Richad, Home Buyer in San Francisco, CA

my sisters,brothers and i want to buy a share house. Is it possible? we are 2 brothers and 4 sisters.

Asked by Richad, San Francisco, CA Tue Jun 28, 2011

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20
Sounds like a custom made estate issue, I financed a home for a buyer a few years back, the seller thought she owned the house outright, over 20 people showed up at closing claiming a cut of the proceeds. Just be sure to have “what if” plans. What is the exit strategy?

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Fri Jul 5, 2013
You should first meet with a local and trusted loan officer who can qualilfy you and let you know what may be available to you all as a group/. you will want to speak with a lawyer to see what type of arrangement is best for so many people to take ownership.
0 votes Thank Flag Link Fri Jul 5, 2013
Hi Richard,
yes you can...you need to decide on the type of arrangement you all want (who will be on the loan and who will be on the title to the property)...you may want to start here and talk to an attorney if you feel it is necessary
http://www.nolo.com/products/real-estate
afterward, talk to a lender and a real estate broker

good luck!
$$$ BUYER CASH REBATE 50%-60% / SELLER DISCOUNT 50% $$$

Web: http://americarealtyonline.com/
(415) 305-2958
Flavio Tejada, MBA-Finance, Realtor, Broker/Owner
0 votes Thank Flag Link Fri Jul 5, 2013
Yes definitely possible. Make sure you have an experienced loan officer because you all have to be on a separate application and those who are married will need their spouses debts calculated into the DTI as well. Call me if you need to get this done still. 614-458-1903
0 votes Thank Flag Link Mon Jul 1, 2013
Richard

We do these types of transactions all the time. FHA financing is perfect for your scenario. You may all may be on the loan and title of the property even if some of you may not occupy the property. Contact me for further detials!
0 votes Thank Flag Link Fri Jul 1, 2011
Have you explored the prospect of a family trust? Perhaps one, or however many of you it takes, could qualify for the loan. Once consummated transfer the asset into a family trust making all siblings beneficiaries. Just a thought.
0 votes Thank Flag Link Thu Jun 30, 2011
Richard Absolutely. the first thing you should do is tlak with a mortgage lender and have them help you figure out if everyone can be on the mortgage or if you would be better off with perhaps only a 2 or 3 of you on the mortgage and everone listed on the Deed. You would also be well advised to meet with an attorney and discuss how you would want to take title so that everone was comfortable and protected. You may want to consider setting up a revocable family trust and taking title in this manner, but you'll want to talk things over with an attorney to decide what's best for your specific situation.

Good Luck!
0 votes Thank Flag Link Thu Jun 30, 2011
Hello,

It is possible to get a loan, but there are many logistical factors. Does it make sense as a primary residence for all individuals to live there? If you are all going on the loan, all your income, debt, credit history will be examined. Bigger question is, do you need to put all those individuals on the loan? You could try qualifying for the loan with only a few siblings to make the loan scenario make more sense, from an underwriting perspective.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
Fax: (310) 451-6407
mabram@firstcapitalmtg.com
0 votes Thank Flag Link Thu Jun 30, 2011
Yes, it is possible. Some issues that need to be clarified:

- Is this for use by your family or an investment?
- Do you require a loan in order to purchase?
- Will this be an equal partnership?
- Have you prepared an agreement with your siblings regarding each partner's shares and rights?
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Tue Jun 28, 2011
I tend to shy away from corporations be they S or C. Lot's of complications and bureaucratic red tape, minutes, maintenance, minutia, etc. I'd be more inclined to favor an LLC or a General Partnership. Something where you could consolidate the numbers of investors. You can distribute stock or percentages just as easily and without all the added expense and management.
0 votes Thank Flag Link Tue Jun 28, 2011
Form a small S Corp for this venture, give everyone the amount of shares each are supposed to get, have officers to delegate and run the property and all will be fine, If one wants out they only have to sell their shares.
0 votes Thank Flag Link Tue Jun 28, 2011
What a big family you have! From a legal point of view, it's best to have all your expectations laid out in full before you proceed, i.e., who wants to be flexible, who wants to earn income, who pays more or less, what is the 5-, 10-year plan, etc.

