Pros vs. Cons - Buying a house with someone

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1

I’m heavily interested in purchasing a house. I’m pre-approved well within my limits as is a very close personal friend of mine.

Our Ficos are 750’s and we have well established lines of credit and a perfect enough of open accounts. Our debt to income is minimal, etc. etc.

Together each pitching in 50% we’d be able to come up with a DP anywhere between $20K-$40k. Depending on the house, and what it needs.

Now reasons aside other than “you might hate living with each other”, is there any reason to as why we wouldn’t want to purchase a house together? From a financial standpoint.

Everything would be 50/50 and its quite possible we would rent the other 2 bedrooms out to our close friends.

Our thought process would be, that in 5 or 10 years when we’ve moved on and are ready to have homes of our own…we either sell or one of us just takes the house over and pays the other one a large amount of money. (Figure, assessment value vs what we own on the loan divided by two).

Would I be better off just purchasing the house on my own with less of a down payment? Perhaps take $10k from him and allow him to live there for free for 2 years?

Example of houses -

More downpayment - http://r-house.com/app.aspx?st=7203&e=detail&propertyid=1495940

Less downpayment and renovate - http://r-house.com/app.aspx?st=7010&e=detail&propertyid=1542673

2

bad idea IMO

3

Generally a bad idea, friends and money never really go well in most cases.

4

horrible idea, buy the house alone and rent a room.

5

forget the thought process of us hating each other, or wanting to move out in a year. I’m talking, STRICTLY financial.

Worse comes to worse, I could just cut him $10K and get his ass out if I wanted him to.

6

I say buy the 240k house for your first house :tup: brand new job :tup: car market looks really stable :tup:

7

what if he wants the same though?

it can work, and probably will… but you never know. Things can get very ugly in a situation like that

8

but if i lose it, the government will help me out!

9

good, i’m waiting for fry’s response.

10

It makes everything more complicated, especially if you’re doing renovations, and doesn’t really lower the risk.

11

never never never do this.

12

I tried buying/building a car with a friend. Ended badly.

And speaking strictly financially? What if he stops paying the mortgage? And don’t say, oh he has a steady job that won’t happen. Things happen sometimes, that you cannot control. Something like that could ruin you.

Remember Grandma’s Boy? Rented an apartment together, dude gets addicted to hookers, BAM evicted.

13

yup.

I would never trust anyone (wife excluded) with anything like that unless it was a rental property and even then, I’d really have to sleep on it

14

Now, what about taking 10k upfront and letting him live there for 2 years?

15

fuck that, i’m moving to concord :tup:

http://r-house.com/app.aspx?st=1&e=detail&propertyid=832340

16

Right. You only want purely financial advice. You’re the financial manager, just divide all the numbers by two.

17

I have paid for a lease upfront before, but it is risky. You know him and he is your friend, so risk is low him, but that isn’t your concern. But I will tell you now, and warn you. Living with a person is a whole different ball game than being friends. People are messy and dis-respectful. l know all of this, because I have rented to friends in the past. Ended up ruining a friendship after we had to kick the one guy out. One of my buddies bought a dog, trashed the place, smoked inside constantly, punch holes in doors and walls, demolished a front door from being locked out, etc…

If he pays upfront, and you have to kick him out for some reason, there will be legal issues with the $10k that you used for a down payment and now owe to your buddy. If he pays monthly and shit goes down, you can toss his shit on the curb and change the locks on him no problem. So it is not a HORRIBLE idea, but it is risky.

18

hell if you’re making that much coin, why not rent cheaply for 2-3 years… save everything you can and then either buy a house in cash or buy something more expensive with a huge down payment?

19

I <3 you.

20

It is a great time to buy a house, but buying with someone just so you can have a nicer house than you can afford on your own (when you can afford a decent place on your own) seems like a bad idea from several angles: Complicates everything, adds financial risk, adds risk to your friendship, adds risk to your happiness while living there, etc.