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

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TOP 29 Comments
  • Dropbox
    BoxingUp

    Go to company page Dropbox

    BoxingUp
    Look for an investor who will set up a wrap around mortgage for you.
    May 4, 2021 1
  • Bank won’t give you loan if it’s not your hard earned money.
    Not an option
    May 4, 2021 2
    • I meet bank requirements (down payment would be for me around 44% net worth) but still feels a bit tight. So I could get it, it just would be less stressing if doing it with more margin
      May 4, 2021
    • Any money going in home purchase has to come from your account. If there are gifts then bank asks for gift certificate.
      Means, person giving money has to waive off rights to ask money refund.
      May 4, 2021
  • NVIDIA
    dhdjdndnx

    Go to company page NVIDIA

    dhdjdndnx
    You want someone to give you an interest free loan? What’s in it for them?
    May 4, 2021 5
    • Not only interest free loan, but no rental income either?
      May 4, 2021
    • My family has been doing this for years. These are called secondary mortgages and there are loan companies that allow you to invest by loaning out your money. You get paid every month when the borrower pays that mortgage bill. Generally these mortgages are around 10% interest rate for the borrower, and you net somewhere between 5-7% after fees and taxes.

      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.
      May 4, 2021
  • Amazon
    JSnowflake

    Go to company page Amazon

    JSnowflake
    There are equity coinvestment companies that will go in with you on down payment in exchange for 30% of upside. I forgot name of company but talked to them a few years back.
    May 4, 2021 3
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