Background Story; My fiance's best friend, recently going through a bad break up, has always rented (lives with her sister, her cats, and her sister's dog), but she thinks now it may be a good idea to finally buy as rents are high and even more difficult for ones allowing pets. She herself cannot afford the closing cost and down payment; there are town homes where the HOA does not allow it to be a rental for 2 years; my thought right now is, help with the down payment of a town home, have the mortgage in her name, but i'm listed as 50% ownership, where eventually I can have a nicer rental and buy her share out, for 50 cents on the dollar. Is there any risk other than my fiance being upset in thinking i'm taking advantage of a situation of her friend.
My reaction is that this is a bad idea.
First, you are becoming a business partner with someone who does not appear to be in a rational state of mind. What will happen once the storm has passed and she has a different mindset later on?
Second, doing business with friends and family is dangerous. If the deal goes South, do you lose your fiance or does she lose her best friend?
Third, it doesn't appear as if she makes good financial decisions if she has "decided to buy but cannot afford to buy." Is she a qualified tenant? Or, a higher hurdle, is she a good business partner?
Honestly, it sounds like you are trying to convince yourself that this is an easy way to get into real estate investing with someone else taking half the risk. There are too many downsides here for my liking. I would not do that deal.
She can’t afford closing costs or down payment ?
What makes you think she will be any better with the taxes the utilities the mortgage or the insurance ? This has bad news bears written all over it !