipster it would be a tiny house :mrgreen:

mxs
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Re: Finance a $28,000 house for Brother?

Post by mxs » Sun May 20, 2018 8:58 pm

student wrote:
Sun May 20, 2018 2:19 pm
UTgrad wrote:
Sun May 20, 2018 1:34 pm
https://www.trulia.com/p/tx/brownsville ... 2071564852

Here is a link to the house I used to live in for those who think a 20k or 30k house doesn't exist or must be condemned.

The owner never made a repair in the years I lived there. Property taxes are 400/yr or so, and insurance must be dirt cheap as well.
On the same page, they have a link to https://www.trulia.com/p/tx/brownsville ... 1123878737 :shock:

Wide range of prices.

Thanks for sharing.
I ran a search in my area for a minimum 5 bed 5 bath and found properties as high as 1.8M and as low as 35k (technically 6 bed 4.5 bath) https://www.maloofrealty.com/listings/l ... -peoria-il

It is all about condition, location, and size of lot.

I did another search for minimum 1 bed 1 bath at $5k or less and this came up...https://www.maloofrealty.com/listings/l ... -peoria-il

UTgrad
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Re: Finance a $28,000 house for Brother?

Post by UTgrad » Sun May 20, 2018 9:10 pm

You like that one you'll love where my wife used to live it was/is probably valued at less than 5k. I actually can't find a value for it but it's way smaller maybe 200sqft max and in bad condition, yet she lived there with her mom& siblings.

Property taxes hmm probably 100 a year insurance probably none. Repairs maybe 100 a year. I'll show it if someone asks. Is it condemned? Nope, I'm sure someone lives there now paying 150 a month.

At least we can say we came from humble beginnings :happy

Herekittykitty
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Re: Finance a $28,000 house for Brother?

Post by Herekittykitty » Sun May 20, 2018 9:30 pm

UTgrad wrote:
Sun May 20, 2018 2:18 pm
I have suggested moving somewhere that has better prospects, but I guess he is worried that without education he would just get another low-wage job and have more expenses.
It looks like he has a reason not to do anything that would move him forward. Including the things you did that moved you forward.

Stuck in the ditch and not climbing out.

He could benefit from your example and advice. Not from your pocketbook.
I don't know anything.

lotusflower
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Re: Finance a $28,000 house for Brother?

Post by lotusflower » Mon May 21, 2018 12:38 am

Raymond wrote:
Sat May 19, 2018 10:21 pm
Whatever you do, please do *not* co-sign for anyone's loans - you will be left holding the bag.

I don't care if it's your brother or your buddy who saved you over Macho Grande.

Give a gift of money (not a loan, as you're not expecting to be paid back), but don't co-sign a loan.
Just curious, is there much difference between gifting the money and co-signing and then having to assume the payments? Isn't the net loss with interest about the same, as long as you can keep from getting too mad about it?

student
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Re: Finance a $28,000 house for Brother?

Post by student » Mon May 21, 2018 5:14 am

mxs wrote:
Sun May 20, 2018 8:58 pm
student wrote:
Sun May 20, 2018 2:19 pm
UTgrad wrote:
Sun May 20, 2018 1:34 pm
https://www.trulia.com/p/tx/brownsville ... 2071564852

Here is a link to the house I used to live in for those who think a 20k or 30k house doesn't exist or must be condemned.

The owner never made a repair in the years I lived there. Property taxes are 400/yr or so, and insurance must be dirt cheap as well.
On the same page, they have a link to https://www.trulia.com/p/tx/brownsville ... 1123878737 :shock:

Wide range of prices.

Thanks for sharing.
I ran a search in my area for a minimum 5 bed 5 bath and found properties as high as 1.8M and as low as 35k (technically 6 bed 4.5 bath) https://www.maloofrealty.com/listings/l ... -peoria-il

It is all about condition, location, and size of lot.

I did another search for minimum 1 bed 1 bath at $5k or less and this came up...https://www.maloofrealty.com/listings/l ... -peoria-il
Thanks for sharing.

ponyboy
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Re: Finance a $28,000 house for Brother?

