I almost never disagree with Dave, but his personal obsession with owning real estate is causing him to miss the tremendous gift this guy's parents are offering him. To live anywhere, rent/mortgage free, for 3-5 years, is a true blessing. Avoiding those costs for that period of time would allow him to become 100% debt-free, invest the balance of what his home sold for, AND invest the money he would have otherwise been paying for housing. This is a great time to sell a home, a horrible time to buy one, and this guy gets 3-5 years to save toward buying his next home with CASH? What if the parents decide to keep both homes and just come visit once in a while, but their son and his family can just keep living there? If your income is your greatest wealth-building tool, and debt is the biggest impediment to building wealth, then avoiding the costs of a mortgage or rent just frees up more money to become wealthy. Imagine how wealthy we would all be if we never had to pay rent or a mortgage in our lifetimes!
I agree, let's not forget, free for 3-5 years in a 1.5 million dollar house. Obviously, the parents aren't hurting for money. The kid is 30, parents in their 50's or 60's. They might just leave it like that till they will it to him. He knows his parents better than anyone.
@@jewelswinfield my wife has been willed a multi million dollar hotel. We still building up our own nest egg. If he gets the house later on then it's a score. Don't count your chickens before they hatch
@@WarrenGaum - OK, so he keeps his current home, lives in his parents' house, pays off everything and rents out his own house until they want theirs back.
Don't make decision on feel - love Dave s response. Lock it down in writing. Then it will be clear what kind of favour they are trying to do or not do for their kids.
@@PInk77W1 yeah but you said no such thing....that's different than on average. There are many well off ppl that give their children benefits with no conditions. Idk if this is it.
The parents may be keeping this house in case they don't like living in FL. How is it not a good deal to live rent-free for a few years and save the rent to apply to debt and future house purchase?
It’s significantly better. Property is a big upgrade from the house they are in … so quality of life is better. Then reinvest the money … Dave missed this one , poor advice
@@finanzferdinand9874 yes they would be better off... take the money and reinvest in multiple income producing properties... while getting a residence that is morgtage and tax free for 3-5 years... people would kill for that opportunity
Without knowing the family it’s impossible to give good advice on this situation. If it’s truly no strings attached they should do this in a heartbeat.
@@cesaravegah3787 I currently have an adult child living in an apartment I own while he saves money. If he brought me a contract asking me to sign it I would laugh in his face. It’s not a purchase it’s charity.
Even if they decide to move back and not sell. All the money they saved, they can afford a house. Who cares about how much equality they lose in the Next couple years. You can't lose any if you don't have a house to begin with.
@@jimmymcgill6778 Especially as Dave here is making the same mistakes he criticizes others for. He isn't factoring in risk, he just takes house prices going up as an absolute. Which it is a very safe bet to say they will go up, but there is risk attached to that. Ignoring that risk as he does here is just silly.
There you go. You keep the house, keep building equity. Live in your parents house for free for a while and if things fall through you still have a place to go.
I swear he's not listening half the time, as well. He says, "I need a little bit more detail here," then proceeds to ask questions the guy already gave info for. This isn't the first time I've seen him do this.
Exactly!! So there needs to be some kind of agreement between parties about how much notice is needed if parents decide to move back!! Also, if parents house is a lot bigger, utilities/insurance/property taxes etc are going to be a lot higher! Are the parents still going to pay the property taxes & insurance? Unanswered questions . .
I think Dave is wrong here. He always tells people to go rent for a bit and save up money and then buy a house . So here these folks get to live rent free and save up money . I think this is actually a great idea. They don't have to stay there the full five years but at least until they save up a decent chunk of change.
@@evanbrown5254 Yea they should discuss expectations with the parents like this, to make sure they are all on the same page... at the end of the day the kids have NO liability and its a sweet deal for them... but they do need to work through the gentlemen's agreement items like this, to avoid family drama and hurt.
His parents are trying to help them. My dad would have done this and then sold it to us at the ‘family discount’ for helping him out. Most parents want to help their children. But I would be fine with an agreement in writing to make clear everyone’s expectations. Maybe just a lease agreement for a certain time period. Then let the parents do more if they choose later. This guy knows his parents and if he can trust the deal.
Yup there is no downside for the kids... worst case scenario is things go south and they have to move out of the big house live in temp housing for a month while they figure things out for long term... and thats WORST case.... No liability, opportunity to cut your expenses in half for 3-5 years, increase in quality of life and move up in house.... this is a no brainer.
Dave is focusing way too much on the missed appreciation of him buying his own house. The fact is, the amount of money they can save by living rent free in a $1.5 mil house for five years more than makes up for the appreciation of whatever house this guy can afford. They can stick that money in an S&P 500 index fund during that time and almost double their money. It sounds to me like the parents are the ones getting a raw deal. But they’re the ones who suggested it, so….🤷🏻♂️
No dave did not miss on him buying a house, he told him to go and be a home owner. Watch the entire video because he covers a lot of things to include him purchasing his parents home. At the end of the video he told this gentleman to not get burned!
Yea the parents are wealthy and therefore likely intelligent enough to understand this is not a "deal" for them.... its a gift to their kids. Kids have NO liability here and should take it in a heart beat... the only way they could go wrong is if they locked their money up to where it is unreachable in the event the parents want them to leave at some point. They should keep a little extra in savings during this time... maybe an extra months savings on top of their normal 3-6 months. As long as they dont go crazy and overlevearge their money... they will make out really well, and have a improved quality of life for a few years.
My parents and grandparents did this exact same thing in 1986 with the expectation that my parents could buy it but in 1994 my grand parents showed up with all their stuff and said we are moving back in! No notice no nothing. My parents left with my sister and I and it caused so much hate that my grand parents died after not speaking to my dad for 20 years. This is bad idea
Correct, sadly. Such agreements are almost never legally binding, and family members can lose heavily. Everyone might be acting in good faith when they enter the agreement, but greed can creep in over time. Especially if resentful inlaws are in their ear, month after month.
