Advice Needed For Creative Financing with Family

[Misti DelMar]

Hello Pros! I'm looking for your expert advice :)

I have 2 sisters. We ALL want to start real estate investing.

By the end of 2021 or early 2022, we should all have a nice lump sum to put towards something.

I am the bravest investing sister, the other two are really afraid to go out on their own at first. So I thought, why not go in together on the first few until everyone is comfortable to go out on their own!? That's a good idea right? :)

My questions are:

• *Can 3 people have their name on a home and split the cash flow and equity 3 ways?
• *Can you use the FHA loan while going in with other people? One sister has already bought a home (also, one of us would live there for a year as per the FHA rules.)
• *If this is possible, where would we start? Call a mortgage office and see what we qualify for together? Unsure of step 1.

Any other advice you'd give me?

Thanks!!! :)

[Evan Polaski]

@Misti DelMar, generally you can hold title in multiple people's names, and there are different ways this can be achieved.  https://www.investopedia.com/a...

The mortgage will likely need to match the title, so anyone listed on title will need to be listed on mortgage. This could pose an issue with FHA financing, but that would be a question for the loan officer.

Lastly, I will second what David mentioned about lots of things in writing.  Primarily, how decisions are made.  What happens when one sister wants out, but other two want to hold on.  How is property valued in that scenario? What if other two don't have the cash to buyout the third?  Will the one living there pay rent to the other two?  How much?  Having everyone agree to the terms up front will only help if things don't go according to plan.