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How to become really good friends with a friend … or, not

Many people who want to become first-time homebuyers lack the down payment, credit history, or income to make such a purchase a reality.

So, some young people decide to buy a condo or home, with a friend.

This solves the problem of coming up with the money to buy, but it also can create a huge number of problems, for the new co-owners.

The Wall Street Journal Online recently discussed the topic:

Buying a home is risky — in part because it’s a large investment that can take a lot of time and expense to sell. And in an arrangement where two individuals are linked by nothing more than a deed and a mortgage, the risks and complications are heightened.

Say your co-owner gets a job transfer to another state. Do you sell the home? Do you buy your partner out or bring in a new co-owner? And what if you don’t even like a prospective replacement housemate?

If you’re the one who decides to move on, meanwhile, getting your cash out of the deal may be more complicated than if you owned a home on your own and immediately put it up for sale.

How to deal with this? Well, it goes without saying, one word: plan ahead.

Lawyers can protect your interests, as well as those of your friend(s).

Although it may sound cold, “You need an exit strategy,” one attorney warns.

Complete story: Tips for Purchasing a House With a Pal to Save on Rent - By Diana Ransom, The Wall Street Journal Online