@@Imaginary_Life_UK I was thinking the EXACT SAME THING!!!! I was talking to my realtor, and he has clients that haven’t paid there mortgage in 18mos due to the pandemic, and are in the best financial situation they’ve been in for years!!!! So entitled!!!!
❤️ Dave but this advice is horrible!! Sounds like parents just want to try out Florida & their home is their fall back on if Florida is not somewhere they want to live. Pretty sweet deal for their kid. I hope they do it & don’t listen to Dave.
@@user-wq5ws1qs7xdef rich people problem. The family probably has 5M+ net worth to just let the kids live in their 1.5M home (cover taxes/mortgage) and not need any of the money from the house sale to buy a new house/lifestyle.
My fear would be mom and dad deciding to come back or selling and then not finding a house for myself. I can see that would be where they’d get burnt. Not to mention the lifestyle creep due to not having a mortgage. If the parents could guarantee a set time frame then I’d do it and invest the money. And continue to add to that investment.
The parents own two houses already. They obviously have money so it's doubtful that they will skrew their son. There are parents who put their (adult) kids' needs above their own. Sounds like they want to help them save money and save face. Making the whole thing legal may leave a nasty taste in the parents' mouth.
Actually, this is not a bad risk to consider. My neighbor’s “real” owner, aka their family member, decided to sell their home on a whim. Dunno if they got into a financial emergency or what happened. My neighbor (i.e. not the real owner) had to move to a rental fast.
I don't get Dave's problem with this .... would the caller be better off paying rent? As an aside, as to why his parents haven't sold their house, DH and I were advised to wait a couple of years by the mortgage broker if it was financially possible. Many people move to places like Florida (in our case it was Texas) and discover they don't really living there as much as they thought they would.
Also, can't rule out that they are actually just planning on giving him the house without saying it. These ppl just need to be honest about the whole situation though.
Sounds like Mom and Dad are hedging the move. They think Florida is right for them, but want to keep their current home as a fall back plan in the event they do not like Florida or decide to make half time between Florida and current home work.
Sell your house for $250k, invest that money in a S&P 500 index fund, live in a $1.5M house for the next few years rent free, take what you would have spent on the old mortgage and get the $35k in loans paid off (most likely, will take about 12 months), and then start saving like crazy for the next house. Locking in a "right to purchase" is probably a good idea, not so sure that filing that option on the deed is necessary with Mom & Dad as that might be the start of conflict with them. Question not asked was whether they lived in their former house for two of the past five years and will be able to exempt capital gains tax on the sale. If not, they are going to have to set aside some of the proceeds to pay taxes next year. (Dave never considers taxes in his advice).
Maybe not a popular opinion but if they hadn’t sold their house. Rent it out for whatever the mortgage is while they stay in the parents house rent free. Once they’re ready to sell they’d have the equity, debt paid off and a decent dent in their mortgage for them to move to their new home. Edit: the mutual fund option could be good too but real estate right now seems like a decent option to leave the money to grow for 3-5 years
On surface it looks like a wonderful opportunity caller get's to live in a million dollar home without paying rent and save up crazy but I get Dave's point too which comes from experiences There ain't no such thing as a free lunch .
There can be, but you need your expectations in check. So you would perhaps live there and save up like crazy, which I don't think is a bad option given he didn't seem very clear on where he would like to live and this would give him some time to figure that out and given he saved up like crazy at the same time it could really be a boon for himself.
Caller should rent his house and stays at parents house. Gains would still be exempt from tax as long as it was their primary residence for two of prior five years before sale. Rent it for two years and then reassess. They would still keep equity growing.
This sounds like a win-win for both sides. They get to live rent free for up to 5 years and save up a ton of money. If they see a house they really want to buy, they can always buy that and still house sit by dropping by every couple weeks. And, it gives the parents the option of moving back if FL doesn’t work out.
Dave is right this is a hell no. Family deals can go bad in a second. Then you have to move and start over. Plus your parents hold this over your head and any house you want will be much higher in 5 years.
@@wendytravis6427 Exactly. And any house would be higher in price in 5 years? Well, they would have been able to save almost all their paychecks all those 5 years, which would more than cover the cost of a house (or help tremendously). This is an excellent idea for both the parents and the kid & his family. Dave is wrong.
I disagree with dave on this one and so do most of the comments. The guy’s salary isn’t that much so I’d definitely house sit if I were him. Free rent for that many years is the equivalent of around a 30% salary increase. No brainier!!!!
I wouldn’t. House prices are going up than a higher percentage than he will earn in investing. Also I wouldn’t feel “settled” in my parents house with my partner and their things still in the basement.
I think Dave missed an opportunity to tell the young man to go by his own house and then have renters living in it to pay the mortgage, yes I understand the interest rate or the tax write off might suffer from that. But he could still put away a pretend house payment and save a bunch of cash all the while having his owned home with the renters being paid, and at the end of the five years he may have enough cash to go buy another home.
I don’t see the issue. When my boyfriend and I met he was staying at a family friends house, who lived out of the country, for about 2 years, for free. He was able to buy a fairly new car in full. Also there was a big leak, which would have been very expensive if he wasn’t there. Also him being there protected the home against squatters
the downside is the nicer house will cost more in the future so if he wants his parents house it would be best to lock in a purchase price now as this house will continue to appreciate
I don't know what the issue is. I would be a "glorified house sitter" and live there for free. In the meantime, buy a investment property and rent it out. I'll take that deal any day, if someone's nice enough to let me babysit their house.
Buy a house anyway. Rent it out and pay additional premiums every month so it can be paid off in 5-8 years . If parents come back - evict the renters and move into ur house. I don’t see the reason to buy the parents house if they will inherit it one day anyway - if the parents don’t need that money now.
