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Innovative Strategies

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Nate Ramos
  • Worcester, MA
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Partnering on a House Hack

Nate Ramos
  • Worcester, MA
Posted Jan 11 2022, 18:43

Hi Everyone! I am considering partnering with a family member on a house hack this year. However, the family member will not be living at the house with me. I am curious how I might set up this partnership with the understanding that I will be doing most, if not all, of the management but also realizing the decrease in cashflow due to me occupying a unit. Would love to hear if anyone has done this before and how they did it, as well as any general options we could take for setting up this partnership.

Thank you so much in advance and I look forward to connecting with you all!

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Abel Curiel
  • Real Estate Agent
  • Queens, NY
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Abel Curiel
  • Real Estate Agent
  • Queens, NY
Replied Jan 12 2022, 12:35

Hello @Nate Ramos,

Great question as this can get tricky. 

I'd recommend splitting acquisition costs, major repairs/renovations and cap ex evenly. 

Monthly utility and routine maintenance costs can be your responsibility while you live there but I'd suggest having a pre-determined 'move-out' date. This way, you can both plan for that and have expectations set from Day 1. Once you move out, all expenses -utility, maintenance, management, insurance, etc. can be split evenly.

Just my 2 cents... curious to hear what other BP members would suggest..

All the best to you on your journey!

Abel

  • Real Estate Agent NY (#10401295960)

REbuild Team - eXp Realty Logo

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Nate Ramos
  • Worcester, MA
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Nate Ramos
  • Worcester, MA
Replied Jan 12 2022, 16:30

Hi @Abel Curiel I appreciate the response! I agree about having the pre-determined move out date as it would continue to eat into the cashflow for however long over the 1yr I stayed there (looking to do an FHA loan or similar alternative). I'm with you on everything else as well.

I am however curious of your thoughts on me paying a 'rent' to the other partner for each month that I live there. As basically a balance of the would be cash flow, had I not been living there. Does that make sense? If so, what do you think/what does anyone else think?

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Alex F chang
  • Real Estate Agent
  • Arizona
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Alex F chang
  • Real Estate Agent
  • Arizona
Replied Jan 17 2022, 16:45

I am in a similar position where the other family member and I go 50/50 in all costs and profits. We co-sign on the loans but it's his profile that gets qualified. 

I find, acquire, and manage the deal (I also live in it until the next house hack). So basically he's the passive investor and I am the active one.

Curious to see what are other's thought on this split and in your opinions, what would be a fair structure moving forward?