Buy a Property with a friend using FHA Loan

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Buy a Property with a friend using FHA Loan

Nicholas Lisauskas
Investor · Aurora, IL · Member since 2013 · 8 posts · 1 vote

Hi all,

A friend and I are interested in purchasing a 4-unit multi-family property together to live in and rent out the remaining 3 units within the next 6 months or so. Two questions:

1) Can we get an FHA loan together on the property so that we only need to come up with a 3.5% down payment?

2) When should we realistically begin making offers and looking to buy a property if our goal is to move in during the August/September time frame?

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Nicholas Lisauskas:

    Hi all,

    A friend and I are interested in purchasing a 4-unit multi-family property together to live in and rent out the remaining 3 units within the next 6 months or so. Two questions:

    1) Can we get an FHA loan together on the property so that we only need to come up with a 3.5% down payment?

    2) When should we realistically begin making offers and looking to buy a property if our goal is to move in during the August/September time frame?

     1 - Yes. But understand the legal and financial risks involved with buying a property with a friend.  Make sure you have some sort of document outlining everything

    2 - Now.  It can take 6-9 months to find a place.  Just don't rush it.  Don't buy a bad investment just because you have a deadline

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  • Nicholas Lisauskas
    OP
    Investor · Aurora, IL · Member since 2013 · 8 posts · 1 vote
    10y

    @Brie Schmidt Thanks for your response! This may be an obvious answer, but could you elaborate on the "legal and financial risks" involved with buying a property with a friend?

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    10y
    Originally posted by @Nicholas Lisauskas:

    @Brie Schmidt Thanks for your response! This may be an obvious answer, but could you elaborate on the "legal and financial risks" involved with buying a property with a friend?

     What if he files for bankruptcy?

    What if he wants to sell? can you buy him out, do you have to sell?

    How will the profit be split?  If nothing is in writing then that could be argued in court

    What if years down the road you want to move out?  What will he pay? What if he defaults and you lose the house?

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
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  • Ryan Koehler
    Arlington, VA · Member since 2013 · 115 posts · 40 votes
    10y
    For an FHA loan, do you have to secure financing before making an offer on a property? Thank you in advance.
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