Divorce... House for sale!

[markbrad]

I know a person who is entering a divorce situation, and has been saddled with the house and payments. She is looking to rent a place from me, so I started asking questions. If she could sell the house tomorrow, she would rent from me.... then I started thinking, there must be a way for me to help her and help me rent a place. I asked what she was looking at for a $ value. She said realtor said $320, her ex says $350, and she just wants to be rid of it! She even said an option was to walk away (she understands it would ruin her credit, but says it is shot anyhow!) So I know she is motivated. I have thought agreement foe sale.. no experience with this.



I am going to look at it tomorrow, and will try to ask more about details etc, but off the top wondering what you quick turn gurus might suggest as far as options to proceed if it is attractive. What questions should I be asking to get the nuggets?

Mark

 

[neill]

Some of the basic details about the house, such as bedrooms, baths, sq feet, attached/det garage, year built, upgrades: flooring, appliances, granite, deck, fireplace etc.



Then repairs required: major/minor (even paint/carpet/updating, etc)



Determine actual value today - will need realtor comps if you get close to a deal, what she is asking (and also if ex is on title, as you will need them both) in price, and what the underlying debt is- balance, rate, monthly payment, taxes, maturity date, payout penalty, and if it is current.



Is there a true spread between ARV (after repaired value) and what you have to pay including reno?



Most importantly:

What is the exit? Is there a market for rent to own that supports the underlying debt? (Ie. can you get an RTO tenant in place that will pay you enough of a down payment, plus monthly payments for cashflow and a payday down the road when they cash you out?). Or can you flip it and make money after reno, holding costs including insurance, legals, interest and realtor fees - is it a sale-able, desireable property (eg. not a 1918 built 600 sq ft bungalow with 2 bedrooms and no garage (illustrating in the extreme). The smaller the market, the greater the risk - same as what Don Campbell talks about in buy and hold. Can you buy it on AFS for buy and hold as a possible exit?



We have passed on deals that had decent equity but no obvious easy exit down the road - somewhere along the way, we absorbed the "Know your exit(s) - yes having multiple options is best - before you enter"





Hope this helps....