FHA Mortgage with a Partner

[Andrew Emery]

Hey everyone,

I am very new to real estate investing, and in fact haven't yet graduated from college. However, upon graduation I hope to acquire a duplex using an FHA mortgage and rent out the other unit. My question: is it possible to obtain an FHA mortgage with a friend, where he and I would live in one of the units, splitting the cost of the mortgage, while tenants pay to rent the other unit? Is this type of partnership impossible with FHA? Would forming an LLC alleviate any issues regarding this? Any help is appreciated, thanks

[Jon Holdman]

Because you both have to agree on any decision. That will seem easy now, but I can tell you from experience it is not. At some point, you will want to do one thing and the partner something else. Eventually, you will have to come to a decision. Feelings will get hurt. Your friendship will be damaged, perhaps irreparably.

Why bother? If you can qualify for the loan on your own, buy the place. If you friend wants to live there, too (in your unit, I assume you mean), have him or her pay rent. Much simpler. You're in charge of the property. They're just paying rent, so can leave whenever they want. If you do have a falling out, you don't have a property to divide.