Buying a duplex with my sister for a first house a good idea?

Buying a duplex with my sister for a first house a good idea?

Member since 2019 · 11 posts · 1 vote

So I have been living abroad and will move back to Florida in about a year from now. I plan on living with the parents for a year to save up extra. By then I should have about 30k saved. I don't want to live with my parents for more than a year so I want to get a house. I talked to my sister about the idea of buying a duplex since we would have our own separate living spaces. She is also looking for a first home within the next two years. We both agreed we would be able to cut the costs down and get a home in the nicer areas of Orlando.

My sister is a TV actress and might move to Atlanta in a few years so she said she would rent out her half if she moved. I told her I was planning on doing the same once I get more properties. I also mentioned the possibility of buying out her half a few years down the road if she moves to Atlanta.

My thinking behind this to get access to a home quicker than I normally would be able to with my own money. And while we live there, I would save up and continue buying out rental properties while keeping my living expenses somewhat on the cheaper side. When I decide to finally move out, I would rent out my unit for extra cash flow. My sister isn't looking into real estate for business purposes. She just wants a place to live so I could probably buy out her half if she moves out.

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Rental Property Investor · Wiesbaden, Germany · Member since 2019 · 49 posts · 50 votes
7y

You don't NEED to partner with your sister to buy a duplex you're planning on living in. You can use an FHA loan and put 3.5% down on a duplex, triplex or quad. You'll be able to do that for 30k no problem, and you can still rent out one of the units to your sister if you want to. Just food for thought.

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  • New to Real Estate · Boca Raton, FL · Member since 2019 · 27 posts · 37 votes
    7y

    Sounds like a good plan but I would be sure to get it all in writing, a formal contract. We tend to get a little wishy washy when it comes to family. Sis might change her mind and decide she doesn’t want to sell her half. 

  • Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Miguel Matos I wouldn’t do this as mixing family and real estate is generally a bad idea, but that’s just me

  • Member since 2019 · 11 posts · 1 vote
    7y

    @Donald SaintVal

    If she decided not to sell her half I wouldn't really take it seriously. I could still rent out my half if I decided to go that route and she could rent out her half.

    @Caleb Heimsoth

    This is something that does indeed worry me. I guess I will wait and see how things go over the next two years. Though the thought of halving the entry cost to a home and get me out of my parents place is super tempting.

  • Rental Property Investor · Wiesbaden, Germany · Member since 2019 · 49 posts · 50 votes
    7y

    You don't NEED to partner with your sister to buy a duplex you're planning on living in. You can use an FHA loan and put 3.5% down on a duplex, triplex or quad. You'll be able to do that for 30k no problem, and you can still rent out one of the units to your sister if you want to. Just food for thought.

  • Member since 2019 · 11 posts · 1 vote
    7y

    @Travis DeForge I really want to go that route. The only problem is the FHA loan requires me to be working at the same job for two years and when I return to the states my clock resets. So it would take another two years to qualify meaning 3 years from now at the earliest. If I partnered I could get the place a year earlier, stay for a year and save, then use the FHA loan to get a new place, move in there, and rent out my old unit. That's my thinking at least. I am still new to this so I am unsure how exactly this works out but this was my thinking behind it.

  • Rental Property Investor · Wiesbaden, Germany · Member since 2019 · 49 posts · 50 votes
    7y

    @Miguel Matos, great point. If your plan is to stay there until you qualify for an FHA loan, then move out and rent out the first place, then I probably would go with your plan. As long as you have a very clearly defined scope of responsibilities with your sister. Treat it like a legitimate business partnership. Not a bad idea at all though.

  • Member since 2019 · 11 posts · 1 vote
    7y

    @Travis DeForge I am glad to hear that my plan seems realistic. For now this is the route I am trying to go.

  • Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    7y

    I don't necessarily agree with the FHA route because the numbers usually don't work out well with those. Run the numbers on that scenario. (can give some resources to help if you need them)

    As far as your sister though... it certainly can work, depending on the dynamic of your relationship. But I've also seen a brother and sister (both were my best friends at one point in time) nearly lose their relationship because they invested in a house together. It completely came between them for most of the years they owned it. That may not at all be you and your sister, but if you don't need to take that risk, maybe consider the options. Can go either way.

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