[thoughtiwastheman]

Ok. Here is my situation. I recently graduated from college and have been living in Boston with my parents since. I currently live with my 56 years old mother and my dad who no longer works because of a work related injury that left him disabled. My parenst have about $15,000 in the bank that they can use for a down payment on a house. My mother makes about $30,000 a year and my father receives about $700 a month from social security. It has always been my mother's dream to buy a three family apartment and since I am out of college and working, she figures I can help her obtain a three family apartment by co-signing the purchase since my father has a ruin credit and is no longer working. I am more than willing to help them since I would love to have my own apartment but I am afraid of one small thing. I have a very small college loan to pay back ($7,000) but I also plan to go to law school in two years. I know I am going to have to take a huge loan for law school but I don't know how co-signing with my mom will affect my dream of becoming a lawyer too. I really want to help my mom since she has done so much for me. My mother still has about six more years to work and I figure that my done I should be out of law school and be able to take on all the responsibilities that comes with the apartment. My credit is great by the way. Any suggestion?

[gazelleintense]

Never co-sign. When she can't pay, you are legally required too... and your credit is shot. Not even for family. Don't do it.

[shygrneyzs]

I agree, don't do this. At least not now. You have two more years of school ahead. Maybe once you have passed the bar and are a practicing attoreny with some money in the bank, you can offer to help. But not now, it is too risky for you.

I completely understand the wanting to help your Mom and Dad, it is comendable that you want to. What is usually seen on here are adult kids sponging off their parents yet and no ambition to get off the couch.

Hope your parents will understand this. Good luck with that and best of luck in law school and getting your attorney feet in the door.

[michealb]

I was originally thinking you should but after thinking about it with your mom only having 6 years of work left and you wanting to be a lawyer. I would suggest you hold off until you are done with school and get a job. Your much more likely to make it through law school if you don't have a big mortgage payment to worry about. Tell your mom you will be able to take better care of her once your out of law school and buy her a much nicer place that you could only help her get now. Just make sure you follow through with it.

[thoughtiwastheman]

I mean, doesn't it make sense to co-sign so that my parents can live on one floor and I and some other family paying rent on the other two apartment. I can always look for a roommate to help with the rent, and if things don't work out, I can always move back into my parents apartment during law school while tenants on the other two floors pay the mortgage. Still not a good plan?

[ScottGem]

I partially disagree with the others. Co-signing should NOT affect your credit (unless the loan is defaulted) or your going to law school in the least. But, you shouldn't co-sign, you should be a part owner. Your name and your mom's should be on the deed and the mortgage.

Second, you need to be very careful about crunching the numbers. A down payment of $15K is not a lot for a 3 unit house. I would only go into this IF the rental on 2 of the units will cover at least 75% of the monthly payment. In this way, you can then have the option of moving back in with the 'rents and renting out 2 of the units to cover your payments.

If the numbers work, then I say it's a good investment and go for it.

[michealb]

The reason most people are telling you to wait is because just like any investment an apartment building has risks with it and an unexpected vacancy or expense could cause you to have to use law school money to fix the house. I recently had 4 of my 4 rentals empty in a string of foul luck and had to carry the mortgages for 4 houses for 3 months while I tried to get them rented. Lucky for me I had the money to do that but many new landlords do not and can lead to bankruptcy or at the very least not being able to purchase the things we want like law school. We are also figuring that since your income will go up significantly after law school your plans might change after you have more income at your disposal. Rental property are a great way to make money but the first 5 years can be more than many landlords can handle.

[thoughtiwastheman]

That's what I meant ScottGem. I will be part owner of the apartment. I will continue to play with the numbers. Thanks.

[Lowtax4eva]

My only advice to add would be to consider if your parents could afford the home if the 3rd unit was not being rented. Could they afford 2/3rds of the mortgage if there isn't a renter in this unit for a few months.

[thoughtiwastheman]

Good point lowtaxeva