Selling half a house to a significant other
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All Over, USA · Member since 2017 · 689 posts · 756 votes
8yOriginally posted by @Eric C.:
@Charlie MacPherson Marriage does increase someone's likelihood of staying with someone that they resent and grow to despise with time, but feel obligated to stay with. I personally would rather have someone stay with me out of choice, not obligation. Apparently you would rather the opposite. It is quite possible your wife has wanted out for 38 yrs but due to moral or religious obligation, she stays with you. Or I could be wrong, but only your wife will EVER know.
On the topic at hand, I have no problem having something written up showing we each are 50% owners of the property, and if in the future we feel we would be happier not together, sell and divide. My question, of which you, Charlie, have been no help, is how to do that asset split now. How to sell her half the equity.
This some suspect/millennial-ish if I've ever heard it.
So in summary: We have gotten to the point where OP is scrutinizing a 39-year-long marriage, and talking about feelings, choices and obligations, after asking internet strangers about selling HALF a house (what the actual F) to someone who could walk away whenever they feel like it just cause they find someone cooler than he? Triggered when there was a legitimate response which was more logical than the ridiculous question to begin with. She doesn't want to pay rent, but instead wants to buy a place together? Even if it means paying for half a property that you already own? Huh? We all know how this one is going to end...
*grabs popcorn*
91 Replies
- Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes8y
I understand the confusion. Look at it this way: Your share is blue, her share is pink. If you were to break up, it makes sense that you would walk away with your blue share and she would walk away with her pink share, BUT there's also a purple share (yours and hers) that is created as soon as you and she together put any money into the house either in the form of mortgage payments, payment of taxes, repairs, etc. That purple share is difficult to parse out if the two of you were to break up.
One way to do it is to keep meticulous records of who paid what then at the end (the breakup, if that were to occur) take the percentage of who put what in and add that to the 50% that both of you started out with when you signed the tenants in common (TIC) contract. However, even if you do that, you are still not accounting for the sweat equity that you put into the place v. what she put in. If you were to have this asset pre-marriage, then get married and build equity together, then divorce, it would be much easier to figure out your relative shares (pre-marital= all yours; marital share=50/50 split in most states and that 50% would be added to your pre-marital share).
You could sign a contract stating that all equity buildup that accrues after signing the TIC contract is split 50/50 and that's a way to make the transaction easier. Really you can contract just about anything and if it's reasonable (and courts are liberal with "reasonable"), then your contact terms will be upheld and you can avoid potential litigation over the purple share of the equity.
- Real Estate Investor · Columbia, MD · Member since 2014 · 172 posts · 94 votes8y
I forgot the add the disclaimer- talk to an attorney in your area to make sure that any contract that you draft follows your local laws.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Sandra Holt:
You could sign a contract stating that all equity buildup that accrues after signing the TIC contract is split 50/50 and that's a way to make the transaction easier. Really you can contract just about anything and if it's reasonable (and courts are liberal with "reasonable"), then your contact terms will be upheld and you can avoid potential litigation over the purple share of the equity.
THANKS! This is very useful. Basically that is what we were looking at doing.
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Eric C.:
Originally posted by @Aaron Hunt:
Originally posted by @Eric C.:
Originally posted by @Sandra Holt:
As a divorce attorney, I completely agree with not mixing pre- and post- marital assets. Get married first, then combine assets. It's not pessimism, it's just good advice.
I am not disagreeing, I am just trying to understand why this is considered mixing assets, rather than a transaction. Given there would be documentation as to the ownership rights of the property, no different than any other business partnership, there would not be a mixing of assets. Marriage would be combining assets, this would not. She would have her equity in the property, and I would have mine....All spelled out on paper. Sure, things could happen and we might have to sell the property to divide the assets....but in the grand scheme of things, that is no big deal.
What if one of you doesn't want to sell the property?
Oh, you're SO RIGHT. If we were married and bought a place together, and then one wanted to sell, and the other one didn't, that would solve everything. Thanks for coming back into the discussion. I missed your wisdom and insight.
Oh right, cause in your world there are dating lawyers and dating court...kind of like divorce attorneys and divorce court. Oh, wait...
