House hacking partnership

Upstate New York, New York
House Hacking
3yFollow

House hacking partnership

Libby Louer-Thompson
Member since 2022 · 2 posts · 2 votes

How would you structure a deal to buy a duplex if one partner is planning to live in the duplex and the other partner lives out of the area. I am about $50k short on my pre-qual for a duplex that I would like to house hack. My sister offered to help out but we don’t know what that would look like. 

1Reply
20 views

2 Replies

Jump to latestLatest
  • Nick Scannell
    Investor · Madison, WI · Member since 2019 · 11 posts · 12 votes
    3y
    Quote from @Libby Louer-Thompson:

    How would you structure a deal to buy a duplex if one partner is planning to live in the duplex and the other partner lives out of the area. I am about $50k short on my pre-qual for a duplex that I would like to house hack. My sister offered to help out but we don’t know what that would look like. 

    I don't have experience with this, but I love problem solving. My guess on what would make the most sense is to act a both an investor and a tenant. Assuming all things are equal (downpayment wise), it makes sense for you to get an equal benefit of Rent Savings + cashflow to your sister getting in cashflow. Start by figuring out what 50/50 would be if neither of you lived in the unit and made market cashflow. Then, your sister should get that in cashflow and you should get yours in rent savings + cashflow.

    Rough example: 

    PITI + Expenses = 2500

    Market Rents = $1500 each side ($3,000 total) 

    Cashflow if neither of you were living in the house = $500

    Your sister should get $250 a month, and you should get $250 in rent savings (You pay $1250 a month in rent as opposed to $1500). 

    Would love feedback on my thoughts if you (or anyone else) has them!

    0Reply
  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    @Libby Louer-Thompson this is whatever you would want it to be. There is no right answer. 

    Here are a couple of ways it could work:

    1. Negotiate a monthly payment to your sister in exchange for taking on the risk of co-signing with you.

    2. Give your sister some of the equity of the house in exchange for her tying up her ability to qualify for new credit by co-signing with you. 

    The Assumable Guy544 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free