Exploring Co-Ownership of Property: Seeking Advice and Insights

[Richard Mai]

Hello Biggerpockets Community,

 I'm currently considering a unique opportunity to go 50/50 on a property with a friend, and I'd love to hear your thoughts and experiences on this matter.

Background: My friend and I are contemplating joint ownership of a property where they will live and cover the mortgage, while her and I contribute 10% down payment. It's an exciting but complex decision, and I'm reaching out to this community to gain insights, advice, and maybe learn from personal experiences.

Pros and Cons: I've identified several potential pros and cons but would love to hear your perspectives. I understand that there won't be any cashflow but the loan paydown and appreciation over time hopefully offsets not having cashflow.

Legal and Financial Advice: Do you have any recommendations for legal or financial considerations we should take into account when formalizing this co-ownership agreement? Any red flags or important clauses to include in our contract?

Decision-Making and Communication: How have others navigated decision-making in co-owned properties? Any tips for fostering open communication and avoiding conflicts over time?

Exit Strategies: One concern on my mind is planning for the future – what are some effective exit strategies you've seen or experienced in co-owned properties? My main focus is to add to my portfolio in time and hers does not involve in real estate investing. 

I truly appreciate any insights, advice, or personal stories you can share. Your experiences can undoubtedly help us make more informed decisions as we embark on this venture.

Looking forward to your valuable input!

[Chris Seveney]

Quote from @Richard Mai:

Hello Biggerpockets Community,

 I'm currently considering a unique opportunity to go 50/50 on a property with a friend, and I'd love to hear your thoughts and experiences on this matter.

Background: My friend and I are contemplating joint ownership of a property where they will live and cover the mortgage, while her and I contribute 10% down payment. It's an exciting but complex decision, and I'm reaching out to this community to gain insights, advice, and maybe learn from personal experiences.

Pros and Cons: I've identified several potential pros and cons but would love to hear your perspectives. I understand that there won't be any cashflow but the loan paydown and appreciation over time hopefully offsets not having cashflow.

Legal and Financial Advice: Do you have any recommendations for legal or financial considerations we should take into account when formalizing this co-ownership agreement? Any red flags or important clauses to include in our contract?

Decision-Making and Communication: How have others navigated decision-making in co-owned properties? Any tips for fostering open communication and avoiding conflicts over time?

Exit Strategies: One concern on my mind is planning for the future – what are some effective exit strategies you've seen or experienced in co-owned properties? My main focus is to add to my portfolio in time and hers does not involve in real estate investing. 

I truly appreciate any insights, advice, or personal stories you can share. Your experiences can undoubtedly help us make more informed decisions as we embark on this venture.

Looking forward to your valuable input!

 These transactions are overly complex and typically never end well because the exit is not thought out and if someone wants out etc. what do you do.

If I were to do one of these I would buy it in a LLC so its easier for one party to exit, especially since financing is involved.