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Sandra Holt:
I understand the confusion. Look at it this way: Your share is blue, her share is pink. If you were to break up, it makes sense that you would walk away with your blue share and she would walk away with her pink share, BUT there's also a purple share (yours and hers) that is created as soon as you and she together put any money into the house either in the form of mortgage payments, payment of taxes, repairs, etc. That purple share is difficult to parse out if the two of you were to break up.
One way to do it is to keep meticulous records of who paid what then at the end (the breakup, if that were to occur) take the percentage of who put what in and add that to the 50% that both of you started out with when you signed the tenants in common (TIC) contract. However, even if you do that, you are still not accounting for the sweat equity that you put into the place v. what she put in. If you were to have this asset pre-marriage, then get married and build equity together, then divorce, it would be much easier to figure out your relative shares (pre-marital= all yours; marital share=50/50 split in most states and that 50% would be added to your pre-marital share).
You could sign a contract stating that all equity buildup that accrues after signing the TIC contract is split 50/50 and that's a way to make the transaction easier. Really you can contract just about anything and if it's reasonable (and courts are liberal with "reasonable"), then your contact terms will be upheld and you can avoid potential litigation over the purple share of the equity.
Do you know of any good dating attorneys for my friend here?
- Rental Property Investor · Oakland, CA · Member since 2017 · 50 posts · 12 votes8yCan’t believe my eyes.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Aaron Hunt:
A contract between two adults is easier to settle than what you will go through when your wife finally runs off with the person she is currently sleeping with.
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Eric C.:
Originally posted by @Aaron Hunt:
A contract between two adults is easier to settle than what you will go through when your wife finally runs off with the person she is currently sleeping with.
Foreshadowing your future or anecdotal experience?
Great plot line to this fairy tale story:
As a last ditch effort to regain her love, he signs the split equity contract with, “Marry me? <3”
Discouraged by all, pitied by few, respected by none. The unrequited puppy love story of Eric C.
- Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes8yWhy not do a mock ownership? Every month she pays you what she would pay with a mortgage on 50% of the house minus what would be her equity build up, eg principle plus 3-5% appreciation. That money is required to be deposited in vanguard retirement 2048 fund....but not necessarily in an ira, however a Roth can be a down payment on a house. She is effectively not “throwing money away on rent” but still paying her share. Private companies do this with stock...offer employees mock stock options.
- Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes8yPlus, why pay a bank interest? Why not owner finance to her? And who sets the price? A rental is typically a bit of a dog after a few years...imo. Not top dollar on the market. Who is going to do all the cleaning and painting the rooms once you move in? Is she balking at investing sweat equity in a property she doesn’t own or just independent and wanting to owe you nothing...or maybe wants ownership rights to enforce her right to be a part of the house decisions? But yes, Jay answered the op question. Just an odd request than usual here. Why don’t you both live there rent free if you own free and clear? No different for you than if she got her own place but hung out at your house all the time. If you’re not married, you’re courting...or is she not worth it? Or are you the prize? Sorry, showing my generation:-)
- Vendor · Melbourne, Victoria · Member since 2016 · 56 posts · 19 votes8yNo need to comment on people’s relationships especially if they are strangers to you, young man. This site is for like business minded people nothing like fb, what you are after you may easier find there. My thoughts 💭
- Member since 2016 · 13k+ posts · 12k+ votes8y
If we were to consider Eric to simply be a investor then we have provided our advice and our personal opinions, we should give him the benefit of the doubt and assume he has taken all into consideration, and now holds a position.
He has received advice regarding his basic question. No further discussion is of any value to him.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Eric C.:
@Aaron Hunt Don't scrutinize my relationship commitment and I will not point out hypocrisy when I see it. If more than 50% of mortgages ended in foreclosure, would everyone advocate buying rather than renting? There are plenty of unhappy longtime marriages where one or both parties are miserable but because they are "married" they stick it out.
So, I am going to avoid all the marriage/nonmarriage discussion. I have no interest in engaging in that part of it.
However, I do want to touch on something you mention here, but something you may not be thinking about (except to use as an example in the marriage discussion). Default. If she takes out a loan, and then defaults, the lender WILL foreclose. How do you intend to save your half? The bank won't just be foreclosing on her half. When she takes out the loan, most likely the entire property will be used for collateral.