Post by ponyboy » Mon May 21, 2018 6:34 am

golfCaddy wrote:
Sat May 19, 2018 4:18 pm
I didn't know you could buy a $28k house, which didn't need to be condemned. If a $28k house in decent condition exists, a compromise is you buy the property and rent it back to him at zero profit. That should limit your downside, as you own the property, and be cheaper than $600/month for him.
You've never been to a depressed once upon a time coal region. This city is about 15 miles from where I live.
https://www.realtor.com/realestateandho ... n_PA/sby-1

You can buy homes there for $5k...a $25k house is pretty decent in that area.

nordsteve
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Re: Finance a $28,000 house for Brother?

Post by nordsteve » Mon May 21, 2018 6:49 am

Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617

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dm200
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Re: Finance a $28,000 house for Brother?

Post by dm200 » Mon May 21, 2018 10:00 am

Just curious, is there much difference between gifting the money and co-signing and then having to assume the payments? Isn't the net loss with interest about the same, as long as you can keep from getting too mad about it?


When you "cosign":

1. It will go on your credit report as a debt obligation.

2. If payments are late (and you are not notified so you can make them on time), your credit takes a hit.

3. if the borrower defaults, you could be required to pay late charges, fees, etc.

wolf359
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Re: Finance a $28,000 house for Brother?

Post by wolf359 » Mon May 21, 2018 11:08 am

I recently read "The Great Depression - A Diary" by Benjamin Roth. In it, he keeps copious notes, including the prices of real estate in his area of Youngstown, Ohio. He lists both addresses and prices.

Interestingly, many of the houses still exist, for the same price.

A house in a depressed area only roots you to the area. It makes it difficult to move, and it won't provide the traditional benefit of locking your housing costs while preserving your equity at the rate of inflation.

I'm not sure helping him will help him in this case.

Glockenspiel
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Re: Finance a $28,000 house for Brother?

Post by Glockenspiel » Mon May 21, 2018 11:15 am

nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
Yep. I grew up in a rural MN town where farming is the biggest industry. I lived in a town about an hour south of this house, and that 1940s house sold for $30,000 in the year 2000. It had 4 bedrooms (only 3 were legally considered bedrooms, and 2 bathrooms on 1/5 acre yard. It was in decent condition, condition similar to most other homes in the town. Town of a few thousand people that I loved growing up in.

My brother bought his first house in that same rural Minnesota town back in the mid 90s for somewhere around $14,000. Small house, 2 bedrooms 1 bathroom, but also livable condition. It was one of the smallest homes in town, but in decent enough condition to live in.

alex_686
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Re: Finance a $28,000 house for Brother?

Post by alex_686 » Mon May 21, 2018 11:26 am

Watty wrote:
Sat May 19, 2018 3:57 pm
As I recall many lenders do not make mortgages for less than about $75,000(???) because a lot of their costs are the same for a $75K loan or a $750k loan so they would rather make fewer large loans.

I have not done it but it is apparently possible to buy a house with a home equity loan at some place like a local credit union instead of a conventional mortgage. That could allow him to get the loan for the relatively small amount. The house will likely need to be in livable condition. Here are some sample rates at a credit union for home equity loans.
I will second that. There are a host of issues with a loan this small. The fixed costs associated with a mortgage - home appraisal, mortgage registration fee, etc. may well double the effective interest rate. Some CUs and banks will do a second mortgage as a first mortgage because of costs, others won't. Houses of this value often have issues. Appraisers will find code issues, many institutions will on extend loans on conventional housing, so no modular housing, dome homes, bale homes, etc.

This will come down to family dynamics. What would be the dynamic between you two if he could not pay it off? Conventional financing won't work. If you do this I might suggest that you buy the place for cash and then turn around and offer him a contract-for-deed.

Dottie57
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Re: Finance a $28,000 house for Brother?

