Buying a Multi-Generational Investment Property
Buying a multi-generational investment property is one of the more fun ways that you can invest in real estate and it’s becoming more and more common. Perhaps your parents are getting older, or perhaps your sister is moving back to Massachusetts after being away for a few years.
On your own, you wouldn’t be able to afford a $1.5M property, but if you pool your resources, a 3-family could finally be in reach.
This type of property purchase is becoming more and more common and I think it’s a great way to get into a market that’s unfortunately out of reach for many.
With these types of properties, it’s extremely important that all buyers are on the same page in terms of individual requirements and financial ownership.
It’s critical to do two things early on:
First, meet with a loan officer. Understand who should be on the loan and how each individual’s loan application will impact your rates, down payment requirements, and debt to income ratio. A great loan officer will help you navigate through this step to ensure you are getting the most competitive rate.
Second, truly play out various scenarios and come to an agreement ahead of time. What happens if one person wants to leave after purchasing? What happens if someone passes away? What is your feeling about living above or below a relative? Have the difficult conversations now so you avoid the uncomfortable conversations later.
When executed correctly, you can have a great home that otherwise may be out of reach. However, if you don’t think through a lot of the “what if’s” you can create a lot of family drama down the line.
If you are thinking of exploring multi-generational living in a multi-family property but don’t know where to begin, let’s hop on an initial consult and get the ball rolling!