Purchasing property as partners is best suited for short term projects, or projects with defined terms. This provides a road map for when the partnership dissolves, or partners want different things for the investment, and can't agree. You start to muddy the waters when you live in the asset of your partnership. What happens when it appreciates to a point where 1 partner wants to sell? What happens when 1 partner defaults? What happens when 1 partner wants to move to another place, but the other one doesn't...and so on.
If you think you can address all of these issues with some resolve, great. My guess is it will be hard to address all of the issues that come with partners where 1 or both occupy the investment. Even hard when there is a romantic layer added. Even hard without a legal commitment. And so on. You get the idea.
I like the idea of providing her with Seller financing for her half. Let her make payments to you based on the terms you establish. Make it a lease option so that she goes on title when it is paid for. That may be the only doable option, if any, but again, the above issues will still remain.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Cara Lonsdale:
That scenario would be no different than if we, or any two, married or not, romantic or not, bought a separate place to live in. Many couples buy a property together. In fact most do. This is what most commenting here fail to even consider. They say "go buy a different place together" and sure, we could do that but the underlying risk that you and all are saying is still there, whether it is this or any other property, and whether we are married or not.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
That scenario would be no different than if we, or any two, married or not, romantic or not, bought a separate place to live in. Many couples buy a property together. In fact most do. This is what most commenting here fail to even consider. They say "go buy a different place together" and sure, we could do that but the underlying risk that you and all are saying is still there, whether it is this or any other property, and whether we are married or not.
Hold on here. I am not making any judgments about your partnership. I prefaced my comments that way. I understand that you feel defensive because of the many posters focusing on your marital status instead of your question. But I am not doing that. So, please go back and really read what I wrote.
You are right in some regard, it IS no different. I mentioned the default scenario, as that IS an issue in ANY partnership structure, where the capital is in different forms. If 1 person comes in with cash, but the other is loaned, that provides an issue in the case of default because the entire asset would be collateralized. So, how will you save your interest in your half if it is foreclosed on?
This IS, however, different in that you are adding layers (as I mentioned) that complicate partnerships.
Look at the syndication model. This is a good one for comparison. A bunch of investors go in on a deal together with a syndicator managing the decisions (you will see why this person becomes an important role). The investment is held for 3 years (can be any length of time, but usually is a 3 year or 5 year average), and then sold. Of course if the market shifts, or the rents shift, there could be cause to sell sooner or later, but the point is that the syndicator decides, not the group of investors as they may all have different opinions about what to do. NOW, IF all but 1 investor came in with cash, and the 1 came in with a loan that tied up the property and then defaulted, it would put the other investors in a high risk position. You would NEVER get an investor to buy into that deal.
So, as an investor, I am telling you that what you are proposing has flaws that you need to consider.
The pink, blue and purple is great for when things are going well. However, you need a solution for when they don't (and let's hope you never have to use it). So, when you can answer the question, "What do I do if she defaults on the loan" to a satisfactory result, then you may be able to find a solution.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Cara Lonsdale:
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
That scenario would be no different than if we, or any two, married or not, romantic or not, bought a separate place to live in. Many couples buy a property together. In fact most do. This is what most commenting here fail to even consider. They say "go buy a different place together" and sure, we could do that but the underlying risk that you and all are saying is still there, whether it is this or any other property, and whether we are married or not.
Hold on here. I am not making any judgments about your partnership. I prefaced my comments that way. I understand that you feel defensive because of the many posters focusing on your marital status instead of your question. But I am not doing that. So, please go back and really read what I wrote.
You are right in some regard, it IS no different. I mentioned the default scenario, as that IS an issue in ANY partnership structure, where the capital is in different forms. If 1 person comes in with cash, but the other is loaned, that provides an issue in the case of default because the entire asset would be collateralized. So, how will you save your interest in your half if it is foreclosed on?
This IS, however, different in that you are adding layers (as I mentioned) that complicate partnerships.
