Keeping a house I bought with my ex as a rental.

[Todd MacDonald]

Hello BP community. My girlfriend and I own a house together we bought 6 years ago. We are moving different directions in life and have mutually decided splitting up is in the best interest of both of us. We get along still but we both want different things and to move in different directions. We were going to sell the house and move on. We have a mutual friend who is a mortgage broker and he suggested if neither of us need the money right now we should put the house in an LLC and get a property management company to handle it and split it 50/50. Here is the dilemma. If we sell we will both conservatively walk with around 40k a peace possibly more but I don't see any way it would be less. I want to purchase a multifamily but after searching the market and running the numbers I don't think using that 40k as a downpayment I can find any properties that even come close to the 1% rule. More like 0.5% is what I'm finding. So heres my question BP. Am I crazy for even considering keeping the house with my ex? We'd have a lawyer write up all the contracts, put it in a LLC and have a property management company handle it. Is this a nightmare waiting to happen? After mortgage, insurance, property management company, taxes we would probably only make $200 a month total which would go into an account for repairs, improvements and vacancies. Has anyone ever done this before? Is it a really stupid idea?

[Drew Sygit]

@Todd MacDonald how likely is your relationship with the "ex" to stay friendly or will it deteriorate more over time?

What will happen when you need to put money into the property from your pockets? 
- Will they be willing to do so?

There are probably a LOT more issues that can go wrong, so a LOT more reasons to sell now and invest on your own!

BTW: if you do decide to keep it and rent out together, you will NEED a partnership agreement to set the rules about how issues that will come will be handled.