Expert: Dick Dennis - 9/23/2005

Question
Dear Dick,

A friend of mine approached me with an offer to purchase a home.  She would like to pull equity out of a condo that she has in North Carolina, but because she just closed on the home, it is too soon to refinance.  She proposed that she sell the home to me (at a profit equal to the amount equity she wants to liquidate) and then we she be added to the deed.  We would split all costs, expense, etc down the middle.  I don't think this is the smartest arrangement; I proposed that I purchase the property, and in lieu of putting her name on the deed, I sell (or give) some of the property rights to hear via an agreement.  For example, she doesn't want me to be able to sell without her, and she want's to make sure that she recieves a 50/50 chunk of the profits.  What do you think?  

Answer
I'm agin it!

It seems to me like your friend is too impatient, Erika, for two reasons.

1. I suspect real estate is going to sink starting next year. And if that be the case, you will not want any part of her property.

2. If am wrong and real estate does not sink next year, then she and you will have lots more on which to build some equity.

Then there is one more reason. You will find that it is usually best to own real estate completely by yourself. You cannot be dissatisfied with a partner and you can make your own mistakes. Also, it seems to me she came to you. You did not approach you. Therefore, she stands to gain. I don't know about you.

I do wish you well.

Dick Dennis dixiedee13@aol.com