I have several lifelong friends (30’s, stable, childless) who are interested in a co-living together in a way that allows us to live communally while we each have our own privacy. A bit of research shows that in theory, a residential 4plex sounds enticing, because of their manageable size, low cost, and ability to be purchased with a residential mortgage.
Unlike most 4plex purchases, ours is entirely driven by a desire for a better quality of life and NOT investment / house hacking. But I figured there could be someone here that has attempted something similar, even if our end goal is a bit different.
In short, we’re trying to think of a reasonable 4 way ownership arrangement that could provide protection and equity building to each resident of a 4plex. As such:
The route of one of us buying the unit and renting it out to the other 3 won’t work because then there are 3 of us who are stuck renting indefinitely, while the 1 builds equity. The idea of a single mortgage with 4 tenants in common seems at worst a recipe for disaster and at best very brittle in the event of one member needing to move / wanting to sell. A condo conversion of the 4plex that would allow for individual mortgages – but that seems very expensive, time consuming, and maybe impossible depending on the property we pick out and it’s zoning. Purchasing 4 units in an established condo building could make it easier, but most/all of the condos in our city are either skyrises that would damper our communal living dreams, or are townhomes each costing what the entire 4plex would cost.
The only option that seems like it could be a reasonable route is some sort of co-op arrangement over the 4plex, where it’s owned by a single corporation, and each of us purchase 25% of the corporation’s shares in exchange for living in the building. Each member would also have to follow some established rules, and pay monthly fees.
I guess my question is, does a co-op conversion sound even remotely possible on a multi-family home? Is there a better route to accomplish what we want? We intend on speaking with a real-estate attorney, but any initial direction or help is greatly appreciated!