Look at the syndication model. This is a good one for comparison. A bunch of investors go in on a deal together with a syndicator managing the decisions (you will see why this person becomes an important role). The investment is held for 3 years (can be any length of time, but usually is a 3 year or 5 year average), and then sold. Of course if the market shifts, or the rents shift, there could be cause to sell sooner or later, but the point is that the syndicator decides, not the group of investors as they may all have different opinions about what to do. NOW, IF all but 1 investor came in with cash, and the 1 came in with a loan that tied up the property and then defaulted, it would put the other investors in a high risk position. You would NEVER get an investor to buy into that deal.
So, as an investor, I am telling you that what you are proposing has flaws that you need to consider.
The pink, blue and purple is great for when things are going well. However, you need a solution for when they don't (and let's hope you never have to use it). So, when you can answer the question, "What do I do if she defaults on the loan" to a satisfactory result, then you may be able to find a solution.
I am not being defensive, I am saying that in any partnership there is risk and needs to be some exit strategy. If I have to sell the place, it isn't a big deal in the grand scheme of things. Or I take the money originally paid out and buy back the equity. Everything is simple.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
That scenario would be no different than if we, or any two, married or not, romantic or not, bought a separate place to live in. Many couples buy a property together. In fact most do. This is what most commenting here fail to even consider. They say "go buy a different place together" and sure, we could do that but the underlying risk that you and all are saying is still there, whether it is this or any other property, and whether we are married or not.
Hold on here. I am not making any judgments about your partnership. I prefaced my comments that way. I understand that you feel defensive because of the many posters focusing on your marital status instead of your question. But I am not doing that. So, please go back and really read what I wrote.
You are right in some regard, it IS no different. I mentioned the default scenario, as that IS an issue in ANY partnership structure, where the capital is in different forms. If 1 person comes in with cash, but the other is loaned, that provides an issue in the case of default because the entire asset would be collateralized. So, how will you save your interest in your half if it is foreclosed on?
This IS, however, different in that you are adding layers (as I mentioned) that complicate partnerships.
Look at the syndication model. This is a good one for comparison. A bunch of investors go in on a deal together with a syndicator managing the decisions (you will see why this person becomes an important role). The investment is held for 3 years (can be any length of time, but usually is a 3 year or 5 year average), and then sold. Of course if the market shifts, or the rents shift, there could be cause to sell sooner or later, but the point is that the syndicator decides, not the group of investors as they may all have different opinions about what to do. NOW, IF all but 1 investor came in with cash, and the 1 came in with a loan that tied up the property and then defaulted, it would put the other investors in a high risk position. You would NEVER get an investor to buy into that deal.
So, as an investor, I am telling you that what you are proposing has flaws that you need to consider.
The pink, blue and purple is great for when things are going well. However, you need a solution for when they don't (and let's hope you never have to use it). So, when you can answer the question, "What do I do if she defaults on the loan" to a satisfactory result, then you may be able to find a solution.
I am not being defensive, I am saying that in any partnership there is risk and needs to be some exit strategy. If I have to sell the place, it isn't a big deal in the grand scheme of things. Or I take the money originally paid out and buy back the equity. Everything is simple.
Both of those ideas are what YOU would do. What if your partner doesn't agree? What if the partnership sours (which can happen in ANY partnership) and your partner decides to stop paying the mortgage, but won't sign off on a sale? Spiteful people can do crazy things.
The solution may seem simple to you, but if you have an unwilling partner that you are REQUIRED to work with because they are on title, you may find your hands tied on a ship that is going down.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Cara Lonsdale:
Both of those ideas are what YOU would do. What if your partner doesn't agree? What if the partnership sours (which can happen in ANY partnership) and your partner decides to stop paying the mortgage, but won't sign off on a sale? Spiteful people can do crazy things.
The solution may seem simple to you, but if you have an unwilling partner that you are REQUIRED to work with because they are on title, you may find your hands tied on a ship that is going down.
Yes that scenario happens thousands of times every day in America between married couples. Sounds Risky.
- Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes8y
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
Both of those ideas are what YOU would do. What if your partner doesn't agree? What if the partnership sours (which can happen in ANY partnership) and your partner decides to stop paying the mortgage, but won't sign off on a sale? Spiteful people can do crazy things.
The solution may seem simple to you, but if you have an unwilling partner that you are REQUIRED to work with because they are on title, you may find your hands tied on a ship that is going down.
