Group House Hack - Bad Idea?

[Michael Guay]

Hi,

I'm currently in the process of looking for property to house hack in the Boston area after I graduate college in the spring. Since Boston is such a hot market and prices are much higher than other markets, I was thinking about going in on the house hack together with some friends so we could pool our funds together and put down a larger down payment to get a larger/nicer property.

Beyond the normal concerns of going into business with friends, does this seem like a bad idea? I'm curious as to what others think. We would all be on the same page regarding the exit strategy, and I'm also wondering if logistically it makes the most sense to form an LLC since we'd be combining our assets together.

Thanks for your time,

Michael

[Jonathan Bombaci]

You can definitely buy with a friend to make it easier. Real Estate is odd in the sense that partnership tend to be easier since it revolves around a physical asset. I think buying with a friend is a good idea if you can’t do it on your own.

That being said Id avoid putting it in a llc. By putting it in a llc you now are ineligible for the low downpayment loans. Banks will see it as a strict investment property which will require 20-25% downpayment.