How to fund my daughter's and friend's condo downpayment?
Now, my daughter decides to buy a condo to live for the next 3 years partly as investment, but she intends to move back to the replacement rental unit in the newly-constructed building later ("because cheap rent under rent control would continue to apply to her 2-bedroom replacement unit in the newly constructed building"?) and leave the purchased condo to her friend to live and rent out.
My daughter has asked my wife to gift her 80% of the condo downpayment, and loan the 20% downpayment interest free to her friend.
My daughter earns $80k a year, with about $25k savings, while her friend earns $50k a year, with no savings. They intend to buy a condo at 80/20 equity split, but share the mortgage & expenses 50/50?
It is my opinion that: (a) they may be better to rent another 2-bedroom apartment, instead of buying, for next 3 yrs until their replacement rental unit in the new building is ready, (b) for the condo downpayment, it should be a loan (interest bearing or interest free)instead of a free gift to my daughter, as we also have 2 other children who may also ask for same, (c) her friend should get a personal mortgage or loan from a bank instead of getting a loan from us, and (d) they have should have their agreements (equity and expense split) in writing or see a lawyer, although my daughter says that a verbal agreement is good enough.
What are your recommendations?
By the way, what is the maximum mortgage if any can her friend get with $50k salary?