07-08-2019, 11:32 AM
(07-08-2019, 11:14 AM)GTBrandon Wrote: $400k house was an example and on the highest end of the budget. Planned on doing around $300k house, with me putting 30 and the friend putting the other 30. The whole purpose of the friend was to have a higher percentage DP, as well as split the cost of repairs if they came up.
What are you going to find for $300k in NoVa that you can both live in, or live in and rent out? Whats going to happen when one of you wants to move out? Or doesnt want to be a homeowner anymore? Or is broke and cant pay for half of the roof replacement? Any bank is going to have a field day with that one, too, I'd be surprised if you got past the pre-approval. House buying is a serious pain in the ass.
(07-08-2019, 11:14 AM)GTBrandon Wrote: Didn't think of the liability of the tenants damaging the property. Assumed this could all be pretty airtight in a contract but I also know I don't want to spend my time in court or in a lawyers office paying each hour.
There's also the liability of something going wrong in the house, someone in the house gets hurt, and them suing you. This is why you have an umbrella policy.
(07-08-2019, 11:14 AM)GTBrandon Wrote: Goes back to running the numbers, maybe one of you already has or are you all speculating on the rental returns after tax deductions, repairs, interest, fees, etc.?
This is why the 1% rule exists, to account for those costs, and IMO, having $20-30k liquid and/or a healthy line of credit that you can pay down quickly for 'shit happens and need it fixed tomorrow'.