I have a friend who currently rents a 1 br for $725. I suggested he buy a property,he said he would but didn't have any money to put down & is unfamiliar with Real estate. He doesn't have any car loans, student loans or credit card debt. So I started to think how this could be a win win. He has agreed to purchase a duplex or single family home with me but only if I put the money down. He has excellent credit & was able to secure financing. It is a FHA loan. The loan amount is 125k @ 5% 3.5%.down.The payment is would be between $1050. He has agreed to split the investment 50/50 & live in one of the units or have a roommate. He has agreed to pay the same amount he was paying in rent, that would cover half the mortgage loan with the rest going to me until half closing cost are paid back. Is there anyone who has done this type of investment? I think I would need to do a quick claim deed once property is purchased to have 50% ownership. Is this correct? What does a quick claims deed do exactly? How would you guys structure this deal? What legal documents would I need ect..? If. I move forward should I use my own for the down payment or borrow it at 5-7% 36 months. Thanks in advance.
@James R. it's good that you are trying to be creative and find a way to make a deal work, but there comes a point when there are just too many pit falls to make deal worthwhile. You would be the friend, landlord, private lender and co-owner all at the same time. That's beyond creative!
The term you are referring to is a quit claim deed. That couldn't be used on this property until a year after the purchase if you are using FHA financing. Your friend would have to disclose your loan for the down payment, which probably would not qualify. I'll just stop here ...
Thanks for your advice. It is much appreciated
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