Why cant they buy something else and rent it out, and live rent free, and pay off heaps off the rental?? SOmetimes take gifts where it's offered and use it to get a leg up.
The best thing for the couple is to have a lease with an option to buy. Even if they only pay a nominal amount per month in rent, a lease protects them if the parents want to move back from Florida. The option to buy, as Dave says, locks in a purchase price. The parents might not want to go for that. It sounds like the parents aren't sure they want to sell their house and feel like they are doing their son a favor by letting him and his wife live there for free, especially since the couple couldn't afford to buy the property right now even if it were for sale.
Dave nailed this response. They would be enabling indecisiveness to just go along with the plan as offered, and they need to protect their rights to where they are living.
Right if they had a clear cut plan and knew they wanted to keep the house in Georgia it would be a better deal. Dave doesn't want to see them homeless because there parents told them they were keeping the house and then suddenly changed their minds. I think all the expectations of responsibilties for the home, if utilities are covered by parents and taxes. All that needs discussed.
If he sticks that money in a HYSA for those 5 years, he’ll have made an extra $63k. On top of probably another $100k+ saved by having zero rent. While living in a nicer home than he could ever afford. I don’t get what the issue is.
It _IS_ a good deal for him, live in the house for free, buy your house *OWN* house & rent it out - really, how hard is this to work out? 🤦♂ *Very poor* from Dave...
If the guy's wife is ok with it and they have a plan for how to make it work, I think it might be worth looking into. It may seem weird to Dave, but I feel like if the guy and his wife can make it turn out well, that's the important thing.
I may have missed something here but if the issue is that he will be out of the market for 5 years. Can he stay at his parents house rent free? Buy a property they would want to live in but rent it out whilst they stay in the house, pay off debt and build equity? I dont think the deal stinks at all, i think theyre trying to do them a favour, they could probably rent it out to fund their florida lifestyle. Anyways, thats my 2 cents on the issue .
I don’t think it’s a bad deal. It allows them to save up like crazy because they are not paying rent. That probably beats the “appreciation” in the market
My uncle loaned my mom money and then had her make an extra years worth of payments before my mom retraced what she'd paid him. He reimbursed her, but it was a pain to go threw. I'd 100% reccomend either not banking with family, or having detailed agreements.
Another option, they could invest in a real-estate property and have renters. Boom! Equity in a home, AND making income from the rental. They'd only have this one mortgage so, Dave would agree based on his thoughts about mortgage debt.
Do it with caution, the agreement in place. But it is the indecisiveness of the parents that worry me the most. They could flip flop and 180 and want to move back in. If he did want to go forward, keep existing house and rent it out, thereby not losing out by not being in the market. And do save like crazy in the rent-free deal. This deal could easily go either way.
@@inthebooks3947the maintenance and monthly bills are probably going to be relatively the same and it sounds like the parents are paying the taxes. But anyways you’re fucking insane if you think $120k income can’t cover these cost. I live in tax hell and property taxes on a 1.5M home is 15-20k.
I would live in that house rent free and save up a ton of money. Especially with there being no expectation of them buying the house at the end of 5 years. With the equity in his home plus what he can save live rent free for 5 years he’ll probably be able to pay cash for his home in 5 years.
As far as missing out on real estate gains: If he has the discipline to put $2000 a month into a mutual fund or whatever, he will still get comparable gains. But without the mortgage interest or risk of homeownership.
I'm at a loss as to why living rent-free is ever a bad thing. They could put the money they'd use to make a house payment into savings and have a huge down payment for their own house.
i worked for the oreck family in boulder. when he went to findland as an obama ambassador for several years, they had a family, ''house sit''. it worked. it works. nothing wrong with it as long as there are written guidelines...
Why would the parents do this, as their whole purpose is to have the option to return to their old house if they do not end up liking their new location?
I’ll go house sit for this callers parents for five years. After five years I’ll gladly move out either all of the money I’ve saved for the last dove years. Instead of a 20% down payment on my next house id have at least 50%. Houses appreciate but so does $ in mutual funds.
Not very good advice. When they put the equity from their house plus what they save by living rent free into a mutual fund or etf that will easily beat the housing appreciation they miss out on. My advice, if you ever get an opportunity to live somewhere for free you take it.
Dave's advice is go get an over priced house ,skip the free Rent 😒. And make your parents sign a contract 😳. For the free Rent they're offering. This is a no brainier ...Hunker down .save and wait for the right opportunity .
Imagine if someone on the street offered to let you live rent free in a $1.5 million house for 3-5 years! Would Dave seriously consider that to be unfair for the occupant who is paying $0? Then Dave tells the son to disrespect his parents by forcing them to sign a legal document when the son is already getting a sweetheart deal. This was not good advice.
The parents are letting them stay for no rent. They can bank all the money towards another home. If they can’t afford the house why would they want to buy it?
Even if they do appreciate for five years, that appreciation will be offset by not having a mortgage for five years. He can save more money and put down a bigger down payment.
Very confusing video...wouldn't buy the place then says he would, it's a family place yet his parents purchased it at auction..how long ago did they purchase it? It would be nice to house sit for 3-5 years with no mortgage payments, but something seems off. Who pays for maintenance and repairs? Sound like sweet parents though. :)
I disagree here. If they take whatever amount each month they are now not paying for a mortgage, and save that over the next five years, added to what they already have, they would likely still be ahead of the increase in home values over the next five years and still not have to get a mortgage.
@@JustinCase780 It’s business. People end up suing each other so much because of these deals. Parents. Just sell your house Kid. Just buy a house in your budget. 90% Chance this deal goes south
Someone help… I am 23 and still live at home with about 45k saved as a civil engineer. I don’t pay rent and my parents are awesome, should I stay at home and save for another year then buy a house? When do I get out?
