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Steps to buying your co-owned investment home Overview

Overview

Shared investment home is more affordable for most people than buying (and managing) an entire home alone.

Cohome offers true ownership of real estate. We do not offer timeshares (which just grant the right to visit, without having ownership of the actual property). When you buy a portion of an investment property through Cohome, you are a true owner of the property. Your property share will appreciate with the market growth. If you choose to sell it one day, you can sell it at the fair market value.

This article covers the buying process, from understanding the pricing, to closing on your home.

01

Understand the price of the property share

You’ve found the right flip or rental property for you. Now, you’ll want to understand what goes into the ownership share price so you can know what to expect.

Our homes are not marked up from their market price, but there are additional costs included in the purchase. The price of an ownership share includes:

The down payment on the ownership share. Each share is 1/8th of the whole-home list price.

Home upgrades if needed (at cost)

Real estate transaction costs, such as the appraisal, inspection, agent commissions, and legal fees.

Closing costs ,such as prepaid property tax and insurance required by the lender.

Cohome service fee,a one-time fee for the cost of finding co-owners and LLC formation (including legal fees).

Reserve fund, 1/8th of total funds that would be needed to cover 6-36 months’ worth of property expenses.

Financing fee, assessed at closing for buyers who choose to finance up to 70% of their purchase.


In the purchase process, Cohome acts as your dedicated program broker for co-ownership. It’s similar to the role of a real estate agent, except that a regular real estate agent isn’t able to provide the this type of service for a fully managed LLC co-ownership program.

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02

Learn about our financing options

We finance about 50% of the total value to improve the returns. Financing a regular home can be challenging. However, when you invest through Cohome, you won’t need your W2, FICO scores and personal guarantees.

Loans are funded on the basis of the property’s potential to generate its own income above its costs , rather than on the investor’s personal income.

And because your ownership is mediated through your stake in a custom LLC, the purchase won’t affect your debt-to-income ratio or your personal credit rating, giving you more investment leverage.

Next, you can get details about your earning potential in a personalized walk-thru of the numbers.

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Mao Du, Founder and CEO

Financing a regular home can be challenging.

With Cohome, we arrange financing for the LLC. As an investor, you won’t need your W2’s to finance a property with Cohome.

Loans are funded on the basis of the property’s ability to generate an income above its costs, rather than on the investor’s personal income.

Because of this, the purchase won’t affect investors’ debt-to-income ratio or personal credit report.

03

Do a walkthrough of the numbers

After you contact Cohome about the property, you’ll meet with our sales team to go through all the information we have about the home, including estimated rental returns and costs.

You’ll be able to view an interactive document with an ownership cost breakdown, and rental income estimates.

You’ll see variable scenarios, and how they would impact your numbers.

Once we’ve answered all your questions, let us know if it’s time to reserve an ownership share of the property.

Get answers to your questions

04

Reserve your ownership share of the property

If you’re buying into a home that already has a co-ownership LLC with co-owners in place, you’ll make an offer on a share of the home, which the seller can list at market rate.

When your offer is accepted, you’ll join the property-specific LLC and LLC operating agreement with other owner-members of the LLC.

If you’re making an offer with other co-owners on a whole home, Cohome will form a new property-specific LLC with a with a custom LLC operating agreement, and prepare a purchase offer on the home.

We’ll arrange financing to acquire the deed under the LLC. You’ll be listed as a member of the LLC, with a minimum ownership interest of 1/8 (you can own up to 1/2 of the home, if that many shares are available).

The co-owners own shares in the LLC, which buys the home. You’ll have true ownership of the home. In legal terms, this is called an ownership interest.

Once the offer has been accepted, we’ll walk you through the process and paperwork for a streamlined experience.

05

Make an offer

After you contact Cohome about the property, you’ll meet with our sales team to go through all the information we have about the home, including estimated rental returns and costs.

You’ll be able to view an interactive document with an ownership cost breakdown, and rental income estimates.

You’ll see variable scenarios, and how they would impact your numbers.

Once we’ve answered all your questions, let us know if it’s time to reserve an ownership share of the property.

If you’re ready to move forward, we’ll verify your finances. You’ll reserve your ownership share by:

Signing the Cohome Service Agreement

Signing the LLC Operating Agreement

Paying a reservation fee of 7% of the share price. This fee is refundable within 15 days. After 15 days, it becomes a non-refundable deposit that will be credited toward your closing costs.

If you’re buying a share of a home that’s already under a co-ownership LLC, you’ll skip to step 5.

If this is a new property, we’ll identify any additional like-minded co-owners interested in the same property, until there are buyers for 100% of the home.

As all 8 shares are claimed by interested co-owners, you’ll have access to our team, your designated agent, and lender for any questions. Once all ownership shares are reserved, we’ll be ready to make an offer!

06

Quick, simplified closing

Quick, simplified closing Cohome’s streamlined closing process can be completed within a few weeks.

When all the owners have signed the purchase agreement, we’ll send additional documents to review and sign. Some will look familiar if you’ve bought a house before, such as the seller disclosures, appraisal report, and inspection report.

Others are specific to the property LLC model, including the Project Management Agreement and LLC Operating Agreement (or Amendment, if applicable), and Home Policies.

After you’ve gone through the paperwork, we’ll review the documents with you on a live call so we can answer any remaining questions.

Once you sign and wire the funds to an LLC-specific escrow account, your purchase will be complete.

Congratulations! A better lifestyle awaits.

Next up:

All about co-ownership of a managed property

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