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Updated about 2 months ago on .

User Stats

6
Posts
8
Votes
Justin Albrecht
  • Rental Property Investor
  • Kalamazoo, MI
8
Votes |
6
Posts

Brother and Sister Househack growth strategy

Justin Albrecht
  • Rental Property Investor
  • Kalamazoo, MI
Posted

Hi All, 

I own 3 small multifamily properties in Kalamazoo, Mi. 2 of them have been house hacks and i'd like to continue using this strategy for all it's benefits. I'm curious if i could partner with my sister so she could potentially get into a yearly house hack too. 


Here are the key points of my thinking:

-Gift down payment funds to my sister so that she could buy a 2,3 or 4 unit home as a primary residence. She is a server, makes roughly ~30k per year and does not have much in savings. 

-My sister would buy property under her name and live in one of the units for at least 12 months. 

-I would manage the renovations, maintenance and tenants as I currently do with my own units. 

- Sometime after closing, sign documents to finalize 50/50 or similar % split ownership.

As of now I think this scenario could be win-win for both of us. I could help my sister purchase her first home with zero dollars out of pocket, she'd build equity and eventually split cash flow when she moves out. For myself, i can get into 50% of a new property by leveraging extremely low money down, my sister (should be) an easy partner/tenant to manage, she'll care for the property while she lives there, and it would allow me to purchase more than 1 property per year if I'm trying to only leverage primary residence loans/house hack.

In my market it's fairly easy to find a 2-4 unit home that hits the 1% rule (even at 5% down) and for a total cost of 100-200k. My sister currently rents one of my units so we are already in a similar arrangement. Goal is long term buy and hold. 

Would a partnership of this sorts be legal? Has anyone done something like this before and had success?

Thanks for the time!

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