Author Topic: How to co-own a two-family home with parents  (Read 1357 times)

meatface

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How to co-own a two-family home with parents
« on: July 20, 2017, 09:09:20 AM »
My wife and I are considering going in with her parents on buying a two-family house. We would live in the bigger part, and they would live in the smaller part. The idea is that we would put in X% and her parents would cover the rest (Y%; >50%). We would all plan to live there for the next 20 years or so.

My question is: what is the best way to arrange such a deal?

 - Would it be better to have them buy the whole place in cash and then sell us our part of the house for an agree upon price?
 - Or is it better to form an LLC and split percent ownership of the LLC by the X% and Y% mentioned above and then have the LLC buy the house?

meatface

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Re: How to co-own a two-family home with parents
« Reply #1 on: July 20, 2017, 10:38:46 AM »
I found this online resource.

It looks like Tenancy In Common or Joint Tenancy are options for us. Has anyone here done either one of these?

Cassie

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Re: How to co-own a two-family home with parents
« Reply #2 on: July 20, 2017, 02:21:33 PM »
I would consult a real estate lawyer because what if one of the couples get divorced, one prson dies, 1 person goes into nursing home, etc. Things could change big time.  All 4 people need to be protected and an agreement how things will be handled if one couple can't or does not want to continue living there.

GizmoTX

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Re: How to co-own a two-family home with parents
« Reply #3 on: July 20, 2017, 02:33:12 PM »
Look into a Family Limited Partnership, where everyone owns a share or more of the property.

meatface

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Re: How to co-own a two-family home with parents
« Reply #4 on: July 21, 2017, 07:56:56 AM »
Look into a Family Limited Partnership, where everyone owns a share or more of the property.

Thanks for the tip. Do you, or anyone else here, have experience with such an arrangement?

limeandpepper

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Re: How to co-own a two-family home with parents
« Reply #5 on: July 21, 2017, 08:42:55 AM »
I think you need to consult a solicitor for this.

Personally, my partner and I bought a place, and we're owning it as tenants-in-common and we're going to make wills as well to give the other person the whole property if one of us dies. This way, we have the benefits of both tenants-in-common and joint tenants. Given the complexity of your situation with four people involved, it sounds like this kind of arrangement might suit you too, however I am obviously not offering legal advice. ;) Plus we're in Australia, not sure how the laws might differ over where you are.

J Boogie

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Re: How to co-own a two-family home with parents
« Reply #6 on: July 24, 2017, 09:14:26 AM »
I would suggest that you buy this place and rent to them, or vice versa.  Co-ownership with in-laws sounds fraught with peril.  Fences, lawn care, gardening, landscaping, driveways, garages - no way in hell I'd want to involve more people in these decisions, especially ones that might try to sway my wife's opinion.

If there are affordability issues for the buyer, maybe the renter could pay a year's worth of rent up front.

Just my 2 cents.  I own a duplex and my in laws live up top.  It works pretty well.

I imagine your situation might work out ok in a dense urban area with very little shared amenities/space.

Usury

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Re: How to co-own a two-family home with parents
« Reply #7 on: July 24, 2017, 10:37:08 AM »
I would consult a real estate lawyer because what if one of the couples get divorced, one prson dies, 1 person goes into nursing home, etc. Things could change big time.  All 4 people need to be protected and an agreement how things will be handled if one couple can't or does not want to continue living there.

THIS^^^^^   Nursing home being the big consideration IMO.   Talk to an attorney.  Perhaps you could structure the deed as a life estate for the parents interest.  Or record a purchase option giving either party the right of first refusal at a set price in the event of a sale.