College Students Partnering on Deal

[Miller McSwain]

My friend and I are interested in investing in real estate while in college. We have recently found what we think is a great deal. If we decide to purchase this property, we plan on getting a conventional loan and splitting the downpayment. 

I've thought of two ways to do this:

1. I can give my friend part of the downpayment and he can secure the loan.

2. We can both be put on the loan and each contribute to the downpayment.

I'm unsure whether option 1 would work because my contribution could be considered "gift money." Is option 2 common practice for splitting a conventional loan or is there a better method that I did not think of?

Thanks in advance for your replies.

[Carl C.]

I suspect you'll have trouble finding a conventional lender who will loan to full time students unless you are also working enough to cover their required debt to income requirements. If you do find that lender, I would put both of you on the loan. You each have more protection for yourselves but also increased risks if things don't work out between you. Good luck!