- Associated Press - Saturday, August 29, 2015

HARVARD, Ill. (AP) - Alex Hathaway will start at McHenry County College this fall with the idea of going into sports management or business - but he’s also learning the ins-and-outs of real estate with his first investment property.

The 18-year-old Harvard High School graduate bought a duplex in Capron this month, using his own money saved up from birthdays and holidays, and from working for his dad to cover the down payment, but like many millennials he needed some help to get a loan in the tough credit market. His father co-signed on the loan.

“First, I wasn’t too keen on (the idea of buying the property),” Hathaway said. “The one thing I asked him was if I did this, could I do the sports thing. … That’s what sold me on it - the ability to have the freedom to do what I want.”

His father, Marc Hathaway, has been making investments in real estate since October 2003 when, as a construction worker, he looked for a way to supplement his income and minimize the volatility that came with the construction business. He now does property management fulltime.

“To me, it’s the ultimate way to build wealth,” the Harvard-based businessman said. “You have somebody else paying the mortgage for you and building the wealth for you. Sure, there’s the stock market, but you don’t have control over it.”

And Marc Hathaway is not the only parent making the decision to assist his son by helping him buy a home, said real estate agent Tyler Lewke of Lewke Partners in Crystal Lake.

Lewke is seeing a number of parents purchasing property for their children - either using it as an income stream to help pay for college or as the child’s first home.

About 17 percent of parents surveyed this year expect to help their millennial-age children purchase a home in the future, up from 13 percent of parents who said they did over the past five years, according to research conducted by loanDepot.

About half of those who expect to help think their contribution will be toward the down payment, the research found. About 20 percent said they would cover closing costs and 20 percent said they will co-sign the loan.

The increase comes as interest rates and housing prices remain low, Lewke said, adding he expects to see the percentage of parents co-signing go up and covering down payments go down as the housing market improves.

They’re using money that’s not performing elsewhere because real estate is more accessible as an investment strategy right now, Lewke said.

“This is a new thing that I didn’t see before,” he said.

The trend isn’t ubiquitous, however, Marengo-based real estate agent Alison Siambanis said, adding that she’s seeing something a little bit different: Parents who don’t want to sell their homes at current prices and so are retiring out of state, while a child rents their home.

She wonders if there’s a rural-suburban disconnect that makes the parents helping out less common in her territory.

“I don’t really have a lot of parents helping their children out (through co-signing or gifting a down payment),” Siambanis said. “Most parents I know don’t want to get involved. They’re having their own issues. They’re hurting, too.”

Assistance with the down payment also is looking like less of an option nationwide with 50 percent expecting to contribute in the future, compared to 65 percent having contributed over the past five years, loanDepot’s study found.

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Source: The (Crystal Lake) Northwest Herald, http://bit.ly/1CVWOfC

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Information from: The Northwest Herald, http://www.nwherald.com

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