Co-ownership and cooperative real estate purchases are a great way for people to enter the real estate market. While Toronto’s market is competitive, millennials have found a way by buying together. Take the following case study of two millennial couples who were able to pool their resources together and purchase their first home in the Annex.

STEP 1: FINDING THE PERFECT PARTNERS
Jozo, a commercial real estate asset manager, and Laurie, a mechanical engineer, both 28, and Natalia, a registered nurse, and Nick, also a commercial real estate asset manager, both 28. These two couples were good friends and were both on the hunt for a home. Divided, they were unable to find a property that fit their needs and wants and was within their budget. They decided to pool their incomes and buy a property together. They were confident they would all be able to live under the same roof.

STEP 2: CREATING THE FINANCIAL MODEL
As a group, the two couples were able to budget up to $1.7 million dollars for a home. They planned to split the ownership 50-50 but were open to changing the split depending on the property.

STEP 3: CREATING THE GROUP AGREEMENT
Operating and decision making would be split evenly between the two couples. Each couple would live in their own unit of the property and would be responsible for upkeep of their own spaces. Utilities were shared evenly and paid through a bank account that both couples added to and mortgage payments and property taxes would be split based on equity from a different shared account between the couples. Natalia and Nick had a car and preferred to have access to a parking space. The couples would enter a 3 year “lock period” during which neither couple could sell their portion of the property. After that period, either couple can opt to sell with the other couple able to buy them out at market price before any other offers are to be considered.

STEP 4: CREATING THE LEGAL AGREEMENT
All decisions were written in a joint venture agreement. Once the property was found, the couple agreed to split ownership 55-45, for the upstairs unit and downstairs unit respectively.

STEP 5: FINDING THE PERFECT PROPERTY
The group found a duplex in the Annex listed for $1.6 million. The property was 2,500 square feet, with parking, a small front yard and a backyard. It had four bedrooms and five bathrooms. A new wall and entrance would be added to the lower unit in the front hall as a condition of the purchase.

Jozo and Laurie chose the upstairs suite and Natalia and Nick chose the bottom suite. Ownership was split 55-45. The couples were able to purchase the property $100,000 under asking.

CONCLUSION
The duplex isn’t a forever home for either couple. However, for the time being, it suits them perfectly. The couples regularly share dinners and even share duties like setting up the hydro meter and calling Bell for internet issues. They have reported no major conflicts and are happy to continue living together.

Disclaimer: Original source found at https://torontolife.com/real-estate/upstairs-downstairs/