I believe that renting is a waste of money. I am interested in pooling my money with 3 of my friends to purchase a nice home where we can all live in for 3-5 years. We are all 25 year old males with different future paths. We make a combined 200k per year and we would attempt to split all costs evenly. Could this work? What should we do if one of us wants to move out? Would their be any problems later on with selling the house? Please help!!!!
2007-01-04 08:20:29 · 4 answers · asked by Craziness 2 in Business & Finance ➔ Renting & Real Estate
Thanks Uncle Jesse
2007-01-04 08:40:01 · update #1
You need to buy the house in an LLC or corporation. 4 owners of a corporation is not a problem, and the corporation can own the house.
I think it could work, but it will be tough. Girlfriends will eventually bother you (at least they do with me).
If one of the four moves out?
This could be covered in the articles of the corporation... a real estate lawyer will have to draw these up anyway. I would assume, the other members of the corporation would buy him out as a group or if one individual could do it by himself he would own 1/2 of the corporation/house and the other guys would only own 1/4. The guy with a half would have more decision making power.
There shouldn't be any problem selling the house later...
2007-01-04 08:31:55 · answer #1 · answered by John Stamos 3 · 0⤊ 0⤋
It would be less complicated for two people to buy the house, and less risk of being screwed if 1 person choooses to move. With 4 people there are a lot of minds to be made up!
If you buy it with 4 people, it might be difficult to get a standard loan, as most just have room for 2 borrowers, but if you check around it could probably be done. There's also the option of 2 people obtaining the mortgage and then adding the other two to the deed later-- HOWEVER, the two people on the deed only and not the mortgage would not be legally responsible for repayment. You'd have to trust that they'll kick in the money they're supposed to.
As far as if one wants to move out, that person would STILL be on the deed/mortgage unless the remaining people refinanced the loan- which involves costs, often several thousand dollars.
Selling would not be an issue, aside from the logistics of all agreeing on a sale price, and all approving a purchase & sale agreement and everyone feeling good about it.
2007-01-04 09:15:44 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No problems later with selling the house. Be carefull when you mix friendship with money. Some folks think differently about whose money is whose. The tough thing is going to be finding a home with 4 beds and 4 baths of equal value. Good Luck.
2007-01-04 09:02:45 · answer #3 · answered by Jim B 1 · 0⤊ 0⤋
You would need to approach this carefully and get any agreement in writing. If all four names are on the deed, you each own 1/4 of the home and would receive 1/4 of the proceeds from its sale BUT if your three friends stop paying their share, YOU are still responsible for the whole shebangs! You could take them to court to make them pay, but they could screw you and then still get 1/4 of the profit. You would have to take them to court to keep them from getting 1/4th. In the end they might have to pay up, but it would cost you lots of money for a lawyer to take care of it legally. It could get very messy. Setting forth a specific contract could help, certainly if you ever had to go to court. I'm just sayin', if someone stopped paying, it would be hell for the rest of you. If you couldn't pay, the foreclosure would go on everyone's credit. If you tried to sell before foreclosure, everyone would have to agree on it. Then you'd have to work out who owed what, and that could lead to court. Later, you might want to leave and they might want to stay and you'd be obligated to keep paying until they all wanted to sell. They could buy you out, but what if they don't want to?
Could be messy.
2007-01-04 08:43:12 · answer #4 · answered by Phoenix, Wise Guru 7 · 0⤊ 0⤋