Post by Dottie57 » Mon May 21, 2018 11:30 am

Glockenspiel wrote:
Mon May 21, 2018 11:15 am
nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
Yep. I grew up in a rural MN town where farming is the biggest industry. I lived in a town about an hour south of this house, and that 1940s house sold for $30,000 in the year 2000. It had 4 bedrooms (only 3 were legally considered bedrooms, and 2 bathrooms on 1/5 acre yard. It was in decent condition, condition similar to most other homes in the town. Town of a few thousand people that I loved growing up in.

My brother bought his first house in that same rural Minnesota town back in the mid 90s for somewhere around $14,000. Small house, 2 bedrooms 1 bathroom, but also livable condition. It was one of the smallest homes in town, but in decent enough condition to live in.
Another rural Minnesota story.

My mom grew up in SW MN. Her grandparents lived next door in a house built by her grandfather (carpenter) for 2 to 3k. The house sold for about 20k 10 years ago.

He House was beautiful with large square rooms, the biggest bathroom I had ever seen, 4 bedrooms , beautiful dark woodwork and crystal doorknobs. I thought it was a mansion.

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dm200
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Re: Finance a $28,000 house for Brother?

Post by dm200 » Mon May 21, 2018 11:37 am

Another "idea" - all you can lose is your money :)

if you have the cash, go to a credit union where BOTH of you are (or can be) members. Deposit the $28,000 in savings (or perhaps Certificates/CDs) and have brother get a "share secured" loan with your savings "pledged" on his loan. As he pays down the loan, YOUR funds become available. This will not show on YOUR credit report. He is a bit more likely to pay the credit union than you.

Also, require HIM to purchase credit life and credit disability insurance on the loan so that if he becomes disabled or dies, the loan will be paid off.

Maybe he could get his own loan for a part of the $28,000 and this "share secured" loan could be for the other part.

Glockenspiel
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Re: Finance a $28,000 house for Brother?

Post by Glockenspiel » Mon May 21, 2018 11:41 am

Dottie57 wrote:
Mon May 21, 2018 11:30 am
Glockenspiel wrote:
Mon May 21, 2018 11:15 am
nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
Yep. I grew up in a rural MN town where farming is the biggest industry. I lived in a town about an hour south of this house, and that 1940s house sold for $30,000 in the year 2000. It had 4 bedrooms (only 3 were legally considered bedrooms, and 2 bathrooms on 1/5 acre yard. It was in decent condition, condition similar to most other homes in the town. Town of a few thousand people that I loved growing up in.

My brother bought his first house in that same rural Minnesota town back in the mid 90s for somewhere around $14,000. Small house, 2 bedrooms 1 bathroom, but also livable condition. It was one of the smallest homes in town, but in decent enough condition to live in.
Another rural Minnesota story.

My mom grew up in SW MN. Her grandparents lived next door in a house built by her grandfather (carpenter) for 2 to 3k. The house sold for about 20k 10 years ago.

He House was beautiful with large square rooms, the biggest bathroom I had ever seen, 4 bedrooms , beautiful dark woodwork and crystal doorknobs. I thought it was a mansion.
One of my best friends grew up in a house like this. 1911 historic house, 5 bedrooms, beautiful coffered ceilings, grand central staircase with intricate moldings, crystal doorknobs, very wide, dark trim, large built-in woodwork, entire house built with brick, enclosed front porch swinging chair, 3 stories tall plus a finished basement. Granted, it's probably worth $200,000 right now, but 30 years ago, I bet it was only worth about $100k. It was certainly the grandest home in town when it was built, and formerly housed a funeral home and an optometrist office.

student
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Re: Finance a $28,000 house for Brother?

Post by student » Mon May 21, 2018 11:43 am

dm200 wrote:
Mon May 21, 2018 11:37 am
Another "idea" - all you can lose is your money :)

if you have the cash, go to a credit union where BOTH of you are (or can be) members. Deposit the $28,000 in savings (or perhaps Certificates/CDs) and have brother get a "share secured" loan with your savings "pledged" on his loan. As he pays down the loan, YOUR funds become available. This will not show on YOUR credit report. He is a bit more likely to pay the credit union than you.