Why do you want to be saddled with a house at such a young age? Are you already married? If not, enjoy your single carefree years, and keep stacking cash while you can. Most families cannot afford for you to live there rent free, you are very blessed to be in that situation and having great parents too.
Dave always puts down family. I wonder if his parents were harsh on him and discipline him too much growing up. Not all parents are hard azzes. There are generous, giving parents out there.
@@jimmymcgill6778 I think he's saying that it's ironic Dave would say this since he's given his children millions of dollars which is true and not in line with what he's saying here at all.
Free housing for 5 years... no taxes... nothing and getting to sell their house while market is high... damn thats stacking blessings on blessings on blessings.
Yeah this is just a bad take. Park that 215k in bonds or mutual fund to beat appreciation, stack money up while you live in a million dollar house for a few years, and get majorly ahead in life
![โรงเรียนห้ามรัก โดนจับได้ตาย...!! [เอิร์นไดเม่]](http://i.ytimg.com/vi/4u02Sbr556Q/mqdefault.jpg)
![일상 속 기분 좋음 [Proto disco meme]](http://i.ytimg.com/vi/DwmEIaZ7XGQ/mqdefault.jpg)
I almost never disagree with Dave, but his personal obsession with owning real estate is causing him to miss the tremendous gift this guy's parents are offering him. To live anywhere, rent/mortgage free, for 3-5 years, is a true blessing. Avoiding those costs for that period of time would allow him to become 100% debt-free, invest the balance of what his home sold for, AND invest the money he would have otherwise been paying for housing. This is a great time to sell a home, a horrible time to buy one, and this guy gets 3-5 years to save toward buying his next home with CASH? What if the parents decide to keep both homes and just come visit once in a while, but their son and his family can just keep living there? If your income is your greatest wealth-building tool, and debt is the biggest impediment to building wealth, then avoiding the costs of a mortgage or rent just frees up more money to become wealthy. Imagine how wealthy we would all be if we never had to pay rent or a mortgage in our lifetimes!
My property tripled in value in five years. Your money can't do that in a bank.
I agree, let's not forget, free for 3-5 years in a 1.5 million dollar house. Obviously, the parents aren't hurting for money. The kid is 30, parents in their 50's or 60's. They might just leave it like that till they will it to him. He knows his parents better than anyone.
@@jewelswinfield my wife has been willed a multi million dollar hotel. We still building up our own nest egg. If he gets the house later on then it's a score. Don't count your chickens before they hatch
@@WarrenGaum - OK, so he keeps his current home, lives in his parents' house, pays off everything and rents out his own house until they want theirs back.
@@jasonbroom7147 yes. That's how you keep building wealth.
I feel like this is a situation where mom and dad have a bunch of money and they are trying to do their kid a favor.
No such thing as a free lunch
Don't make decision on feel - love Dave s response. Lock it down in writing. Then it will be clear what kind of favour they are trying to do or not do for their kids.
@@ViggsPR true. But on ave. Things go bad a lot.
@@PInk77W1 yeah but you said no such thing....that's different than on average.
There are many well off ppl that give their children benefits with no conditions. Idk if this is it.
@@Ka_Gg giving kids stuff is way different
Than living in their home for 5yrs
The parents may be keeping this house in case they don't like living in FL. How is it not a good deal to live rent-free for a few years and save the rent to apply to debt and future house purchase?
I feel like investing the money you save on mortgage and interest payments would more than make up for lost equity too
If they are getting to live there rent-free then come on that’s still not too much worse than buying. They can save up like crazy
It’s significantly better. Property is a big upgrade from the house they are in … so quality of life is better. Then reinvest the money … Dave missed this one , poor advice
@@Jessticks2319 false. You have a mindset which jumps over all moral values. Cool it’s cheaper. Cool they can save up. This is immoral & you know that
He's paid off his house though so would be no better off
@@finanzferdinand9874 yes they would be better off... take the money and reinvest in multiple income producing properties... while getting a residence that is morgtage and tax free for 3-5 years... people would kill for that opportunity
I was wondering why not rent out their current house and stay rent free at the parents?
Without knowing the family it’s impossible to give good advice on this situation. If it’s truly no strings attached they should do this in a heartbeat.
That is the key point "no strings attached" which when dealing with the family is tricky...I would draw a fair contract for both sides and go for it.
@@cesaravegah3787 I currently have an adult child living in an apartment I own while he saves money. If he brought me a contract asking me to sign it I would laugh in his face. It’s not a purchase it’s charity.
Live for free in the 1.5 million house, buy a house you can afford and would like to live in, and rent it out until the house sitting period ends.
That's why you do it as a business deal. Have papers drawn up and signed. If the parents won't agree, forget it
@@jeffr9854 And your the reason NOT to do deals with family.
I'm house sitting. Rent free and they can stack crazy cash over that time, they can't lose. Its not forever I'm doing it.
Even if they decide to move back and not sell. All the money they saved, they can afford a house.
Who cares about how much equality they lose in the Next couple years.
You can't lose any if you don't have a house to begin with.
Lucky mf lol
@@jimmymcgill6778 the money they save should offset any appreciation of home prices five years down the line.
@@jimmymcgill6778 Especially as Dave here is making the same mistakes he criticizes others for. He isn't factoring in risk, he just takes house prices going up as an absolute. Which it is a very safe bet to say they will go up, but there is risk attached to that. Ignoring that risk as he does here is just silly.
@@arrowknee7356 YEP
He should rent his current house out to pay down his 35k debt and mortgagee while he lives rent free. That’s the no brainer move.
There you go. You keep the house, keep building equity. Live in your parents house for free for a while and if things fall through you still have a place to go.
No - too much of a risk. Dave gave great advice here.
Yep
@Chris W Nope, bad idea. Too risky.
