Ever partnered on a househack with a roommate?

[Toby Coons]

Hey guys,

I am a recent college grad who has spent way too much of my hard earned cash on rent already and I am hoping to get into real estate investing with my first purchase. My question is: Does anyone have experience partnering with a friend/ roommate on a 4 or 5 bedroom and filling the rest of the rooms with other friends? 

Our background is that we have been living with a third roommate in an apartment for  year and are looking for a new place/ possibly want to buy. We both have solid jobs working in the financial industry and view this as an opportunity to diversify our investments while learning a lot along the way. The idea would be buy a house with needed rehab, live in the house for 2-4 years in our mid twenties, and then hold it long-term for rental income as we move on to smaller, more "grown-up" homes.

Below are my pros and cons but I am looking for any feedback on other things that I may not be thinking of:

Pros - 

1. Both ourselves and our friends can save a lot on rent and we have locked in tenants for the first 2-3 years along with two strong networks of potential tenants once we move out.

2. The two of us are gaining equity as we learn the industry together.

3. We can afford to purchase a place in a safer (location, location, location) part of town with both of our incomes. We are in atlanta and anywhere that a young professional can afford alone is extremely speculative and more than our risk appetites are hungry for. 

Cons - 

1. House prices seem sky-high right now 

2. We see some risk in the partnership/ roommate setup (advice from anyone who has experiences this would be greatly appreciated)

3. We are on a relatively short time-table (~2 months) to get into a new place but already have some houses in our sights.

Thank you for any wise words!

[Brent Coombs]

@Toby Coons, what you are describing is a Joint Venture Partnership, which should be formalized in legalese writing if you proceed. If you are BOTH on board with the specific deal you want to go for, you should have just as much chance of success as any other Joint Venture. 

Well done summarizing the pros and cons. Good luck giving them fair weighting. All the best...