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I am having talks with my oldest and dearest friend of 30 years about the possibility of buying a piece of property together. He lives in St Petersburg FL (I am also a native Floridian and spent the first 20 years of my life there) and the thought is to buy an older single family home with a separate garage apartment or detached mother in law apartment. My friend will occupy the main house and I will use the other dwelling. I am hoping to retire soon and want to use the property as my part time home while I travel and decide how to spend the rest of my life. My friend is retired and on a small pension with few other resources. The benefit to me would be having a trusted friend onsite to monitor the property while I travel (which I hope will be substantial travel for months at a time). My main concern is limiting my risk and not taking on any unexpected exposure that puts my assets at greater risk. I am living on the other side of the country now but will be in FL in a few weeks. I plan to meet with an attorney here beforehand to run the issue by him. What are the things I should be thinking about and discussing with the attorney when we meet? Thanks.
My main concern would be what happens if one of the parties decides they want to sell - will the other party have first right of refusal? Also what happens should one of the parties pass?
I'm sure they're are other concerns, but theses two come to mind immediately.
I have done it with a friend. We had a good written contract and it all worked out well.
My advice is for you to write up a bullet point version of your desired agreement and then find a lawyer, that you both feel comfortable with, to draw up a contract. Ask lots of questions during the process. The lawyer should ask you both lots of questions.
Then, and only then, should you proceed to buy.
Why not buy it and rent the main house to your friend? If your friend is a co-owner of the house it can be counted as an asset of his which may affect his eligibility for Medicaid if he qualifies now, or if he needs to apply in the future due to health changes. I would think that since you won't be a spouse, if Medicaid required him to spend down his assets, the house would need to be sold, or they could place claims on it after his death.
Really, why not just rent to him at a rate that you know he can afford? I don't see the point in having him on the deed.
Really, why not just rent to him at a rate that you know he can afford? I don't see the point in having him on the deed.
Not to mention, if your friend goes into a nursing home and runs up a bill of $100,000, they will place a $100,000 lien on your house even if the house is worth $75,000. They don't care about your co-ownership and may be forced to sell and make zero just because he got sick.
I agree, buy it and rent it to him. Dont intermingle assets with anyone your not married to. It complicates things legally.
THIS IS NOT A GOOD IDEA. I'm a realtor and there are a million reasons NOT TO DO THIS!!!!!
One of you need to buy and the other one rent. Please listen. This can and does turn into disaster stories.
Before one is retired, one can take-on more risk with the knowledge that even if things don't work-out, one can always recover. After retirement, this is often not the case!
Since you are only using this as your part-time home, it may not represent a major chunk of your retirement assets, in which case, you can perhaps afford to take the risk (of which there are many).
If, however, you cannot afford to lose it or have it otherwise encumbered by the actions or unforeseen situation of another person (nursing home, medical bills, etc), you would probably be wise to buy it and rent to him, or vice-versa. Co-ownership with a non-spouse is simply fraught with too many potential problems.
I agree with above not a great idea and a way to ruin a good friendship as in if something happens down the road, you are much better to rent from much safer!
in the words of Judge Judy , are you nuts ? NO way would I buy a house with a friend . You should only buy a house with someone you are married too and even then still be careful . Yep could lead to trouble further down the road and what if he were to suddenly pass away God forbid and then his family wanted his share of the house ? you would have to buy them out and what if you could not buy them out ? they would have to sue you . I have seen this very thing happen over and over .
Yep could lead to trouble further down the road and what if he were to suddenly pass away God forbid and then his family wanted his share of the house ?
Well it depends on how the house is deeded. You can have tenants in common with rights of survivorship. That is why the OP is asking what she should be asking the attorney.
OP...
1) You need to talk to an attorney about the deed. Will you be tenants in common with a 50/50, 60/40, or some other split? If one person passes who gets that portion? Does it go to each of your heirs? Does it go to the other person? Does the other party have the first right to buy it out from the estate before being deeded to an heir? You need to work that out.
2) You need to talk about costs of maintenance. If you have an apartment over the garage and the house needs a new roof how does that work?
3) What if one person gets into financial trouble because of health issues? How will that work.
4) What if one you does something to cause a lien to be placed on the property? How will that work.
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