Anyone interested in buying a fraction of a house?
May 4, 2021
29 Comments
Looking into buying a house in the Bay Area. Currently saving around 90k every year, but still numbers don't quite add up for down payment.
Is there any way to find investors for the down payment? They would get the equivalent of the amount they put down when reselling the house, or paid back after X years if the house is not sold by then.
I just think this makes more sense than wasting money in rent while I wait and would be a win-win.
Is that possible in any way? For the investor this is the equivalent of buying stock fractions the way I see it
comments
Not an option
Means, person giving money has to waive off rights to ask money refund.
The biggest risk is putting too much into a property and ending up upside down. Then you own a foreclosure that isn't worth what you loaned out on it. This isn't much of an issue now but will be if the market turns. Be very very careful in appraising the property yourself. Don't rely on their appraisals because the entire appraisal industry is a scam. The lenders get appraisers who will appraise properties higher than actual to entice investors.
Also, if you are not the 1st mortgage, Amy mortgage ahead of you takes precedence, meaning they get paid off first, so the risk of you being left holding the bag with no say in the foreclosure is high.
So be careful. We pool our family money together and only do 1st mortgages with complete controlling interest. Often you put money into these group loans and have no say in what happens.
Keep in mind that the people taking out these mortgages are often fools or risk takers that don't have the credit to get a regular mortgage. Make sure the property will be worth owning if you have to foreclose on it. We had to hold on to some properties through the last housing bust and even now still have a few on the books as rental properties.
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