Invest in "parents" house?

Hello all,

I’m facing a tricky situation.

My mother and her ex-boyfriend build a house together 12 years ago. In a very good area. It’s a 4.5 house 3 bathroom, garden etc etc. Worth 700k. However, they are separating.

My mother cannot afford to buy his part of the house. He had invested 200k as “fond propre”.

I’m wondering if I should buy his part as an investment for the future. I’m investing every months in ETF. I don’t have any debt. Making 100k a year and being at the begining of my career. But never considered buying a home as there is nowhere I see myself living long term for the moment and I’m thinking wouldn’t that be the perfect opportunity to invest in half a house.

I know that until my mother would move out, I wouldn’t win anything. I can see her move to the appartement that she bought to our grand mother within 10/20 years. At that time I would have saved enough to buy the second part or do half on the rent we will get from renting it.

My mother is not especially attached to it. She is saying that she doesn’t need all that space anyway and consider buying a new smaller appartement with the money from selling that one.

I’m not sure to be very clear. It’s difficult to explain :sweat_smile:

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Isn’t that the simplest solution? (downsizing once kids are out often makes a lot of sense)

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Yes, you’re probably right. Maybe I’m the one more attached. :sweat_smile:

Thanks for the answer

As I see it, you have two options:

  1. You buy the property from your mom, with an initial down-payment of 200,000 (to cover her BFs portion). You would then negotiate a very low-interest installment plan with your mom for the remaining 500K. Of course, this option only works if your mom is accomodating, and doesn’t need/want the full 700K in one shot.

  2. You buy the property from your mom using a mortgage. 140K goes to the down-payment. The rest is funded by a mortgage. This option is likely more expensive (bank interest rates), but it eliminates risks like possible claims to the property by other heirs, etc. The only parties involved are you and the bank.

In both cases, your mom would have the option of giving you a special deal on buying the house.

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Another question is 700k the real value or the market value if they want to sell it?
Because there are not many houses 4.5 for that price at least in Zurich Greater area.

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To expand on that, the situation is different (in my opinion) if you are the only heir to your mom and nobody else has an interest in that house anymore (the ex-BF is bought out) than if there would be other heirs, in which case an agreement with them would also need to be reached.

If I were to buy this house, I would also seek an agreement with my mother that should she come to (re)marry, she would either choose a matrimonial regime that doesn’t commingle assets from before the wedding or she would give you the opportunity to buy the house from her before she marries.

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In my experience, keeping things very clear and straightforward saves a lot of headaches in the long term. So option 2 (buying the house outright) is preferrable in my opinion. You buy it. You own it. It’s yours. End of story.

Goodwill is nice, but life is long, and a lot of funny things can happen on the way. Special custom agreements are the perfect fuel for long court cases.

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I guess that would depend on whether her partner is content to recover his 200K, or whether he wants the capital gain as well. However, even if she would keep the house, he would still be legally entitled to his investment plus the gain in the property’s value (at market prices), if he requests it. So that would be the same whether she kept it or sold it.

Thanks all for the answers.

@Daniel I think your answer made me ensure that I don’t want to buy the house. Because I don’t want any favor from my mother. I want her to maximize the gain for her retirement.

I’ve my whole life to make money. She worked hard and deserve to be as relax as possible.

Thank you to make me realize her side of the story.

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