Has anyone bought a duplex with a friend? I am moving back to my former city and she is getting divorced with a kid. It seems like a great way to support each other while having our own space. I am wondering what I should be thinking through before we go too far down this path.
Buying a duplex with a friend?
byu/Heavy_Calligrapher71 inRealEstate
Posted by Heavy_Calligrapher71
28 Comments
That actually sounds like a decent idea but you’re probably going to have to spend extra time with the lawyer to avoid having to sell it when one party wants out.
Judge Judy doesn’t approve.
You want to move in with a mom and child?
It’s not crazy, but be careful. Make sure you really really trust and like the other person and also still have a contract in place that covers the eventualities: what if someone wants to sell, dies, doesn’t pay, if you can’t agree on maintenance or upgrades or insurance, etc. etc. Try googling “tenancy in common”
Would you each own a side? And can you sell one side by itself?
I wouldn’t do it if you can’t sell one side by itself.
Consider getting a gate between the backyards.
Establish clear boundaries. Eg no walking in the other person’s side without knocking. Set aside a time each month to review any issues. After a year you can probably do it quarterly.
You can share a lawn mower and a snowblower.
It will get complicated. Why?
1) timing of selling
2) if one party doesnt pay mortgage, the other party has to bear total financial obligation
3) see #2, and think of how maintenance, insurance, etc will be paid; if one doesnt pay, what happens
I’m sure there are other potential issues with joint ownership
This is a bad idea unless you’ve met with an attorney BEFORE you do this to hammer out what happens in case of a “break-up.” What if you get a new job and need to leave the area? Or she meets someone new and they want to get their own home? Or living so close tanks the friendship?
You’re buying into all the complications of her 2nd marriage with little benefit. There are a million things that can happen to make this arrangement go South fast.
I’d say one of you buy the place in the other rent the unit out to the other person. That way, if you guys aren’t happy, it’s not as dangerous and challenging as if you were co-owner.
One of you could buy, while the other rents from the owner. Otherwise, it’s too complicated. Let’s say someone passes and leaves the property to their children, now you have a colossal legal mess on your hands. If one person needs to claim bankruptcy, then the other is dragged into it too. One person gets a judgement against them and a lien is placed on the house, the other will have to pay.
There are no upsides to being financially and legally tied to someone that is your friend. Even lifelong friendships end for the smallest reason.
One of you buys the duplex and rents out the other unit to the other to help with the mortgage.
Not a duplex but we bought a house with friends in 2017 in California. There were a few extra documents we had to organize for the loan and insurance and the VA (were all military families) but our broker walked us through it
i didnt buy a duplex, i bought a house with a friend. Dont do it. getting out of it is almost as complicated as divorce and it went very south for me and I am still not out of it.
Hard to untangle later. Might as well get married.
Adult bunkbeds!!
I just did this 🙂 We have a 5 year hold period after which we can sell our interest. We have a joint bank account for the property and all expenses 50/50, and each deposit rent into the account.
Does your friend have experience in real estate, property management, or the construction trades? Will she have enough savings left over after the purchase to pay her 50% share of the repairs? How much responsibility are you prepared to take for the upkeep of the common areas (i.e., who will put the garbage bins on the curb and bring them in, + who’ll sweep the sidewalk, driveway and front walkway)? There are lots of things that you won’t want to pay someone else to do, but if they all fall on your shoulders, you may end up resentful. These are all issues that you both should address before buying a property together.
Legal agreements. What happens if one defaults, wants out, etc. Maintenance costs, taxes, insurance…
Convert to condo.
House hack. One of you buy it, the other rents the other side. Renter gets a small discount. Win-win.
Bad idea
It’s a decent idea, but it would be better if one of you purchased it and reacted the other side to the other person. That’s a better exit strategy than buying anything with another adult you’re not married to..
I did this years ago with a couple and another person, and don’t regret it. Just make a plan for an exit strategy, and how the property and money will be divided. In our case, we had a spreadsheet where every month we updated who paid what and how much of a percentage of ownership everyone had. So when I wanted out, we had it appraised, they cut me a check for my equity, and I left. They refinanced without me and still live there. It was a great way for four people to buy in a VHCOL area.
Omg, never buy with a friend. It doesn’t end well 🙁
Would buying neighboring condos or townhomes be an option? It would be much less complicated.
Why not just buy a REIT?
I think it’s a solid idea. You just have to be thoughtful about building an agreement to deal with likely potential issues. Issues like how costs are split, who owns what, how to handle repairs or tenant issues or someone wanting to refinance/ sell.
Yep, it can be a great setup until one of you wants to cash out and move on. Definitely get a lawyer involved to spell out the terms up front.
When my mom passed, my brother, sister, and I inherited her beach house. It became a special place for holidays and family trips. We all lived in Portland, so it was about a three-hour drive. Not super convenient, but perfect for long weekends, spring break, summer getaways.
My sister and I are close in age, but our brother is 13 years older, so we’ve all been in different stages of life. Ironically, despite being a few years older, I’m the one with the youngest family now, having just one daughter who’s 8. My sister’s kids are 18 and 20 off at college, and my brother’s son is 30. My mom’s been gone 12 years, and over that time my sister’s family used the house the most, especially when her kids were younger. I only made it out a couple times a year, but now that my daughter’s older, it would be the perfect place for us.
The issue is that we’re equal owners. A couple years ago my brother decided he was done with it and wanted to sell his share. After an appraisal, my sister and I would have needed to come up with about $250K to buy him out, which would’ve meant taking on a pretty significant monthly payment. She wasn’t interested, especially since her kids are grown and she doesn’t use the house much anymore. Now she’s leaning toward selling too.
There’s no way I can afford to buy both of them out, so we’re basically forced to sell. I get that I’ll receive a payout, but it’s frustrating. It feels like they already got years of memories and free beach weekends with their families, and now that I’m finally in a position to enjoy it the same way, they’re ready to walk away and want their money.
It’s definitely created some tension between us. I’ve accepted that I’m outnumbered, and I don’t want it to permanently damage our relationship, but I’d be lying if I said I wasn’t a little bitter.
These are the kinds of situations you’ll want to think through ahead of time.