He already sold his house though
So according to Dave living rent free in $1.5 million home is a bad deal… I feel really bad for all the people that take his word as gospel.
I swear he's not listening half the time, as well. He says, "I need a little bit more detail here," then proceeds to ask questions the guy already gave info for. This isn't the first time I've seen him do this.
@@thetaekwondoe3887 Dave definitely clarified the deal by asking his questions.
I disagree with Dave. Live there for free. Save money while you live for free and buy a home you really want later.
@@thetaekwondoe3887 he's been ''1/2 way out the door'' for years.
he needs to step down. his heart's not in it anymore.
They don’t know if they’re gonna like Florida. If they don’t, they want the opportunity to move back to their house.
Exactly!! So there needs to be some kind of agreement between parties about how much notice is needed if parents decide to move back!!
Also, if parents house is a lot bigger, utilities/insurance/property taxes etc are going to be a lot higher!
Are the parents still going to pay the property taxes & insurance? Unanswered questions . .
Making this way to complicated. Just house sit it and go from there.
I think Dave is wrong here. He always tells people to go rent for a bit and save up money and then buy a house . So here these folks get to live rent free and save up money . I think this is actually a great idea. They don't have to stay there the full five years but at least until they save up a decent chunk of change.
What I’d be curious about is what I have to pay if I was moving into this house. Would the parents pay for repairs?
The truth is Dave wants housing to go up so bad and he doesn't really want people having an easy way
@@evanbrown5254 no you’re living rent free attests pay for repairs here and there
@@evanbrown5254 Yea they should discuss expectations with the parents like this, to make sure they are all on the same page... at the end of the day the kids have NO liability and its a sweet deal for them... but they do need to work through the gentlemen's agreement items like this, to avoid family drama and hurt.
Dave is mad cause it sounds like the parents are getting the short end of the stick.
Move into the free house and rent out your current home.
Exactly!!! Did they already sell their other home?
@@maiaheiss2991 yes they did
Current house already sold
His parents are trying to help them. My dad would have done this and then sold it to us at the ‘family discount’ for helping him out. Most parents want to help their children. But I would be fine with an agreement in writing to make clear everyone’s expectations. Maybe just a lease agreement for a certain time period. Then let the parents do more if they choose later. This guy knows his parents and if he can trust the deal.
The situation went right over these guys head… keep his home, rent for free and save up 30k. Dave made it much more complicated.
Yup there is no downside for the kids... worst case scenario is things go south and they have to move out of the big house live in temp housing for a month while they figure things out for long term... and thats WORST case.... No liability, opportunity to cut your expenses in half for 3-5 years, increase in quality of life and move up in house.... this is a no brainer.
@@Jessticks2319 dave ain't listening...
@@john-o1g9p says the guy responding a yt comment from over a year ago , dumbass
I am willing to do a house sit for free!!! ✋ where can I apply???
They have a website
Housesitting dot com
Dave wrong on this one. It’s rent free, stack your money
Don’t get involved with family
Shady
that's a five year commitment!
Capital gains… you need to buy or pay big taxes!
you would think dave would be on this like white on rice...
@@LauraLParr cool
paperwork in place, go for it.
contracts, uber alles.
Dave is focusing way too much on the missed appreciation of him buying his own house. The fact is, the amount of money they can save by living rent free in a $1.5 mil house for five years more than makes up for the appreciation of whatever house this guy can afford. They can stick that money in an S&P 500 index fund during that time and almost double their money. It sounds to me like the parents are the ones getting a raw deal. But they’re the ones who suggested it, so….🤷🏻♂️
Parents will do amazing things for their kids… the problem is when the kid instead of following the advise asks the wrong person for a recommendation.
No dave did not miss on him buying a house, he told him to go and be a home owner. Watch the entire video because he covers a lot of things to include him purchasing his parents home. At the end of the video he told this gentleman to not get burned!
@@matthewdievendorf9609 hey, this must be Dave’s burner account. Take a chill pill, bud.
Yea the parents are wealthy and therefore likely intelligent enough to understand this is not a "deal" for them.... its a gift to their kids. Kids have NO liability here and should take it in a heart beat... the only way they could go wrong is if they locked their money up to where it is unreachable in the event the parents want them to leave at some point. They should keep a little extra in savings during this time... maybe an extra months savings on top of their normal 3-6 months. As long as they dont go crazy and overlevearge their money... they will make out really well, and have a improved quality of life for a few years.
@@ImDahDude burn
Dave's totally wrong here. As long as there are no strings attached, it's a good deal for them. They can save up.
Dude is just as indecisive as his folks.
My parents and grandparents did this exact same thing in 1986 with the expectation that my parents could buy it but in 1994 my grand parents showed up with all their stuff and said we are moving back in! No notice no nothing. My parents left with my sister and I and it caused so much hate that my grand parents died after not speaking to my dad for 20 years. This is bad idea
Yikes so sad.
But so obvious
Oh no!
So long as it's a written agreement with an agreed upon end date I see no down side. Pile up cash during the cheap rent years.
Correct, sadly. Such agreements are almost never legally binding, and family members can lose heavily. Everyone might be acting in good faith when they enter the agreement, but greed can creep in over time. Especially if resentful inlaws are in their ear, month after month.
@@Imaginary_Life_UK I was thinking the EXACT SAME THING!!!! I was talking to my realtor, and he has clients that haven’t paid there mortgage in 18mos due to the pandemic, and are in the best financial situation they’ve been in for years!!!! So entitled!!!!
Ramsey makes a big deal out of everything. Just house sit, work, save money, pay off the debt. The parents are doing a favor. Don't listen to Ramsey.
Exactly! As simple as that some people make a mountain out of a mole hill.
