Pre-marriage: buy investment property now or wait?

Question

Hey BP community, newbie here. My fiance and I are both excited about investing in real estate and are wondering if you can help us with this-- should we wait until we get married to buy an investment property together or can we buy before we get married without much headache/hassle later on?

Our wedding is in 4 months. Our credit scores are about the same. Our incomes are about the same. We won't be living in the property. I can't imagine a scenario that would cause us to not get married, so that's not a concern. We're both very on board with investing, so that's not an issue either.

Any pros/cons to waiting to be married versus buying now? I'm sure waiting until we're married would be easier, but are there any pros to investing now? Any interesting hacks?

Thanks in advance for your advice!

Charlie Fitzgerald · Answer

Wait.  The fact that you cannot imagine a scenario where you do not get married does not meaning does not exist.  Additionally, for estate planning and taxes it will be better to buy jointly owned real estate as man and wife.  Congrats on the pending marriage.

Jeff B. · Answer

You can change the "VESTING" anytime and not risk Due On Sale.  On the PCOR, just make that note, sales price=0, taxes due =0

Tea Houck · Answer

Incredible responses everyone, thank you. Thanks for pointing out the difference between us both being on the mortgage versus the title. We're hunting right now and don't have a property lined up yet, though we are thinking multifamily. You're right, the wedding stress is already pretty high (lots of moving parts, 250 guests) so maybe we should wait until after the wedding.

Until then, lots more to learn anyway. Perhaps the market will even correct itself here in the bay area...

Rob Campbell-Nixon · Answer

I would agree with your "I'm sure waiting till we are married would be easier".  You are about to get very busy and stressed out and I would say focus on each other and enjoy this time in your life.  I just got married in October 2015 and bought my first property in March 2015 and its gone well, but I closed more than 4 months ahead of the wedding.  You don't say what type of property you're looking for but multifamily can take 4 months or more to close and being gone and trying to close a property or get one up and running would be a hassle.  You have to find a property, negotiate price, schedule inspections, tenants have to be notified in advance usually 24 to 48 hour minimum, re-negotiate price, schedule appraisal, notify tenants again, wait for them to send all info to the bank, the bank to review everything, and schedule a closing date usually several weeks out.  It can be a long process.  The first property I tried to buy fell through because the tenant wouldn't let the appraiser on the property and called the police. Needless to say I moved on before the owner could evict her and eventually sold the property to someone else.   Also do you have a management company in place or the business structure and all the leases and documents you need? Is the property occupied or would you have to find a tenant?  If you have an amazing deal and the management structure in place I would try to get it closed as fast as possible! If not just wait   Good luck!

Dustin Heiner · Answer

Hi Tea,

This seems more like marriage advise which is altogether to be taken with a grain of salt.  That meaning, I would suggest you should listen to all the advise and take the advise that fits you and your fiancee because your relationship is different then mine or anyone else.

In my opinion, marriage advise is different than Real Estate Investing since that is more of a technical skill and applied knowledge.  If you know how to analyze the numbers, know your business, know your area, you will most likely do just fine in real estate.

I personally have did premarital counseling for many couples and have a small bit of advise to share that you can take or leave it. :-)

1. Marriage is a journey that is meant to be till you die.  Every move you make now can effect the future of that marriage.  I would suggest building your marriage first.  The first year of marriage is rough because you have two lives coming together in an entirely new way.

2. Real estate investing is also a journey and the earlier you start the better.  Education is the first thing I would start immediately if I were in your shoes.  I would get as much education as possible since the more educated you are the better informed your decisions would be.

3. Be patient. I would take the next 4 months until the wedding to learn as well as enjoy your engagement.  This is a time you will never get back so don't fill your time with things that will distract you from your engagement/marriage.

4. After you get married, I would then focus my efforts on learning even more and analyzing deals.  Be patient and wait for a deal that is TOO good to pass up.  I found a deal recently where I am now making $800 per month in cash flow from one single family home because I was patient.

So, I would suggest not to invest in a property but invest in your education on real estate investing.  After you are married work together to buy your first property and you will be successful.

I hope everything works out well for you.

God bless!

Dustin

James Ehrig · Answer

I closed on a property May 19th and was married on June 19th.  No need to wait.  If you plan on buying multiple homes, as @Simon Shih and @Jesse Hinaman mentioned, make sure if only one of you can qualify for the home, then buy it separate in order to maximize the number of loans you can each have in your name.  It will also be easier to qualify later because it will not show up on the others credit report.

Ana Marie B. · Answer

@jbeard is right. My husband and I closed on our SFR in SF Bay Area 10 mos. before our big wedding (200+ guests) and were fine.  Of course the entire process was stressful as heck, but well worth it. After our wedding we had a renovated home to move into.

Believe we went in as tenants in common. We later refi'd and were able to amend our status then.

Jeff B. · Answer

Calif is a community property state, and as of your wedding date, all property owned by either become common, "community property" unless there's a pre-neptual signed beforehand.

Read up on Joint Property, Tenants in Common and Community Property.  Each has a meaning the effects the inheritance by the remaining spouse. You do your own research, but we have specified Community Property for everything we own.

John Cohen · Answer

@Tea Hock go make it happen!! don't wait

Jesse Hinaman · Answer

@Tea Houck there are two questions within your question.

How you hold title and who's on the mortgage are two seperate things.

As @Simon Shih mentions, if one of you qualifies for the loan on your own, it would only be detrimental to your future financing opportunities to have both of you on the mortgage. The full amount of the loan will show up on both of your credit reports; but if only one of you is on the mortgage, then it will only effect that persons Debt to Income (DTI). The other person who is not on the mortgage, could go and apply for another loan on there own and would not take the Debt hit of a mortgage.

If you're concerned about both being on title, you can quitclaim 50% of the property ownership to the other person after the deed of trust and grant deed is recorded. Could literally be done the same day.

Pre-marriage: buy investment property now or wait?

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