Seven years ago, Phil Levin and his girlfriend, Kristen Berman, pondered a common question: Should we move in together?
Levin assumed they would take a predictable path and find a more affordable apartment outside expensive San Francisco. But Berman, a behavioral scientist, shared her reservations about leaving their network of friends — and some facts to back it up.
“All the behavioral science research shows that’s one of the worst things you can do for your happiness,” says Levin.
Instead, the couple rented a Victorian-era mansion in San Francisco’s Hayes Valley neighborhood and invited nine friends to move in. Today, they co-own a multi-unit property in Oakland, California called Radish, which houses 17 adults and two infants.
It took some effort to find the right home and to arrange the finances. But the now-married couple couldn’t imagine raising their lives — or their daughter — any other way.
“It was great to have this extended family of ‘aunts’ and ‘uncles’ close by,” says Levin.
Many fellow buyers operate on a smaller scale. But regardless of the size of your group, co-buying requires extra planning and paperwork. If you’re willing to get vulnerable about your finances and long-term goals, the reward of companionship can be worth it.
Keep an open mindIn the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, a record 5% of new home buyers were “other household composition”—that is, anything other than single, married, or coupled.
“It can be a great situation and a way to enter the market that they otherwise wouldn’t be able to enter,” says Don Koonce, a Seattle real estate agent who has helped dozens of fellow buyers during his eight years in real estate.
Many of the fellow buyers Koonce has worked with are platonic friends who have lived together for years. But they are as diverse as the types of homes they purchase, ranging from traditional single-family homes to apartments and duplexes.
The right house will depend on the size of your group and tolerance of personal versus shared space. Homes with basements work well for separate living areas, says Koonce, or you could remodel.
Recently, Koonce helped a mother and daughter purchase a split-level home that they converted into two distinct units, including separate kitchens.
“It was beautiful,” he says. “I don’t see any problem with reselling it because someone could rent it out.”
Test your relationship under stressEven for family members or veteran roommates, the financial commitment of co-buying raises the stakes.
Ashley Agnew is an investment advisor and financial therapist at Centerpoint Advisors, an investment management company based in Needham, Massachusetts. When working with fellow buyers, she plays out worst-case scenarios to “stress test” the relationship, such as how they handle major home repairs or theft.
“You really have to be a little bit financially naked with the person you’re buying from,” she says. “There has to be a lot of transparency.”
Agnew always advises fellow buyers to seek legal advice. A real estate attorney can draft a cohabitation agreement — something that’s not just for romantic partners, she notes. This way, all parties know what to expect if someone wants to get out of the home ownership obligation.
“It’s almost like running a mini-business, especially if it’s not a couple,” says Agnew.
A real estate attorney can also help fellow buyers understand options for giving titles to the property, such as joint tenancy or tenancy in common. Each scheme has advantages and disadvantages and legal obligations.
Find the right resourcesTo take your plans from dream to reality, finding a lender that understands and supports the unique needs of fellow buyers is essential. That’s often the first hurdle, Koonce noted. Some brokers are also hesitant to work with fellow buyers.
“It’s a lot more paperwork,” he says, “and a lot more coordinating and getting people to agree.”
To provide better service, Koonce has obtained a professional certification established by Seattle-based real estate startup CoBuy. The company offers training for brokers, lawyers and lenders, as well as services for fellow buyers themselves.
After founding Radish, Levin found his inbox full of questions about buying and living together. The interest exposed an information gap: people craved reliable guidance to do this successfully.
So in 2020, Levin teamed up with good friend Gillian Morris to co-found the Substack newsletter Supernuclear. It offers advice, templates and tools to overcome the common challenges of co-buying and co-living.
“We didn’t invent this concept,” says Levin. “We’re kind of standing on other people’s shoulders, so there’s a kind of pay-it-forward element where we wanted other people to experience the happiness and meaning we’ve been given through this.”