Why are you even watching this if you don’t like Dave? lol
@@Lesh004 literally never once did they say they don't like Dave.. you can disagree with someone and still like them jeez
Exactly
❤️ Dave but this advice is horrible!! Sounds like parents just want to try out Florida & their home is their fall back on if Florida is not somewhere they want to live. Pretty sweet deal for their kid. I hope they do it & don’t listen to Dave.
Rich people problems
It’s not a rich thing. Sounds like a lifetime of good choices thing. Having a paid off home at retirement is normal.
@@user-wq5ws1qs7xdef rich people problem. The family probably has 5M+ net worth to just let the kids live in their 1.5M home (cover taxes/mortgage) and not need any of the money from the house sale to buy a new house/lifestyle.
My fear would be mom and dad deciding to come back or selling and then not finding a house for myself. I can see that would be where they’d get burnt. Not to mention the lifestyle creep due to not having a mortgage. If the parents could guarantee a set time frame then I’d do it and invest the money. And continue to add to that investment.
The parents own two houses already. They obviously have money so it's doubtful that they will skrew their son. There are parents who put their (adult) kids' needs above their own. Sounds like they want to help them save money and save face. Making the whole thing legal may leave a nasty taste in the parents' mouth.
Shy wohld the parents do that? Unlikely if they have a good relationship.
Actually, this is not a bad risk to consider. My neighbor’s “real” owner, aka their family member, decided to sell their home on a whim. Dunno if they got into a financial emergency or what happened. My neighbor (i.e. not the real owner) had to move to a rental fast.
Buy a house and rent it out while you live for free
Dave made this complicated. His parents wants them to stay in the house while they decide if they want to reside in Florida before they sale.
With a hurricane coming, they might already have to reconsider only a month in.
I don't get Dave's problem with this .... would the caller be better off paying rent? As an aside, as to why his parents haven't sold their house, DH and I were advised to wait a couple of years by the mortgage broker if it was financially possible. Many people move to places like Florida (in our case it was Texas) and discover they don't really living there as much as they thought they would.
That's the problem. If they find out they don't like it in Florida, the whole deal is suddenly off.
Also, can't rule out that they are actually just planning on giving him the house without saying it. These ppl just need to be honest about the whole situation though.
They aren’t planning In giving it to him if they aren’t willing to say it.
@@raleigh2747 lol. Don't be surprised.ive seen many ppl who give things to their children but never word it that way
@@Ka_Gg Or give them an excellent price...like 1/2 the market value that they would normally have sold it for. Give them quite a deal.
" Do this like it's with strangers"
Yes! Things happen.
Having a written legal contract is always a good idea even if it is family.
Sounds like Mom and Dad are hedging the move. They think Florida is right for them, but want to keep their current home as a fall back plan in the event they do not like Florida or decide to make half time between Florida and current home work.
Why not just live there for free and save what would be the mortgage?
Buy a house rent it out and live rent in parents house free for 5 years. Then buy parents house using other property as colaterol for mortgage
better advice. keep their original house and rent it out then live in the parents house
Sell your house for $250k, invest that money in a S&P 500 index fund, live in a $1.5M house for the next few years rent free, take what you would have spent on the old mortgage and get the $35k in loans paid off (most likely, will take about 12 months), and then start saving like crazy for the next house. Locking in a "right to purchase" is probably a good idea, not so sure that filing that option on the deed is necessary with Mom & Dad as that might be the start of conflict with them.
Question not asked was whether they lived in their former house for two of the past five years and will be able to exempt capital gains tax on the sale. If not, they are going to have to set aside some of the proceeds to pay taxes next year. (Dave never considers taxes in his advice).
That is a good option. BUT any profits made on the index, you are paying taxes on. Any profits on a primary residence is tax free.
Maybe not a popular opinion but if they hadn’t sold their house. Rent it out for whatever the mortgage is while they stay in the parents house rent free. Once they’re ready to sell they’d have the equity, debt paid off and a decent dent in their mortgage for them to move to their new home.
Edit: the mutual fund option could be good too but real estate right now seems like a decent option to leave the money to grow for 3-5 years
That is definitely the smart option!
I’m 29 year old not married & don’t have any long term relationships. & I have no kids yet. Not everyone wants to have kids. I love being childless
It makes perfect sense to me. Dave is wrong on this one.
On surface it looks like a wonderful opportunity caller get's to live in a million dollar home without paying rent and save up crazy but I get Dave's point too which comes from experiences There ain't no such thing as a free lunch .
There can be, but you need your expectations in check. So you would perhaps live there and save up like crazy, which I don't think is a bad option given he didn't seem very clear on where he would like to live and this would give him some time to figure that out and given he saved up like crazy at the same time it could really be a boon for himself.
No free lunch from your parents? My god most people are so weird about money.
Caller should rent his house and stays at parents house. Gains would still be exempt from tax as long as it was their primary residence for two of prior five years before sale. Rent it for two years and then reassess. They would still keep equity growing.
This sounds like a win-win for both sides. They get to live rent free for up to 5 years and save up a ton of money. If they see a house they really want to buy, they can always buy that and still house sit by dropping by every couple weeks. And, it gives the parents the option of moving back if FL doesn’t work out.
I think having the 215k invested and not having to maintain a home is far better than hoping to get rich off of home values 😂😂
house will go up in value, SO you not paying rent that lot of money you can ADD into buying a house.
Dave is right this is a hell no. Family deals can go bad in a second. Then you have to move and start over. Plus your parents hold this over your head and any house you want will be much higher in 5 years.
How do you know his parents will hold it over his head? Have you met them?
@@wendytravis6427 Exactly. And any house would be higher in price in 5 years? Well, they would have been able to save almost all their paychecks all those 5 years, which would more than cover the cost of a house (or help tremendously). This is an excellent idea for both the parents and the kid & his family. Dave is wrong.
Get in writing of course, but living rent/mortgage free for up to 5 years can make a HUGE difference in the trajectory of your finances
disagree with Dave. If they have extra money they can invest it in a rental. Never turn down free housing.
