We currently live in a 2 family rental together but we each want to own our own property. We hope by combining our 3 incomes, we could more easily afford to buy a 4 - 6 family building - giving each of us a 2 or 3 bedroom apartment to live in with a rental apartment that will provide income to help towards the mortgage. We feel comfortable enough with each other to do this but understand that legally we need to protect ourselves from any uncertainties. What do we need to do legally to form a partnership to safeguard ourselves from any financial mishaps on the part of the others?
2007-05-14 07:05:32 · 5 answers · asked by YAH IS GOD 2 in Business & Finance ➔ Renting & Real Estate
Depends in part on the laws of your state and to what degree you want to restrict the other party's ability to sell their interest. The two lowest cost ways are probably either a general partnership or an LLC. Remember you will all be responsible for the entire mortgage do you should consider what will happen if one of you is unable to make his payment. Talk to a local real estate attorney.
2007-05-14 07:21:29 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Well, there are a lot of answers to your question. You could form an LLC, limited liability Corporation. Or you could purchase and off the shelf number corporation and then distribute shares according to the financial investment of each of you. There's a pretty good book called "The 36 hour Real Estate Course" see link for info. Which would be helpful for more than making this particular decision. However I would suggest seeing your local real estate lawyer. Many of them will charge you a minimal fee to answer this question and can set up any entity you decide upon for less than it costs to do it yourself. (I'm computing price based on your time as well as any mistakes that can cost a bundle)
I'm not a lawyer, and I have no financial or other interest in the book posted. I do own rental property.
2007-05-14 07:20:18 · answer #2 · answered by jakehardesty 2 · 0⤊ 0⤋
Contact an attorney who practices business entity formation/corporate law in your area. You can find one at the site listed below. Remember if that all three of you buy it together, and one of you cannot make the payments, the other two will have to make those payments. A bank will not just foreclose on the person who is not able to pay, the bank will take all of you into foreclosure.
2007-05-14 07:16:19 · answer #3 · answered by mcmufin 6 · 0⤊ 0⤋
Letting her get away with that is the worst thing you can do. WHen you hear noise: CALL THE POLICE. If the police come and say "Well we cant do anything", then ask why you get fined when she calls the police on you when there is NO noise. Parking spot? Call Parking Enforcement and have the vehicle tagged/towed. Tell them you are renting the apartment, and somebody's car is on half of your spot. If they get drunk and are fighting, definitely call the police. If she asks you why you did that when she's sober or her parents ask, answer honestly (if at all). "We dont do anything and she calls the police on us. She is the one always getting drunk and fighting, and I cant use my parking spot either. Of course I had to call the police. She should expect the same treatment she gives other people"
2016-05-17 23:34:54 · answer #4 · answered by ? 4 · 0⤊ 0⤋
I would suggest you consider a LLC. Look up the requirements for your state. All rent would come into the LLC and each of you would be protected if one of the others lost their jobs (as the LLC would get its payment first).
2007-05-14 07:14:41 · answer #5 · answered by professorc 7 · 0⤊ 0⤋