Home Buying in 55401>Question Details

Craftychick, Home Buyer in 55401

Buying as a Partnership

Asked by Craftychick, 55401 Thu Jul 2, 2009

I am in the process of starting a business with a partner who is self-employed with fair credit. I am unemployed with great credit. The business would be run out of the bottom of a duplex, the top would be owner occupied. Given our current money and credit situation, we obviously cannot get a loan or mortgage without a third partner. If we were to find someone, would we be able to apply for a residential mortgage together? As a partnership or corporation? Would we instead have to apply for a commercial loan even if the property is residential? What kind of down payment and interest rates should we expect? Any info is appreciated! Thank you.

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Crafty_

Independent of being a real estate broker, I think I may be more useful to you from the perspective of being a small business owner in Minneapolis. I also spoke with the person I referred to in my prior response. He is willing to sell and offered to provide insight if you wish to call him. You may contact me @ #612-822-1771.

Be prepared to explain why you must 'own' a duplex. Is it necessary to own the duplex in order to conduct your business? Why not rent a duplex?

If it's imperative that you must own:
Interviewing reliable small business accountants and small business lending experts, whether local bank or broker, is essential. Maybe you've already exhausted those routes? If so, you will be limited to private financing or some creative means.

Whatever you do in the realm of property and/or start-up small business business ownership, expect to offer personal guarantees based on credit history, financial statements, collateral/ assets... That's what most of us business owners subject ourselves to in order to borrow or lease, especially when starting from scratch (high risk).

~Brian
0 votes Thank Flag Link Fri Jul 3, 2009
Brian - Thanks for the response. More information from your friend would be appreciated. We have a lot of questions he could probably answer, such as zoning issues, splitting profits, etc. Is your friend currently looking to sell his duplex?
0 votes Thank Flag Link Thu Jul 2, 2009
You could get a co-signer or you could set up an entity to be owner. However, there are specific restrictions to each of these options. You need to call me and with more information, I could probably help you sort out what real credit issues and business planning issues exist. I am a realtor and a mortgage specialist. Feel free to call me at 612-986-4105.
0 votes Thank Flag Link Thu Jul 2, 2009
Hi Craftychick_

I have a past client who owns and uses a Minneapolis duplex in the same fashion you've described.

He lives in and occupies the upper level as a residence, the business he owns has operated as occupant of the lower level. Also consider this is an established business with 5 or 6 employees. In the past he co-owned the building with a business partner, although I am aware that he recently bought out her stake in both the duplex and business (and possibly refinanced).

Nevertheless, I trust he has explored every angle you're considering with respect to how to go about financing, tax implications... Please let me know if you'd like me to learn more or make the connection. Maybe you can buy his duplex?

~Brian
0 votes Thank Flag Link Thu Jul 2, 2009
I am looking forward to the answers on this one... I do have a couple of recommendations, don't count yourself out until you have spoken with a qualified Mortgage Broker/Lender and if you haven't done so yet, schedule a time to meet with one of them. Second, a contract for deed may be another option for the two of you so that you don't have to bring a third party in... Stay tuned for more expertise from fellow real estate professionals..
Web Reference: http://JackieFunk.com
0 votes Thank Flag Link Thu Jul 2, 2009
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