I disagree with dave on this one and so do most of the comments. The guy’s salary isn’t that much so I’d definitely house sit if I were him. Free rent for that many years is the equivalent of around a 30% salary increase. No brainier!!!!
point of the matter is theyre loosing on home equity. You missed that part
I wouldn’t. House prices are going up than a higher percentage than he will earn in investing.
Also I wouldn’t feel “settled” in my parents house with my partner and their things still in the basement.
It’s a 1.5 million dollar house, they can’t handle the maintenance & monthly bills & taxes especially if they have kids.
@@Howdy762 If caller wanted home equity so bad for the next five years, he shouldn't have sold the house he already owned ($250K).
I think Dave missed an opportunity to tell the young man to go by his own house and then have renters living in it to pay the mortgage, yes I understand the interest rate or the tax write off might suffer from that. But he could still put away a pretend house payment and save a bunch of cash all the while having his owned home with the renters being paid, and at the end of the five years he may have enough cash to go buy another home.
The parents are doing them a favour, its rent free!
I don’t see the issue. When my boyfriend and I met he was staying at a family friends house, who lived out of the country, for about 2 years, for free. He was able to buy a fairly new car in full. Also there was a big leak, which would have been very expensive if he wasn’t there. Also him being there protected the home against squatters
What? What’s wrong with this deal? He can stock pile his money for 2-5 years & afford a nicer house. Where’s the downside?! 🤷🏻♀️
the downside is the nicer house will cost more in the future so if he wants his parents house it would be best to lock in a purchase price now as this house will continue to appreciate
The other problem is that after you have lived in a million dollar house, it is pretty hard to return to ordinary.
I don't know what the issue is. I would be a "glorified house sitter" and live there for free. In the meantime, buy a investment property and rent it out. I'll take that deal any day, if someone's nice enough to let me babysit their house.
Buy a house anyway. Rent it out and pay additional premiums every month so it can be paid off in 5-8 years . If parents come back - evict the renters and move into ur house.
I don’t see the reason to buy the parents house if they will inherit it one day anyway - if the parents don’t need that money now.
Why cant they buy something else and rent it out, and live rent free, and pay off heaps off the rental?? SOmetimes take gifts where it's offered and use it to get a leg up.
The best thing for the couple is to have a lease with an option to buy. Even if they only pay a nominal amount per month in rent, a lease protects them if the parents want to move back from Florida. The option to buy, as Dave says, locks in a purchase price. The parents might not want to go for that. It sounds like the parents aren't sure they want to sell their house and feel like they are doing their son a favor by letting him and his wife live there for free, especially since the couple couldn't afford to buy the property right now even if it were for sale.
Dave nailed this response. They would be enabling indecisiveness to just go along with the plan as offered, and they need to protect their rights to where they are living.
Right if they had a clear cut plan and knew they wanted to keep the house in Georgia it would be a better deal.
Dave doesn't want to see them homeless because there parents told them they were keeping the house and then suddenly changed their minds.
I think all the expectations of responsibilties for the home, if utilities are covered by parents and taxes. All that needs discussed.
If he sticks that money in a HYSA for those 5 years, he’ll have made an extra $63k. On top of probably another $100k+ saved by having zero rent. While living in a nicer home than he could ever afford.
I don’t get what the issue is.
It _IS_ a good deal for him, live in the house for free, buy your house *OWN* house & rent it out - really, how hard is this to work out? 🤦♂ *Very poor* from Dave...
Exactly!!!!
If the guy's wife is ok with it and they have a plan for how to make it work, I think it might be worth looking into. It may seem weird to Dave, but I feel like if the guy and his wife can make it turn out well, that's the important thing.
I may have missed something here but if the issue is that he will be out of the market for 5 years. Can he stay at his parents house rent free? Buy a property they would want to live in but rent it out whilst they stay in the house, pay off debt and build equity?
I dont think the deal stinks at all, i think theyre trying to do them a favour, they could probably rent it out to fund their florida lifestyle.
Anyways, thats my 2 cents on the issue .
People are so ungrateful these days,
Rent out your current home, pay off that 35k while house sitting for free at your parents place. No brainer.
I don’t think it’s a bad deal. It allows them to save up like crazy because they are not paying rent. That probably beats the “appreciation” in the market
My uncle loaned my mom money and then had her make an extra years worth of payments before my mom retraced what she'd paid him. He reimbursed her, but it was a pain to go threw. I'd 100% reccomend either not banking with family, or having detailed agreements.
Another option, they could invest in a real-estate property and have renters. Boom! Equity in a home, AND making income from the rental. They'd only have this one mortgage so, Dave would agree based on his thoughts about mortgage debt.
I thought the same thing, how Dave Ramsey didn't work this out is beyond me...
The one thing they haven't mentioned is capital gains. You only have 2 years to use your money before you get clobbered with taxes on them.
I agree with Dave, family will burn you, but they will be sneaky about it. I bought my mom’s family home and it was a horrible idea.
Do it with caution, the agreement in place. But it is the indecisiveness of the parents that worry me the most. They could flip flop and 180 and want to move back in.
If he did want to go forward, keep existing house and rent it out, thereby not losing out by not being in the market. And do save like crazy in the rent-free deal.
This deal could easily go either way.
I would take this deal, save up money like crazy.
It’s a 1.5 million dollar house, they can’t handle the maintenance & monthly bills & taxes especially if they have kids.
@@inthebooks3947the maintenance and monthly bills are probably going to be relatively the same and it sounds like the parents are paying the taxes. But anyways you’re fucking insane if you think $120k income can’t cover these cost. I live in tax hell and property taxes on a 1.5M home is 15-20k.
I would live in that house rent free and save up a ton of money. Especially with there being no expectation of them buying the house at the end of 5 years. With the equity in his home plus what he can save live rent free for 5 years he’ll probably be able to pay cash for his home in 5 years.
