Purchasing Property With Another Family Member
First time posting on the BP forums so please excuse the green behind my ears, but I appreciate any and all insight here!
I'm looking to purchase a first residence in the Providence, RI area for house hacking purposes. I, personally, am a first time home buyer with what I believe would be considered excellent credit and sufficient income. My original plan was to focus on a multi-family and rent out the unoccupied unit + unoccupied rooms in the unit I plan on occupying, or a single-family and rent out the unoccupied rooms. In my head, I was planning on putting anywhere up to 10% down with most properties I've been seeing are listed (although I've heard the bidding is crazy in the area) around $300k, give or take.
However, my family member that is financially independent and is sitting on a sizable amount of liquid assets (mainly cash, brokerage, and penalty free distributions from retirement accounts since they are of age) that has always wanted to purchase a rental property. This family member is happy that I am expressing interest and would love to be a part of a first rental property. They are not overzealous and I'm sure this may be a one-time endeavor for them, but we have discussed what our interests are and are seeing eye-to-eye on this.
This family member purchased their first home with 20% down, was quick to pay off their mortgage, and has always lead a debt free life (as do I at the moment). They are adamant that they do not want to pay PMI and would want to put down at-least 20%, most likely more. They don't mind putting up more cash up-front relative to my contribution while remaining equitable partners.
With the context out of the way and getting to some actual questions...
- - The thought is that the property would be under my name. With funds coming from both myself and the family member, how would this be viewed by a lender? Would there be any potential roadblocks to consider?
- - How do these partnership approaches generally get structured from a legal/contractual perspective?
- - What are some key action steps you might advise for a first time investor/buyer? Things to consider in Providence, RI specifically?