Help with selling portion of condo.

Not sure if this would be helpful. I recently encountered a similar situation with my sister. Sister and I agree to buy condo together. I have 1st property already as my primary residence and have full deposit. Sister only has 5%. I want to help her out to get into the real estate market. Loan get split in half 50%.

Example, condo is $100. I paid $15 deposit. Sister paid $5 deposit. We both get $40 debt (split even). Sister owe me additional $5, which she is willing to give up rental income and absorb additional cost until $5 is paid.

Mortgage and title are under both of our names.


Your situation is slightly more complicated. Depending on what price you are selling it to him. If you want to use the current market value at $700,000. Meaning he will purchase the half condo from you for $350,000 with and the remaining half debt of $350,000 ($175,000 each). Think of it as selling part of your business.

For you:
Losing 50% condo.
Responsible for $350,000 (half of market value).
Owe bank $175,000.
If you put your brother’s $100,000 in the mortgage, you can reduce mortgage to $75,000.

For your brother:
Gain 50% condo.
Responsible for $350,000 (the other half of the market value)
$350,000 (purchased price) - $100,000 (assuming he put it into the mortgage). He will owe bank $250,000.

All future income or expense will be split in half.

You can calculate mortgage payment base on debt percentage.

Hope this helps.

Recommend speaking to a RE accountant and set up a corporation
Transfer condo 1 into the corporation
Issue 100 shares for your corporation, total the current market value (verified by multiple assessors)
Your brother can buy up to 50 shares

This is the proper way to set up and better for future tax issues if your accountant is smart (wink)

Based on my understanding (im no expert), this will need to be a new title with a new mortgage. Your lender can't just add your brother to it without having to requalify for a new mortgage.

Here's an example:
- current value: 700k, this will be the new purchase price of the condo.
- Your current mortgage owing: 350k
- Your current equity: 350k (this along with the 100k from your brother can be your down-payment equalling to 450k)
- New mortgage: $450k down, $250k mortgage.

Now if you wish, you can technically have him give you 100k in cash so you can keep it for yourself. You can then port your 350k equity into the new mortgage and get a mortgage of 350k.

Mind you, the mortgage, regardless of ownership percentage does not split between you two based on the ownership percentage. You both will be fully liable for the entire mortgage amount individually and that will be used to assess your liabilities. For example, a 350k mortgage shared between you two will count full 350k against both of your individual credit files. So if you buy another property in the future or close Condo 2, you whole 350k amount will be used by your condo 2 lender when assessing your mortgage application for condo 2.

Hope this helps.

GameChannel wrote: ↑ Mind you, the mortgage, regardless of ownership percentage does not split between you two based on the ownership percentage. You both will be fully liable for the entire mortgage amount individually and that will be used to assess your liabilities. For example, a 350k mortgage shared between you two will count full 350k against both of your individual credit files. So if you buy another property in the future or close Condo 2, you whole 350k amount will be used by your condo 2 lender when assessing your mortgage application for condo 2.

I will add that the whole 350k amount will be counted as debt towards your new condo, but only half of the rental income will be counted as your income. Based on this I'm very much against joint purchases unless it's with a spouse. If you do go this route I'd say maybe better to close your second condo first.

BTW with 100k on hand why doesn't he buy his own condo?

TwinkoStar wrote: ↑ I will add that the whole 350k amount will be counted as debt towards your new condo, but only half of the rental income will be counted as your income. Based on this I'm very much against joint purchases unless it's with a spouse. If you do go this route I'd say maybe better to close your second condo first.

BTW with 100k on hand why doesn't he buy his own condo?

Yep. Thanks for the additional clarity. I should have mentioned it!