Once you have those expectations sorted out (and your budget in mind) then you can structure a purchase accordingly. And, of course, your ownership structure may depends on what type of home you're planning to buy (a single family dwelling, condominiums, multi-unit buildings, for example). In the meantime, take a look at some commentary from local attorney Andy Sirkin. He's a leading legal practitioner in this area.

Hope that helps!

Kevin K. Ho, Esq.
Broker Agent | Vanguard Properties | Attorney at Law

DRE 01875957

Office 415.321.2700
Cell 415.297.7462
Google Voice 415.889.9918
0 votes Thank Flag Link Tue Jun 28, 2011
Hi Richard,

The short answer to this question is, absolutely. As has been mentioned several times it is really about how you want to structure it that will be the tricky part, but of course you can all buy a house together.

If you would like to discuss it in detail, my contact information is below:

Dan Dodd
Coldwell Banker
Dan.Dodd@cbnorcal.com
415-577-9462

Cheers and the best of luck!
0 votes Thank Flag Link Tue Jun 28, 2011
This could easily turn into a nightmare. Peoples goals and circumstances change over time. I would recommend that the goals of your group of siblings be definite and plans for all contingencies be agreed in advice. I would recommend that the properties be purchased by a corporation with your brothers and sisters owning stock. Stock can be a lot easier to transfer than a one sixth undivided interest in real estate. In the event one of you passes dividing their interest among their children would be much easier. When it comes time to transfer the property the officers of the corporation can effect the sale. Getting six siblings to agree and sign documents and one place can get complicated.
Web Reference: http://www.gary-barker.com
0 votes Thank Flag Link Tue Jun 28, 2011
You may want to consider some form of general partnership or LLC as a possibility. However, your combined and individual credit, down payment, employment, debt to income ratio and the comps would certainly play into it greatly. Also you may have to show some history i.e. two years, to qualify. But if everything else looks good, depending on the lender, you just may get lucky. Hope this helps.
0 votes Thank Flag Link Tue Jun 28, 2011
Hi Richad, after you all meet with the mortgage professional, you should also talk with an attorney to work out things like if one brother or sister wants to sell, or buy out another sibling.

Buying together is a nice thing, but it could turn out to be a huge problem later if one has a financial problem or decides to get married and wants out.

Best of luck.

Tap
0 votes Thank Flag Link Tue Jun 28, 2011
More than 4 people on the loan is fine, some lenders are not set up to handle more than 4 (logistical issues, such as software, etc.) but it is certainly possible.

All income and debts will be combined/mixed together to determine the total debt to income ratio, each person's credit will also have to meet minimum requirements (score & credit history), however the down payment funds can be brought in by any single person (or multiple people) on the loan (i.e. not everyone has to contribute to the down payment requirement). If it's being purchased as a primary residence or second home then the down payment funds can even be a gift, but if it's a rental property gift funds aren't permitted.
0 votes Thank Flag Link Tue Jun 28, 2011
Hi Richad

I can't imagine why you couldn't. But Jim makes a point. If there is an issue, it's likely with lending. Please contact Natasha Lovas at NLovas@gmwest.com She should be able to answer that question.

The only other issue could be the size of the house and the number of bedrooms. There are occupancy rules about how many people can live in one place, so six of you couldn't buy a one bedroom to live in. Although, if you are buying as an investment (not to live in), you could buy a one bedroom.

Let me know if you have any other questions.

Best
Eric Castongia
Zephyr Real Estate
Web Reference: http://www.SFHotBuy.com
0 votes Thank Flag Link Tue Jun 28, 2011
Richad,

I've never dealt with this many people buying a house, but we have dealt with a group buying a multi-unit building. As Jim pointed out, you can add people to the deed fairly easily either during the escrow process or after (sometimes this requires lender permission), but it will depend on lender guidelines and your individual credit/debt/income scenarios.

I would recommend talking with a few lenders and figure out the finances before you start looking. If you would like some referrals we have some great lenders we deal with. Contact info is below:

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Tue Jun 28, 2011
That will vary state by state. I've had two unrelated/unmarried people buy a house together, but not 6. If all of your names will be on the mortgage, I'm guessing you will all have to qualify. Around here, at least, you can be on the deed but not the mortgage.
0 votes Thank Flag Link Tue Jun 28, 2011
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