Forum
« coop cornice and roof replacement This site blows »
February 12, 2007
First Condo Purchase
My roommate and I rent a two bedroom in Prospect Heights, just off GAP and the building is going condo. The insider price, just shy of $300k, is low enough that both he and I(both architects, incidentally) think it's too good to pass up. My roommate wants to buy the apartment as a partnership which I would agree to only if the goal was a quick resale(who wants to own half an apartment?). Does this sound reasonable? Is any bank going to lend someone/a partnership with basically no assets more than $300,000 to buy and renovate an apartment? Would it be better for one of us to buy it? My roommate would be getting his half of our ten percent down payment from his dad while I would be using my savings. Our monthly costs would be about the same if slightly less after the tax savings(god bless the mortgage interest deduction). Even under the worst of circumstances we could successfully "carry" the apartment until one of had to move for other reasons.
Comments
I sense a disaster in the making
But that's just me
Posted by: Anonymous at February 12, 2007 7:45 PM
I don't think the interest would be deductible if it were bought by a partnership. I think that's only for individuals. If you're going to do it, the way to do it, it seems to me, would be for the two of you to buy this jointly, as a "couple" so to speak, and you should have a side contract setting forth exactly what your arrangement is, who pays for what, and under what circumstances you intend to sell.
Posted by: Anonymous at February 12, 2007 7:52 PM
In no particular order:
A. with good credit you'll have no problem gettin a loan. Can do stated income or no doc loan.
b. Make sure you are put on the Title. You don't have to be on the mortgage.
c. Why "quick resale"? You still need a place to live. Keep living there knowing that you will be gaining equity etc.
d. Have a "buyout" clause-- i.e. if one of you wants to leave, the other has to buy you out OR put in on the market. Buyout can be based on independent appraisal assuming value goes up.
e. Talk to a lawyer!! but why pass up this opportunity?
Posted by: phoffy at February 12, 2007 9:46 PM
I'm with phoffy, I think you should do it. I know people who bought country property together. They had a lawyer draw up an agreement about sharing costs etc. and providing for eventual disposal of the property. They agreed to keep the house and use it for 5 years, which they did, and then sold it and went their separate ways. They are still friends. It was not a disaster. I'm sure you could put together an agreement that works for you and your roommate.
Unless you're hugely wealthy buying real estate always seems like a stretch, but it's doable and worth the effort and risk (not such a big risk, in your case, as you already live in and presumably like the place). The equity you build in this place could allow you to trade up to your own apartment in the future. If I were you I would not let it slip through my fingers.
-- Kingston (having trouble with typekey)
Posted by: Anonymous at February 13, 2007 11:49 AM
A two bed for $300K???!!! Buy it! You will do very well when you decide to sell.
Posted by: Anonymous at February 13, 2007 1:25 PM
I would take that 30k and use it as 5% downpayment of 600k home in an upcoming area. Maybe you can have a floor each and share a common floor.
That's just my 2 cents.
Posted by: Anonymous at February 13, 2007 1:28 PM
Post a comment
Please be patient while your comment is published. It may take a moment.