Also, require HIM to purchase credit life and credit disability insurance on the loan so that if he becomes disabled or dies, the loan will be paid off.

Maybe he could get his own loan for a part of the $28,000 and this "share secured" loan could be for the other part.
smart!!!

mouses
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Re: Finance a $28,000 house for Brother?

Post by mouses » Mon May 21, 2018 12:22 pm

UTgrad wrote:
Sun May 20, 2018 1:34 pm
https://www.trulia.com/p/tx/brownsville ... 2071564852

Here is a link to the house I used to live in for those who think a 20k or 30k house doesn't exist or must be condemned.

The owner never made a repair in the years I lived there. Property taxes are 400/yr or so, and insurance must be dirt cheap as well.
Hard to tell what that is like without photos of the inside, but there is room for a big vegetable garden and fruit trees.

mouses
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Re: Finance a $28,000 house for Brother?

Post by mouses » Mon May 21, 2018 12:27 pm

nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
I could live happily in that house. I clearly live in the wrong state.

snowman
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Re: Finance a $28,000 house for Brother?

Post by snowman » Mon May 21, 2018 12:42 pm

DanMahowny wrote:
Sun May 20, 2018 11:15 am
Western PA, WV panhandle, Eastern Ohio.

My high school buddy buys rental homes there. Never paid more than $10k.
My wife grew up in the area back in the 50s-70s. It was a solid lower-middle class area, with most men working in steel mills and mines (women were generally stay at home moms). All those jobs are gone now, the area is and looks really depressed. Some small towns look almost like ghost towns.

Just checked zillow, most houses in her home town are selling in the 20K range, no higher than 30 years ago. Where we live now, there is nothing on the market below 400K. Same country, two different worlds.

Back to OP - no, I would not do it, bad idea. Let your brother figure it out. Help him out in different ways. I wish you good luck!

ColoRetiredGirl
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Re: Finance a $28,000 house for Broth

Post by ColoRetiredGirl » Mon May 21, 2018 1:18 pm

jlawrence01 wrote:
Sat May 19, 2018 4:25 pm
My initial reaction would be to recommend that you buy the home and do a "rent to own" deal with your brother.

However, it does not seem like you have enough financial stability to pull it off. I would pass.

Everybody gets tired of renting. That is when you start working two jobs and start saving like a rock star. Or you get sick of your low-paying job and pursue one where there is greater growth potential.
Ditto as this is sage advice. I worked two jobs and went to school to save money and obtain a education. There is no such thing as a free lunch. Hard work and an education will go along way to achieve financial success. Teach him how to budget and save. Also, give him ideas how to find a side hustle.

Glockenspiel
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Re: Finance a $28,000 house for Brother?

Post by Glockenspiel » Mon May 21, 2018 3:10 pm

mouses wrote:
Mon May 21, 2018 12:27 pm
nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
I could live happily in that house. I clearly live in the wrong state.
Here's another example of the type of house a single man just out of high school could buy in rural small town Minnesota. Very similar to the one my brother bought just after attending school to be a mechanic.

https://www.edinarealty.com/homes-for-s ... 30-6030231#/

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dm200
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Re: Finance a $28,000 house for Brother?

Post by dm200 » Mon May 21, 2018 3:28 pm

Glockenspiel wrote:
Mon May 21, 2018 3:10 pm
mouses wrote:
Mon May 21, 2018 12:27 pm
nordsteve wrote:
Mon May 21, 2018 6:49 am
Similar prices for 1930s era homes in rural MN towns, where population has declined due to automation of farming. Here’s an example from the town my mom grew up in for $35 that is in decent condition.

https://www.edinarealty.com/homes-for-s ... 65-6030617
I could live happily in that house. I clearly live in the wrong state.
Here's another example of the type of house a single man just out of high school could buy in rural small town Minnesota. Very similar to the one my brother bought just after attending school to be a mechanic.

https://www.edinarealty.com/homes-for-s ... 30-6030231#/
amazing ...

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