coolstuff41005 0 Report post Posted October 25, 2004 I just got a call from my ad tonight. Need some advice on a strategy. The couple are divorcing, wife is staying at the house, but about to move out. Husband said there is an equity of about $20000. They are also behind in payments for about three months. What is the best thing to do? Thank you in advance for any advice. Share this post Link to post Share on other sites
Mr.B 0 Report post Posted October 25, 2004 In this situation you make the rules, don't forget that. I am assumeing with that kind of equity you are thinking about doing a sandwich lease option right? If so, I would ask for a one year lease option with a right to renew the lease for five, one year increments. That way you can control the property for six years if you choose, but are only locking yourself into a commitment for 12 months at a time. If something unforseeable comes up and you no longer want to deal with the property you can choose not to renew. I would also would not offer anything above market price, infact since they are behind in payments I would ask for a discount. I would be nice and let them know your happy that you have a solution for their problem. Good Luck ~Mr.B Share this post Link to post Share on other sites
coolstuff41005 0 Report post Posted October 25, 2004 thank you for the reply Mr. B, but his main problem right now is that three months that he is behind, and he just recently lost his job. How can I do a lease option, if he is already three months behind? Share this post Link to post Share on other sites
Kimberly 0 Report post Posted October 25, 2004 How can I do a lease option, if he is already three months behind?You'd have to find a tenant/buyer with at least that much for option money and preferably more. If your tenant/buyer only has that much, you get no cash but you could get experience. My biggest concern would be whether or not the seller would make the payments to the bank from the tenant/buyer's rent. If you set it up as a sandwich deal, make sure you are sending the payments directly to the bank and not the seller. Share this post Link to post Share on other sites
coolstuff41005 0 Report post Posted October 25, 2004 Thanks Kimberly. I'm now thinking about purchasing this via Subject To. I have the fund to give him some cash, and make the mortgage current. Of course I will not give him all his equity, or I wouldn't be doing this business. We are suppose to meet this coming Saturday at the house (wife still at the house until Friday). The divorce proceedings is not finish yet, but he said his wife is abandoning her rights to the house. What kind of proof do I need for this? Share this post Link to post Share on other sites
Gary (MO) 0 Report post Posted October 25, 2004 Coolstuff~ The divorce proceedings should give 'clear' title concerning the wife, once the divorce is complete. If he's lost his job and his wife and he's 3 months behind in his payments then he's probably not interested in staying in the house and some 'moving money' might be what he's after - say $500? You don't mention (or perhaps I missed it....) what kind of shape the house is in; are there lots of repairs needed? Another question to ask is if there are any liens or other mortgages on the place. Happy hunting! Gary Share this post Link to post Share on other sites
coolstuff41005 0 Report post Posted October 25, 2004 Gary,The house from outside doesn't look that bad. Just need painting. They bought the house last year. I won't be able to see the inside until this weekend. My question is, do I have to wait until the divorce proceedings are finish? Also, he doesn't live there anymore, so by Friday, the house will be empty. Share this post Link to post Share on other sites
Kimberly 0 Report post Posted October 25, 2004 The divorce proceedings is not finish yet, but he said his wife is abandoning her rights to the house. What kind of proof do I need for this?You'd want a warranty deed with the husband's AND wife's signatures! You don't say if you've already talked with the wife or not, but in a divorce situation don't be surprised if what one tells you isn't what the other agreed to! My question is, do I have to wait until the divorce proceedings are finish?No, but both parties have to be agreeable prior to the divorce being final. Once the divorce is final, one of the two will have gotten the house. The agreeability of the wife may come down to how reasonable her attorney is. Share this post Link to post Share on other sites
Akinwale 0 Report post Posted October 26, 2004 The divorce proceedings is not finish yet, but he said his wife is abandoning her rights to the house. What kind of proof do I need for this?You'd want a warranty deed with the husband's AND wife's signatures! You don't say if you've already talked with the wife or not, but in a divorce situation don't be surprised if what one tells you isn't what the other agreed to! My question is, do I have to wait until the divorce proceedings are finish?No, but both parties have to be agreeable prior to the divorce being final. Once the divorce is final, one of the two will have gotten the house. The agreeability of the wife may come down to how reasonable her attorney is.<{POST_SNAPBACK}> Kim how famaliar are you with sub2 deals? Thanks, Akin Share this post Link to post Share on other sites
Kimberly 0 Report post Posted October 26, 2004 Kim how famaliar are you with sub2 deals?Not familiar enough to feel confident guiding someone else in another state through it! If you're interested in working out a sub2, find a local investor and offer to split the profits 50/50 in exchange for watching the investor put the deal together and being in on all parts, including paperwork, of the transaction. Cheapest way to get the needed education. Share this post Link to post Share on other sites
-Tony- 0 Report post Posted October 26, 2004 Okay what I would do is get a authorization to release info form and a poa talk to the lender and negotiate the arrears to be put on the back of the loan, maybe send one payment. of course all this time you tell the bank you will be managing the property. find out the pay off too while your talking to them. Get the wife to quit claim to the hubby and you file the deed. set the l/o up for Mtg payoff not to exceed the current balance. record a memo (I use a POA w/ an interest. Get a t/b in there Share this post Link to post Share on other sites
Gary (MO) 0 Report post Posted October 26, 2004 Tony~In a situation like this it seems to me that the only way to do this safely would be to get the deed to the property since the husband and wife are 'splitsville' and probably going to be hard to find in the future? Also, I'm wondering if a quit-claim is good enough to clear the title? Gary Share this post Link to post Share on other sites
coolstuff41005 0 Report post Posted October 26, 2004 Has anybody done anything like this before? I will try to contact my attorney this afternoon and will update the post after I talk to him. Share this post Link to post Share on other sites
Jonathan RexfordFL 8 Report post Posted October 26, 2004 Gary is on track here. Get the deed to the property is crucial. Now how are the financials for the property? I read that you have not seen the inside. Good luck here. Yes I have done more than a few. Share this post Link to post Share on other sites
coolstuff41005 0 Report post Posted October 26, 2004 Gary and Jonathan,When you said get the deed, did you mean the Warranty Deed? Also, is it possible to negotiate the payments that were behind to the back of loan like Tony said? Share this post Link to post Share on other sites
