Anonymous
Anonymous asked in Business & FinanceRenting & Real Estate · 1 month ago

Selling paid off house for 280,000. What should I do with the money?

My father passed away a few years ago but paid off the house before he did. My family is recieving about 280,000 after closing. My mom was a housewife and works at a part-time job at a grocery store making about 1,200 a month and my brother is a college dropout who just plays games all day and has a part-time job at game stop. My mom put me in charge of managing this cash and I have thought about some things but need some advice since I am fairly young (21 years old). I am going to transfer next semester to a university and have thought about us living with a family friend and keeping the cash in a HYSA and using it as a down payment for a house after I graduate college. I have also thought about using a little bit of the cash to invest in real estate either while I am in college (house hack ) and build up some equity and passive income. Another option is for us to buy a house with less property taxes and expenses so around maybe 200-210,000 if possible but I am worried that with both my mom and brother's salary we still won't have enough to pay for all the expenses.

6 Answers

Relevance
  • 1 month ago

    First of all, who's money is it? If your Mom & Dad were married then this is your Mom's money. Be very careful about spending it because if your mom's health declines and she needs to go to a nursing home, and you need state assistance to pay for it, they can audit her finances for several years back and if they find out she gave you this money they can deny her care or demand that you repay the money to her.

    I Think your best/safest option right now is to find a place to park the money with very little risk and a modest return on your investment.

    A money market account at a local bank or credit union is a decent place to start, but you will probably make less than 2% interest so I wouldn't leave it there for years and years.

    If you think its going to be a few years, then consider going to an investment broker and asking them to set you up with a conservative investment mix that minimizes risk. They should be able to structure a very safe combination of cash, bonds, and blue chip stocks that will earn you 3-5% interest with very little risk of losing any money.  Just watch the fees - especially the upfront fees for opening the account.

  • ron h
    Lv 7
    1 month ago

    Your mother comes first.  Your mother is going to need a lot of savings to take care of herself when she retires, and on $1200, there's not much to save.  You and your brother need to find a way to take care of yourselves.  

    .

    I expect that with 5 years you and your brother will have pissed this money away and your mother will be old and poor. 

  • 1 month ago

    Putting you in charge of "managing" the cash does not give you the right to decide who gets what portion of it for himself.  The Will/Trust must be followed.  Find out from your mother if it was all left to her or if any portion was designated to you and your brother.  If it is all hers, which IS the case in about 99 percent of cases.  It belongs to the spouse.  If it is hers, then determine whether she can afford the house in the future, on her income.  You may have to suggest that she sell the house and buy a smaller one, that she can afford.  Unless the son is working or going to school full time, she needs to kick out the parasite.  Suggest that she gives him 30 days to find a job or move out.  Talk to the financial advisor at your bank about "your mother's" money.  If any portion is yours, talk to him about your portion too.  If you have a small portion, I suggest a short term CD.

    Source(s): Certified Paralegal, with 25+ years' experience.
  • Amy
    Lv 7
    1 month ago

    It's good that you're thinking about the taxes and maintenance costs of owning a house. Waiting until you have a full-time job before committing to a house is a smart decision.

    Also keep in mind that this is your mother's money, not yours (unless the will says otherwise). If you spend it on a house and then pour your own money into taxes and maintenance, the house still belongs entirely to your mother.

    There are real-estate investment funds if you really want to invest in that rather than stocks or bonds but aren't available to be a full-time landlord. But that's still pretty risky for money that you want to spend on your own house in a couple of years. HYSA is a good place to hold money for a short term until you graduate and/or figure out what you want to do with it.

  • How do you think about the answers? You can sign in to vote the answer.
  • 1 month ago

    You find a financial advisor at a place Edward Jones or a similar place.  You sit down with your that person and your mom.  They will talk to you about your mom's financial goals and expectations for this money.  Then they will advise you what to do and even manage the money if you like.  

    You don't have the knowledge to do this correctly.  Few people do.  I don't because that's not my expertise, but I'm smart enough to know that.  I also don't change the brakes on my car or give myself brain surgery.  

  • 1 month ago

    High yield savings account is not "high yield".  It almost not yield.

    The money is not your money to invest in real estate.

    It's your mom's money to live the rest of her life.

    How old is mom?Is mom going to have any other retirement money?

Still have questions? Get your answers by asking now.