What is the best real estate partnership for two friends buying a residence together?
Chuck F asked:
My married friends and I are considering buying a house together, to be used as our primary residence (not as an investment property). We have somewhat disparate credit (I have a 700 FICO but less income and they have a 625 FICO but better income). They are very trustworthy and longtime friends, so the credit issue isn’t a concern. What would be the best option for a real estate partnership?
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My married friends and I are considering buying a house together, to be used as our primary residence (not as an investment property). We have somewhat disparate credit (I have a 700 FICO but less income and they have a 625 FICO but better income). They are very trustworthy and longtime friends, so the credit issue isn’t a concern. What would be the best option for a real estate partnership?
December 30th, 2008 at 12:53 am
My opinion is don’t do it. It’s a great way to ruin a friendship. If you do decided to do it anyway, I would hire a lawyer and write a contract explictly outlining all the possible potential problems that could arise from the business/monetary relationship. Even then, I beleive you cannot be fully protected because any liens/judgements against one party could potentially become the obligations of the other.
January 1st, 2009 at 8:24 pm
One that involves a lawyer, cover your butt
January 2nd, 2009 at 11:11 pm
Put everything in writing. It might seem petty now, but it wont be later when and if you need it. It needs to be clear who pays what and when. Taking the time now to think of things like repairs, insurance. If your planing on living in the same home with a second family that even should be more defined. Do you want to live with someone that dosent think that doing dishes daily is necessary? It seems silly now but it wouldn’t be if you make clear rule and standards of living.
Think twice or even three times. Buisness with friends usually ends with nothing… no friends no buisness.
Good luck!
January 3rd, 2009 at 2:34 am
You really want to do this? Friends now…you never what is always said. Never mix business with friendship. Your need to see an attorney to establish how you will hold title to the property. Tenancy in common, joint tenancy, etc. You cannot hold title in Tenants in the Entirely because this is for married people who buy property together only. Things to consider…What if they get mad at you or vice versa. What happens to the house? Who buys who out? Will you guys own the propery each at a third or they will own one half and you the other half??
January 6th, 2009 at 11:25 am
You don’t need a partnership. When you purchase a property, you will record the deed as Tenants In Common.
There are different entities, but this is the easiest.
On the deed it will say, “Friend Male and Friend Female, a married couple and You.”
I would clearly state the fractional difference. What this means, is your couple owns 50% together, and you own the other 50%. Or, you each own 33 1/3% of the property. You will have to decide what that is. I would suggest that you yourself own 50%, but you will have to pay 50% of all the expenses, taxes, insurance, repairs, etc.
Should any of you decide to sell, you can sell your fractional proportion.
Good Luck.
January 7th, 2009 at 4:40 pm
Why would you do this? And better yet why do your married friends want to have this as their primary residence? Weird.
Anyway trust me its a bad idea. Just leave it alone