Los Angeles, CA · Member since 2014 · 33 posts · 6 votes
I am looking at purchasing an investment property with a partner where we each will be putting up 50% of acquisition costs. Property is a condo. Was planning on owning property as Tenants In Common on title while loan will be in my name. Any downsides to owning investment property this way? Am I overlooking anything?
Real Estate Agent · Denver, CO · Member since 2019 · 161 posts · 176 votes
5y
@Richard V. I’d make sure you have a strong and specific agreement. Make sure the future goals and plans are aligned between partners. Some downsides would be if a partner decides to sell their part to someone else or if someone defaults on their part of the payment. I have seen this happen personally where a partner can’t come up with their side of the payment and then the other partners have to pay more to cover, which could get messy and cause resentment. Lawsuits can happen in these situations, and if partners can’t come up with the missing portion, then their is a risk of default. There are lawyers who will sit down with all partners involved to discuss every possible scenario, and this is a great idea. Know who you are “getting in bed with” as they say. I am not an attorney and this is not legal advice. Hope this helps!
Real Estate Agent · Denver, CO · Member since 2019 · 161 posts · 176 votes
5y
@Richard V. Having the loan in your name will put more of the risk on you so definitely be careful. Hopefully you trust this partner completely and can cover all expenses if they bail for any reason. Sorry, missed that part on my first answer!
Los Angeles, CA · Member since 2014 · 33 posts · 6 votes
5y
@Bryan Balducki Thank you for the advice! The partner would be a family member to help get her started in RE investing. I trust this person and wanted to give her half ownership since she is putting up half the funds to purchase. Was thinking we could split expenses as well down the middle as well as tax benefits.