Friend wants to sell me fractional ownership in his house. How would we do this?
June 27, 2009 by Timeshare Vacation and Fractional Ownership Tips
Filed under Fractional Ownership & Vacation Clubs
Can you answer Cheryl S’s question about Timeshares?:
This house is currently paid off and the friend is retired, wishing to supplement his retirement. What options do we have?
Timeshares In Gatlinburg
This house is currently paid off and the friend is retired, wishing to supplement his retirement. What options do we have?
Timeshares In Gatlinburg
Timeshares Feedback: Don’t do it.
Timeshares Feedback: Don’t mix business and friendship. One of them is bound to go wrong.
Timeshares Feedback: Your best option is to run! There is nothing that harms a friendship more than trying to invest together. You have to be very clear on how you can terminate this ownership if one of you wants to, what happens if 1 person wants to sell and the other doesn’t, who gets what, who is responsible to do what.
There are better ways for you to invest and there are better ways for your friend to earn more income from his home.
Timeshares Feedback: He can deed his house to you, so you are part owner and/or you can give him a mortgage on his home. You may want to go to the county court house and look at the public records to make sure there are no leins or other people tied to his property. The best way to take care of your intrest is to have all this done at a title company. They will search the title, make sure you have all the nessesary documents recorded at the courthouse, ect. (He can also get a reverse mortgage from a company, so you don’t need to take it out of your pocket.)
To see if you need a mortgage or deed of trust:
Tennats in common (deed):
Timeshares Feedback: Define your objective first. He wants to supplement his retirement income - what do you want? Do you plan to live in this house? Do you plan to someday own the whole thing? A fractional ownership doesn’t do much for you unless this is a vacation home that you would get to use according to your portion of ownership. See a lawyer and get every detail in writing then your name goes on the title.
Timeshares Feedback: I wouldn’t do that. It’s not a time-share and I guarantee you will wish you didn’t.
Timeshares Feedback: The others are right. You are asking for trouble - don’t do it!!! One of my co-workers went halfsies on a house with her uncle several years ago, and she’s had nothing but trouble ever since. For a while last year, her uncle was wanting to sell, but she and her husband couldn’t afford to buy out his half. Fortunately he changed his mind and she didn’t have to uproot her family and move 50-100 miles away to a house they COULD afford… but the uncle could always change his mind again.
Timeshares Feedback: Get a lawyer involved and have all of your legal documents notorized. Make sure you find a good lawyer. It is hard to get lawyers involved in deals with friends but, you have to protect yourself and your future. Could you just rent for a reduced price? He gets a little income and you get cheap rent?
Timeshares Feedback: Fractional ownership of a house is one of the worst investments you can make. With other investments (stocks, bonds, a whole house), if you don’t want it any more, you can sell it.
But, with fractional ownership, who else would be willing to buy it?
If you have fractional ownership, does that mean you and he would be roommates?
If so, a better way to supplement his retirement would be to lease the house to you (you would be paying rent and he would be the landlord.)