As far as missing out on real estate gains: If he has the discipline to put $2000 a month into a mutual fund or whatever, he will still get comparable gains. But without the mortgage interest or risk of homeownership.
I'm at a loss as to why living rent-free is ever a bad thing. They could put the money they'd use to make a house payment into savings and have a huge down payment for their own house.
i worked for the oreck family in boulder. when he went to findland as
an obama ambassador for several years, they had a family, ''house sit''.
it worked. it works. nothing wrong with it as long as there are written guidelines...
Why would the parents do this, as their whole purpose is to have the option to return to their old house if they do not end up liking their new location?
I’ll go house sit for this callers parents for five years. After five years I’ll gladly move out either all of the money I’ve saved for the last dove years. Instead of a 20% down payment on my next house id have at least 50%. Houses appreciate but so does $ in mutual funds.
The best move is moving into your parents house for free while still buying your own house and renting it out meanwhile and saving money like crazy
My thoughts exactly!
Wow! Yet another show with really not so great advice. All Dave can see is losing possible appreciation on a house. It is like he has blinders on.
He's right. My house appreciates more each month than my mortgage costs. Living somewhere rent free would literally cost me more than owning my home.
Dave is not understanding the full deal.
Hope that he guy I’m video is reading the comments
@@d_all_in doubtful that continues as mortgage rates go up
I think it’s a horrible deal
Not very good advice. When they put the equity from their house plus what they save by living rent free into a mutual fund or etf that will easily beat the housing appreciation they miss out on. My advice, if you ever get an opportunity to live somewhere for free you take it.
Dave's advice is go get an over priced house ,skip the free Rent 😒. And make your parents sign a contract 😳. For the free Rent they're offering. This is a no brainier ...Hunker down .save and wait for the right opportunity .
Buy a house and rent it out while living rent free at your parents. Charge more rent than the mortgage and make money along the way.
Move into the house, rent your current home. Throw every mortgage payment at the debt.
Imagine if someone on the street offered to let you live rent free in a $1.5 million house for 3-5 years! Would Dave seriously consider that to be unfair for the occupant who is paying $0? Then Dave tells the son to disrespect his parents by forcing them to sign a legal document when the son is already getting a sweetheart deal. This was not good advice.
The parents are letting them stay for no rent. They can bank all the money towards another home. If they can’t afford the house why would they want to buy it?
2-5 years?!?! Sounds like the parents JUST bought the house and are wanting to sell for profit. But they need to avoid capital gains tax.
Homes will continue in appreciation for five more years? Current data shows that sale prices are dropping. More bad advice from the channel.
Even if they do appreciate for five years, that appreciation will be offset by not having a mortgage for five years. He can save more money and put down a bigger down payment.
Very confusing video...wouldn't buy the place then says he would, it's a family place yet his parents purchased it at auction..how long ago did they purchase it? It would be nice to house sit for 3-5 years with no mortgage payments, but something seems off. Who pays for maintenance and repairs? Sound like sweet parents though. :)
Sounds like Uber wealthy parents maybe even more so than Dave.
He will have an option to buy it if his parents like Florida and stay there, otherwise they are coming back to live in their old house.
Glad I wasn’t the only one confused
I disagree here. If they take whatever amount each month they are now not paying for a mortgage, and save that over the next five years, added to what they already have, they would likely still be ahead of the increase in home values over the next five years and still not have to get a mortgage.
I feel bad for this guy getting a 1.5M house rent free for 3-5 years and Papa rains on his parade. 🤣
Never mix family with business
@@PInk77W1 But it's not "business". It's family and it's the parents house. 🤣
@@JustinCase780
It’s business. People end up suing each other so much because of these deals.
Parents. Just sell your house
Kid. Just buy a house in your budget.
90% Chance this deal goes south
@@PInk77W1 Suing each other. 🤣
@@PInk77W1 I’m sorry you hate your children
Someone help… I am 23 and still live at home with about 45k saved as a civil engineer. I don’t pay rent and my parents are awesome, should I stay at home and save for another year then buy a house? When do I get out?
stay home brother
Why do you want to be saddled with a house at such a young age? Are you already married? If not, enjoy your single carefree years, and keep stacking cash while you can. Most families cannot afford for you to live there rent free, you are very blessed to be in that situation and having great parents too.
Stay home bro. You're not married and you ain't got kids. Stay home and stack up as much as you can until you can buy a house in cash and move out.
Live there rent free, and buy a house and rent it out.
I hope I can do this for my kids one day, and I hope they are smart enough to accept it.
Do not mix business with blood.
He did say he wanted to keep growing the equity, so he knew that.
Family+money decisions= issues
Nothings wrong with this.
Again, Dave always thinks the worst of the parents.
Dave always puts down family. I wonder if his parents were harsh on him and discipline him too much growing up. Not all parents are hard azzes. There are generous, giving parents out there.
ironic since dave gave his kids millionaire salaries at Ramsey solutions
He's seen family mess other families a lot. It's for good reason.
@@cutehumor What does that have to do with anything?
@@jimmymcgill6778 I think he's saying that it's ironic Dave would say this since he's given his children millions of dollars which is true and not in line with what he's saying here at all.
move into the parents house since it's free, rent their current home while having a tenant pay for their mortgage so they continue to build equity..?
Why would he “buy” a house that he will inherit? That makes no sense whatsoever.
Sell the house and invest the equity minus your debt payoff
Why is it wrong to live rent free in this house?
Free housing for 5 years... no taxes... nothing and getting to sell their house while market is high... damn thats stacking blessings on blessings on blessings.
Yeah this is just a bad take. Park that 215k in bonds or mutual fund to beat appreciation, stack money up while you live in a million dollar house for a few years, and get majorly ahead in life
Protect against squatters