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Should I buy my mom's townhome in the bay area?

Started by mao, January 11, 2021, 11:38:58 AM

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Hi Sam and everyone,

My sister and I need to sell my mom's townhome in the bay area (California) to provide her cash for assisted living. The townhome is probably going to sell around $1.1M-$1.2M (no mortgage). Her facility costs $10k+/- per month. We are not too worried about her running out of money as she has other assets offshore. But it's easier for us to sell the house now to convert to cash and buy us a few years time.

Now, my wife and mine income combined ($170k per year) would max out at around $1M purchase price or less. And honestly I don't want to go anywhere near that price as the mortgage burden is too huge. A relative suggests that I can still buy my mom's townhome as a discounted price, a price that I can afford, since it is my mom. Let's say I buy it for $800k, our monthly payment would still be $4.5k+/- (PITI HOA PMI), which honestly is still really high for me.

The question is, should I buy it say around $800k? One thing to keep in mind is that my sister and I don't have the best relationship and so that itself is a hurdle on its own. I think she'd do it but it could increase friction for us.

The discount and the fact that it is in the bay area is the main reason I am considering buying.

My wife and I are in our early 30s with combined net worth of $1M+/-. Current I have $100k+ cash before having to sell other houses/stocks. Currently we have little monthly debt, just $1.5k on our primary home in Texas, and we enjoy having the extra cash to either save them or do things that we enjoy (such as travel). Obviously if I should buy the townhome this would change our lifestyle quite a bit. We were planning moving to CA to be closer with my mom anyway, but I was going to cap renting at $3k/month.

Thank you so much in advance!