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05-11-2009, 07:40 PM
| | Junior Member | | Join Date: May 2009
Posts: 4
| |  Buying a vacation home w/other investors
What is the name of your state (only U.S. law)? IL (where I resdie). MI (where the property resides).
I'm looking to get a vacation property with 2 other investors. 1 has horrible credit and one has OK credit. With my name on the loan we get a great rate. When I add the investor with OK credit, our rate goes up 2pts. What options do we have to get the place and protect everyone? I don't want to have my name on the loan and everyone's name on the house, but I can see that they would not be eager to pay and not have their name on the property. What are my options here? |
05-11-2009, 07:43 PM
| | Senior Member | | Join Date: May 2000 Location: Catatonic State
Posts: 75,781
| | Quote:
Originally Posted by thetinman  What is the name of your state (only U.S. law)? IL (where I resdie). MI (where the property resides).
I'm looking to get a vacation property with 2 other investors. 1 has horrible credit and one has OK credit. With my name on the loan we get a great rate. When I add the investor with OK credit, our rate goes up 2pts. What options do we have to get the place and protect everyone? I don't want to have my name on the loan and everyone's name on the house, but I can see that they would not be eager to pay and not have their name on the property. What are my options here? | **A: I suggest you partner with investors who have better credit. |
05-11-2009, 07:44 PM
| | Senior Member | | Join Date: Dec 2007 Location: Thebes
Posts: 6,068
| | Quote:
Originally Posted by HomeGuru **A: I suggest you partner with investors who have better credit. | ditto...If you don't, I can see the train wreck coming 
__________________ Dang the Persephone for eating those pomegranate seeds. It is because of her urge to snack that we must suffer through the winter that will soon be upon us.  |
05-11-2009, 07:46 PM
| | Junior Member | | Join Date: May 2009
Posts: 4
| | | I know I know I know
The only 'thing' is it's family (which may even make it more of a reason to be careful).
Can we put the place in a trust or something? |
05-11-2009, 07:51 PM
| | Senior Member | | Join Date: May 2000 Location: Catatonic State
Posts: 75,781
| | Quote:
Originally Posted by thetinman The only 'thing' is it's family (which may even make it more of a reason to be careful).
Can we put the place in a trust or something? | **A: a trust will not help in this situation. You will still be getting the raw end of the deal. |
05-11-2009, 08:13 PM
| | Junior Member | | Join Date: May 2009
Posts: 4
| | | stuck?
So pretty much - it's either get the nasty interest rate or get stuck holding the bag? |
05-11-2009, 08:27 PM
| | Member | | Join Date: Mar 2008
Posts: 142
| | | What type of investment is this going to be? Is the house going to be rented out through the year or is it going to be used just by the family?
If you plan on the house being rented out and if you plan on buying more houses in the future, you may want to consider a LLC. There are advantages and disadvantages of doing it that way. |
05-11-2009, 08:35 PM
| | Junior Member | | Join Date: May 2009
Posts: 4
| | | Fun
I'm planning on having the property as a fun place for the family. Between all 3 of us, we have over 12 people. The thought did occur to rent it out for weekend getaways, but the main purpose of the place would be for our enjoyment. Do you have any advice on what I should do? |
05-11-2009, 08:51 PM
| | Member | | Join Date: Mar 2008
Posts: 142
| | | If you are in a good enough financial position and you are confident that it is a good investment, you could buy it yourself and allow the rest of the family to use it. Buying with family could work out fine if everyone gets along and will get along in the future, but can be a hassle if everyone doesn't get along. If your potential partners have less than great credit, there are reasons for that and those reasons may show up if you enter into a buying the property together. |
05-11-2009, 11:16 PM
| | Senior Member | | Join Date: Feb 2006 Location: Philadelphia, PA
Posts: 17,775
| | | Don't do this without getting personal, paid for legal advice.
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05-12-2009, 12:44 PM
| | Senior Member | | Join Date: May 2000 Location: Catatonic State
Posts: 75,781
| | | I like the paid for part. | |
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