2 millennials who have bought a combined 22 properties with friends and family explain how they got into real estate without waiting on a spouse
Open House Austin
- Two millennials who bought homes with friends say "houses before spouses" is the way to go.
- They bought a beach house, lake home, and ranch house with friends, which they use for vacations.
- The key, they said, is choosing friends who are trustworthy and good communicators.
Kristina Modares was in her early 20s and renting a room in a five-bedroom home when she decided that she could be using the money she was spending to buy her own property.
However, she said that when she started looking, the real-estate agent didn't take her seriously because of her age.
When Modares decided to try again two years later, it was with a friend. She said the two went in as 50-50 owners on a triplex in the San Antonio area, which they rented out before selling it 2022.
Since then Modares has purchased eight properties with friends and family that have variously served as rental properties and primary residences. Her portfolio has included a bungalow in Austin and a beach house in Florida with her sister; a five-way partnership on a home with a tiny house with coworkers; and a primary residence with her boyfriend.
She's also partnered with her friend Steph Douglass on a home in San Antonio and a lake house for company retreats for Open House Austin, the real-estate company Modares and Douglass created after learning the ins and outs through their own purchases.
Insider verified the ownership status of each home mentioned in this story in which Modares and Douglass are full- or part-owners, though the percentage breakdown of ownership was not always clear.
Nationwide, many younger Americans have recently purchased homes with friends instead of significant others, a trend that Modares and Douglass called "houses before spouses." Modares and Douglass run a "buying with friends" minicourse to encourage clients to explore less-conventional real-estate partnerships.
"No one was teaching first-time homebuyers. Everyone was like, 'Millennials don't have money, and they're never going to do this, and it's not possible for them,'" Modares told Insider. "It is possible, but you just have to be creative. I bought every single property with friends, and that was the only way I could get started, and now it's my preferable way of buying homes."
Modares and Douglass said despite some hesitation from many of their clients, millennials, in particular, had started catching on to more nontraditional partnerships.
"Our thesis for real estate is basically making our lives better, not just growing our net worth," Douglass told Insider. "We want to make our lives exciting and fun with our friends, and bring up our community at the same time, not just buying little boxes, like we grew up hearing what real-estate investing was."
Seeking community through homebuying
Douglass, who was a teacher at the time, bought her first home solo at 24. But she saw Austin's rapidly growing housing market as an opportunity to break into the real-estate scene, so she partnered with her mom and "house-hacked" her way through paying the mortgage. That meant having a roommate and renting out part of the home on Airbnb as well as renovating detached house in the back.
After the success of this partnership strategy, she purchased another residence with her sister and best friend, which is now a rental property.
Douglass said she now has part ownership of 16 properties. She's bought a commercial space with Modares that they've rented out to food trucks, a ranch through a five-way partnership with friends that's now a vacation home and short-term rental, and numerous properties with her mom and uncle.
Douglass said she'd sought stronger connection with friends through these experiences, adding that homebuying should not be "superficially limited" to just significant others. Not all friends make good real-estate partners, Douglass said, but she's found that the complicated conversations she's had with friends over purchasing homes have paid off, as she was able to buy homes in desirable areas much sooner than most of her peers.
"You can say that that's a risk and you're going to lose that friend because they're going to treat you poorly or they're going to do you wrong. Or you can say this is going to make us closer and I'm going to really get to know this person," Douglass said. "I have become a better person through partnering with my friends and my family, and you really learn about a lot about them."
Especially in a city like Austin — which has become one of the least affordable US cities, partly because of steep housing costs — Douglass said this method of homebuying could be a strategic alternative.
Buying homes with friends as investments
Modares and Douglass said teaming up with friends got them started on homebuying significantly faster than either thought was possible, especially when Modares said she didn't have a stable W-2. Closing on homes was much cheaper with friends, they said, and having shared responsibilities and workloads that could be divided efficiently was also a plus.
Douglass said Open House Austin's objective was "to open people's minds away from just the traditional model of, I have to get married, and then before we have a kid, we're going to buy a house and move in."
While Modares and Douglass have had clients purchase homes with friends and then move in together, they said they'd encouraged some clients to buy homes with friends to use as investment properties that double as vacation homes.
"We really want to open people's minds up because when they think of buying with friends, they think everyone's living in the property together, but that sounds like a lot," Modares said. "To not only buy the house with friends, renovate the property together, and then live in the property together, that would be a really good reality-TV show."
The critical part of homebuying with friends, they said, is the operating agreement, which outlines the terms and conditions of a real-estate partnership. The partnership will work only if everyone is on the same page about ownership percentage, initial cash contribution, how to manage the property, and an exit strategy. Though selecting the right partner who is a clear communicator, handles stress well, and has a shared vision is half the battle.
"Unlike the group project, where someone's going to do more work, you have to lay all of the details out beforehand," Douglass said.
Are you a homeowner who recently purchased a home with friends? Share your story with this reporter at nsheidlower@insider.com.
from Business Insider https://ift.tt/GsMtp7g
via IFTTT
Comments
Post a Comment