Posted by Andrew Smith (Phila) on December 09, 1998 at 16:29:45:
Be careful with your plan to buy something with a contractor friend. I know someone who did and they set things up wrong. Their plan sounded similar to yours with them buying the home and their contractor friend fixing it. They really messed up big time in one way. They were paying the holding costs. As it turned out their contractor friend did not devote the time to the project that he had originally planned to. He went into it thinking that the timing was right as it was going into the slow time of his year. The only thing is - that work kept coming up and he never devoted the time to the project. Really, what did he care since he wasn’t paying the holding costs. Their friendship almost didn’t survive the deal. In a situation like you are describing - if you buy the house make the contractor 100% responsible for holding costs associated with the mortgage or loan. That will give him a very big incentive to concentrate his enery into the project. Good luck.