UltimatePlayer3301 OP t1_j6oa364 wrote
Reply to comment by nozzery in Is it feasible to buy a house with 3 friends for my 4 years in college (or maybe longer)? by UltimatePlayer3301
The university I go to has a nice co-op program for the engineering major with an average of $19/hr salary while in college, I've found similar part-time jobs for over $20/hr that are definitely feasible in college, I used the very conservative numbers of $15/hr and 15 hours per week in my estimates, meaning even a job at McDonalds could make do. It seems as though there are many options and with savings, it should be very doable to pay the mortgage payments. If you have reasons for your comment, please give them or a scenario that maybe you or a friend went through that can explain it.
nozzery t1_j6objqh wrote
It's doable, *if everything goes perfectly*. Which it won't. One of you will become a deadbeat. One of you will get injured. One of you will have to drop out. You just never know what could possibly happen. It's not worth the risk for something you know you're going to sell in 4 years, and tie yourself to 3 other people you're fully expecting to walk away from in 4 years.
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Never get into a situation where you need everything to go right in order to make it work.
UltimatePlayer3301 OP t1_j6oez1g wrote
What if I found a situation where the numbers work that 2 people would be able to cover the cost, but we still use 4 people equally 25% each? In your opinion, would that work?
nozzery t1_j6ofeq6 wrote
Are you willing to bet your house on 2 of your friends having their finances 100% in order until you decide to sell? I wouldn't. Look at how much you're coming out ahead over a rental. Then decide if that amount is worth the risk you're taking. It's your call, but you'll also be left holding the bag if it doesn't go the way you planned.
tutorquestion90 t1_j6ofqf2 wrote
You’re taking a big risk that everyone will contribute.
Also a rule of thumb is that you’ll lose money if you don’t keep it for 5 year’s minimum.
There’s also closing costs and all that too.
What if you get a roof leak and you need to hire someone? Do you want to go through that? Water heater breaks, furnace goes out. Anything.
One of you will have to sign the paperwork. Everyone else could bail and that person is stuck holding the bucket.
It’s a huge risk. Just rent during this time
badchad65 t1_j6oiea7 wrote
I think the number of people still complicates things.
What happens if one of the 4 people pays in for three years the leaves? Do they get equity? How much? What about repairs? What if the roof needs replacing or the hot water tank or AC goes? Who pays when someone punches a hole in the wall? Should the two people that "pay in" get more equity? They are the ones taking the risk.
Given home prices are at an all time high, what happens if the property takes a loss after 4 years? What if someone doesn't want to sell at the end of 4 years?
As everyone else has said, this is not a great idea.
IronChefster t1_j6oc5mp wrote
It’s not just about the financial stability, but rather about the life stability.
What happens if one of your friends decides he doesn’t want to go to school, or has a reason to move away? Do they stay invested in the house and rent out their room? What if they don’t want to be invested anymore and get their cash out?
You’re also just thinking about the month-to-month finances. One of the big benefits of renting is that if something goes wrong, the landlord is on the hook to fix it. If you own it, you’re on the hook. What if the roof leaks and have to pay $2k to fix it? What if you have foundation issues and need to pay $10k? There are all sorts of things that can go wrong.
If you’re really serious about this, you should research the concept of “Tenants in Common” it may be more specific to California, but the idea is that there are very clear rules and precautions in place to ensure everyone who owns a property is legally bound to take care of it.
I know what you’re thinking “oh we’re all friends and we’ll figure it out”. What I can tell you is that when money is tight and a $10k comes your way, friendships can be broken.
Renting a place avoids most of that.
TyrconnellFL t1_j6obu6e wrote
With closing costs, taxes, and repairs you’re likely to lose money compared to renting.
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