House Hack with business partner possible?

Question

BP!

I am looking to buy a multifamily through a first time home buyer program like FHA or NACA.

Currently, I have great credit 730+, and the down payment ready but my only issue is my debt to income is a bit high.

A business partner from out of town is willing to partner up to buy the multi family.

Any ideas on how I can structure the house hack in order to overcome my hurtle of my current debt to income and involve my business partner?

Thanks!

Trenton Engle · Answer

Hey Nicolas!

You can definitely have a business partner co-sign on the home with you as a non-occupant borrower and use a program like FHA. Of course it is hard to say if that helps without looking at numbers, but I'll shoot you a message so I can try and help further.

Scott E. · Answer

As Trenton says, you can have the partner co-sign as a non occupying co-borrower to help with the DTI issue.

Regarding the structure of the house hack, if you will be putting up the down payment and managing the property, your business partner should just get a small % cut of the cash-flow for helping you get the loan. This is going to be up to you and your partner, but something like an 80/20 split sounds right to me (with you taking the 80% cut).

Nicolas Pretelt · Answer

Appreciate the reply Trenton & Scott!

My first option in that case will be to have the business partner co-sign as a non occupying co-borrower.

I am going to start contacting lenders. Thanks!