Purchasing land with joint buyers

[surso]

Looking at purchasing some land with 2-3 other close friends and/or family members. How does the process work if everyone would be taking out a loan? Pretty sure we would need to create an LLC for some personal asset protection, but not sure if the bank lender would allow for loans from multiple people with none of the individuals being able to solely handle the total amount.

[White Falcon]

Don't make deals with family or friends! That is a good way to lose both.

[sailor]

Don't make deals with family or friends! That is a good way to lose both.

This !

[mikemorvan]

X3

But if you proceed, I think you’ll have to form some sort of organization.

[kae006]

4 parties all with separate loans? That sounds like an absolute nightmare.

[GarGuy]

The only way I can see this working is if the interest is divided.

[DeerGeek]

I am trying not to be a negative person… just playing devils advocate…

This rarely ends well with family and friends. There’s always has to be an exit strategy (and that is never thought of before hand). What if one member wants off in 4 years? what if there is a divorce? do you all have the same wildlife management and land goals? Can the others bring guests or friends? Are weekends blocked off for use?

What about equipment? Do you split the equipment, repair and fuel cost? What if One member could care less about food plots and doesn’t want to chip in for a tractor, yet still wants to hunt over the food plot during the season?

My advice… Purchase something smaller on your own… Improve it and then flip it and buy something bigger… Keep doing this until you find your dream ranch!

[Grant2]

Don’t do it! Bad idea with that many involved never ends well.

[SPUD]

need to form a true organization. either a LLP or something.

issue shares of it. have rules in there about what it is to be used for, Who can use it, how heirs will be handled in the event you die, what happens if you want to sell your share. how are taxes paid. Who will be the money person

i know a few families that have done this with Colorado houses, florida condos and even airplanes. All depends on the individuals it can work

[Gumbo Man]

I’m sure you don’t need anymore negativity but what if one principal defaults on their loan?

[6.5 shooter]

Seems like the best thing to do would find property that is connected or take a piece property and sub divide it. That way each person is responsible for their own piece.

[Counselor]

I did this with some buddies a few years ago. We each set up individual LLCs and created a Joint Venture Agreement for the land purchase. All of our incomes were consider for the loan and there were no issues with the loan. We sold it after only 2.5 years. Even though I knew better than to buy with my friends I was too enamored with the property and let that be the driving force. Be sure you know what you are getting into (by sharing the property) and set up a written agreement outlining all ground rules and expectations (work to be done, etc). I still miss the place but will never buy property again unless I am the sole owner. These guys were my close friends but it was a mistake and there were some difficult conversations that were had. We were lucky and were able to sell without a loss even though one of the guys fought the process.

[M16]

I bought some property with a good friend 16 years ago. We got a better deal with a larger purchase. The property was split at closing. We built a headquarters together and don't even have a fence between us. It has worked out great for us. We've also bought two other ranches together and they have worked out as well.

[Trapper76]

I have been in a partnership on our ranch for over 20yrs. We are like minded and pretty easy going. We talk about everything, and share all expenses evenly. Like others have said it’s a recipe for disaster, but can work if with the right people.

[dirtybay]

Survey out each portion. Best way