Ready to buy a house with a friend of mine...co-ownership.

[FP]

Originally posted by: CTrain

Originally posted by: binister
Bad idea. You are taking on the majority of risk in this situation. If the house goes down in value they only have $10g's to lose. You have $30g's to lose. If you are forced to sell in a down market and all of the total down payment is lost do they then owe you $10g's to make up the difference?

And yes the market can and will go down...

In my 20 yrs + of living in Orlando, I have never ever seen a brand new house go down in value...ever.
Houses just don't go down in value...especially new ones.

Also, the extra $20K I pay is a seperate entity.
I would get the $20K plus 5% interest no matter what happenned.
If for some miraculous unforfunatel circumstances that the house goes down in value...we would share the loss of our $10K.

So you get your $20g's plus 5% back even if the house loses 15% in value? How are they going to pay you? They will have all their money tied up in a house they are upside down in.

"If past history was all there was to the game, the richest people would be librarians." Warren Buffett

 

[CTrain]

Originally posted by: mercanucaribe
You're at the top of the food chain at McDonalds?

You can somewhat say that

 

[Zombie]

Your idea will compete with "Pet Rock" idea for the worst idea ever.

 

[yoda291]

If I was going to do something like this (and I likely wouldn't), I would equalize out everything amongst all 3 parties.

assuming you want to put down 40k down, I would contribute a third of that as my stake and expect the other 2 people to put down the same. The only difference here would be that you'll be lending them the money to cover out their end. I'd have a promissory note written up so that they can pay off that loan as fast as possible(since they seem to make more money than you do and would be saving anyways).
Then it's easier to figure out things. Everything gets split into thirds and everyone has an equal involvement and now you have money from a loan coming back to you.

If you want, you could split things into halves as well. you contribute 20k to the thing and loan out 10k. Then you'd be responsible for half of everything and they would be up for half as well.

 

[CTrain]

Stop factoring in the GF as ownership.
I will have 1/2 equity and he will have 1/2 equity.
She will pretty much be the renter.

I was 99% sure I'm going to do it.
After so many negatives replies, I'm still 95% sure I'm going to do it.
I just need to think of every possible scenarios and put it in writing.

 

[Budmantom]

Originally posted by: CTrain
Stop factoring in the GF as ownership.
I will have 1/2 equity and he will have 1/2 equity.
She will pretty much be the renter.

I was 99% sure I'm going to do it.
After so many negatives replies, I'm still 95% sure I'm going to do it.
I just need to think of every possible scenarios and put it in writing.

Your idea can work but it's not fool proof.


Tom