FHA Joint Venture Partnering in LA/OC area

2 Replies

Here's the idea

Interest rates are so low that it's offsetting the big housing price increases we've seen in Southern California. That is, your monthly payment is still very affordable and will still let you cash flow, with low money down through a FHA loan with a first time home buyer.

I know quite a bit of people in their late 20's, early 30's that are perfect candidates for FHA loans but just need the extra push; whether it be through taking care of the landlord duties, or even helping with down payment funds.

Here's an example situation and please let me know if this is possible

A friend of mine in his late 20's and qualifies to purchase a 2-3 plex at $500,000. Can I joint venture with him so that he purchases the property with an FHA loan under his name and all he has to do is live in one of the units? I would handle the landlording and take care of everything else (maintenance/repairs), and in a couple years we sell the property at a profit or possibly sell the mortgage with a wrap at a much higher interest rate than what we see now (4-5%)? Does anybody have examples of deals they have done in the past?

@Jeffrey Magenes I think you need to talk to a CA attorney about the JV agreement you want for this type of arrangement if it's legal?

Generally what you are talking about is you offering property management to your friend. That requires licensing when done for others in some states, so you need to check on that?

If you are providing any portion of the down payment, that will need to be disclosed on the credit partners loan application.

You would not be on title to the property if it's an FHA loan. The loan will be in the name of a person, not an entity.

Just a little food for thought.

Joint venturing is ALWAYS a great thing in Real Estate investing.

But @Jeffrey Magenes you want to make sure things are set up correctly from legal and rights of ownership stand point.

FHA has many restrictions when it comes to investment property. You would be well to follow @Robert Leonard advice and seek counsel from a real estate attorney, if you are serious about pursuing this type of arrangement.

Some attorney's will provide a free consultation and only charge you when it's time to draw up the documents.

Create a post here on BP and request recommendations for Real Estate Lawyers in your area. You may be suprised of the response.

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