Buying out half a house

[Joseph Calabrese]

My in laws have a 4 BR in a rapidly appreciating area on the outskirts of the DC metro area. They want o move to Florida and don’t have enough capital to keep that property and buy a new place. I want to buy 50% of it from them so we can keep the place, they can keep their place and I can invest in a solid property. How would you structure this deal?

[Mitch Messer]

Hi @Joseph Calabrese! This is a perfect opportunity for you to buy with seller financing!

First off, I don't like 50/50 ownership of real estate, since it leaves doubt as to who has the final word. This is particularly problematic when family is involved.

Instead, I'd have the in-laws sell you the property outright and accept 50% as down payment (assuming they would need that much to purchase the new place in Florida). They could even receive reasonable finance payments from you each month, funded of course by rents from your tenant. 

If they insist on enjoying some of the upside when you eventually sell, you could give them an option to lock in some of the back-end profit.