Topic: Big offer from the Father….

Hey guys, I’m looking for a little Mustachian input.My father is a landbaron in Omaha. He has 6 rental properties to his name, and they are all, as he puts it, “cash cows.” They’re all in the same neighborhood, and they have a homeowner’s association that makes them effortless to manage. The houses cost around $130,000, and from each property my dad collects about $1200/month.

He gets no phone calls from angry tenants, ever, and no tenant has ever missed a payment.

Sounds amazing, right?

Now Dad just called me this eve. He’s going to buy another property in the same neighborhood, and he wants to put my name on the lease.

I think he has enough money to pay for it up front, and I think in effect I will just be paying him “under the table” for an increasing percentage of the home equity, as well as an increasing percentage of the rent.

This means that I’d be paying no interest on a mortgage, and no taxes either. Seems too good to be true!

My question for you guys: should I walk down this road? If I were to do this, I’d want to pay half of what I’m saving per month (about $3200) to my Dad, and save the rest into Index Funds.

Is that a good idea? Or would I be better off turning down my dad’s offer and going 100% index funds? What do you guys think? Anybody have any experience with this choice?

What to do with the credit cards we have paid off already?

Your credit score is based, at least partially, on the amount of available credit that you do not use.  If you can withstand the temptation of using these, and they do not charge any annual fee, you could simply put them in a safety deposit box and let them gather dust.

Of course, if you never intend to take out another loan in your life, then you could destroy the cards since your credit score would have relatively little impact on your future life.