I grew up in Washington State and would love to build a dream cabin in the next couple years out in the mountains. The problem is that what I'm looking for would require a pretty big mortgage.
Two of my absolute best friends from childhood (whom I've lived with and get along with great) are talking about going in on a cabin for all of us to use and split 3 ways. Aside from all the house rules about usage, bills, pets, family, maintenance, etc., I'm not sure the best way to structure a potential deal.
The issue is the other two guys are both newly married. Frankly, I'm not sure their marriages will last. If one or both of them gets divorced and their spouses get half of their combined assets, I can imagine it would mean serious complications for the cabin.
If a divorce happens, I don't want it to have any impact on ownership or rights to the cabin between the three of us guys. Would that require both of the couples getting a postnuptial agreement before buying? Or is there a better way to keep the property between just the three of us and not the five of us.
I will first state that I am not experienced in this at all, but a partnership agreement between friends would always be tricky. I would talk to a lawyer to help out, but get agreeable terms that explicitly states what happens in the case of a divorce, such as forcing that couple to sell or surrender its stake at a pre-determined price the the remaining parties, or something like that would be good, and your postnuptial one might be prudent. You'll also want to plan for things like death, bankruptcy, excess damage done by one of the parties...
You'll also want to think about future generations, and getting split up down the road, or how it could be sold to someone else if someone gets in trouble and forced to liquidate and the remaining partners can't pick up the balance.
Thanks @Andrew Buchanan , those are some very good points. I know it's a tricky situation, so I guess I'll have to just be extra dilligent to cover all the exit strategies and worse case scenarios and get them on paper.
For sure. Everyone goes into these things with great intentions, and putting money aside, the worst possible outcome is a good friend turned into a not so good one!
Definitely get a lawyer. And before that, the three of you need to hash out all the what-ifs, including the stuff no one likes to talk about. Better to agree to it now, while everything is peachy and get it writing. Than try to figure it all out when things might not be so great.
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