Yes that scenario happens thousands of times every day in America between married couples. Sounds Risky.
Okay. Now I get it. You don't want the advice of smart, experienced investors. You want to kick up dust over a social issue. I'm not interested in that. Best of luck to you.
- Investor · Wilmington, NC · Member since 2016 · 11 posts · 9 votes8y
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
If there is no difference, why put your cashflowing asset at risk? I say it that way because in one of your first posts you spoke to ownership rights in case it were to go bad - probably meaning that you feel the actual decisions (sell or re-buy out) would be yours....I know that's how I would feel. In this situation you are the only one with something to lose. Most of the posts here are trying to get that point across. AKA knowledgeable person says - the stove is hot don't touch it, right after, of course, the unknowing person has to see for themselves, throws a hand on the stove and gets burned. The difference is that you will be giving that decision making right away, unless you do a 51%-49% split, but good luck explaining that one - just like the prenup discussion.
I went through a similar situation with an ex (no marriage) of my own, we had been together for over 5 years, living together for 4 1/2 of those years, had everyone telling us that we should get married and all that mess, and thank God I did NOT listen to them and did NOT have her name on any of the documents or bills associated with the house...that conversation went over like a big, wet fart (Step Brothers (2/8) Movie Clip - Job Interview (2008) HD - YouTube) in church, but we still made it another 4 years.
My advise - take it as a grain of salt - set yourselves up for future success...make a clean transition into this new chapter of your lives together - find a new place to live aside from your rental property, keep your property rented and keep collecting that money - hell, use it to pay your portion of the new place. That way the new place will be yours together instead of the place that was yours, and now is ours. Leave that mess for when/if you are married. Worst case scenario - which should be considered because like you had alluded to - who knows if you, or her, decide one day - this isn't working, I want out...you still have something to fall back on. Hopefully it all works out and you don't have to go through any of it, but wouldn't it be a lot better to not have to go through the what is mine, what is yours with your free and clear property?
Hate to add this last part cause I don't know your entire situation, but since I don't know you from Adam, do consider what is the underlying reasoning behind her (I'm assuming from the OP) bringing this up? Hopefully she is the type that wants to pull her own weight, but in my experience this may be her subtle way of saying, we've been together for 4 years...time to either sh1t or get off the pot....but that is a decision to be made by y'all - get married or don't makes no difference to me. Make no mistakes this isn't a business decision, but a life decision. Best wishes on all of it!
PS - THE STOVE IS HOT!!!
- 8yDave FosterBusiness MemberQualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
Hey Moderators - How come I can't tag Dr. Phil here????
The 1031 Investor5137 Reviews - 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Scott Shuster:
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
If there is no difference, why put your cashflowing asset at risk? I say it that way because in one of your first posts you spoke to ownership rights in case it were to go bad - probably meaning that you feel the actual decisions (sell or re-buy out) would be yours....I know that's how I would feel. In this situation you are the only one with something to lose. Most of the posts here are trying to get that point across. AKA knowledgeable person says - the stove is hot don't touch it, right after, of course, the unknowing person has to see for themselves, throws a hand on the stove and gets burned. The difference is that you will be giving that decision making right away, unless you do a 51%-49% split, but good luck explaining that one - just like the prenup discussion.
I went through a similar situation with an ex (no marriage) of my own, we had been together for over 5 years, living together for 4 1/2 of those years, had everyone telling us that we should get married and all that mess, and thank God I did NOT listen to them and did NOT have her name on any of the documents or bills associated with the house...that conversation went over like a big, wet fart (Step Brothers (2/8) Movie Clip - Job Interview (2008) HD - YouTube) in church, but we still made it another 4 years.
My advise - take it as a grain of salt - set yourselves up for future success...make a clean transition into this new chapter of your lives together - find a new place to live aside from your rental property, keep your property rented and keep collecting that money - hell, use it to pay your portion of the new place. That way the new place will be yours together instead of the place that was yours, and now is ours. Leave that mess for when/if you are married. Worst case scenario - which should be considered because like you had alluded to - who knows if you, or her, decide one day - this isn't working, I want out...you still have something to fall back on. Hopefully it all works out and you don't have to go through any of it, but wouldn't it be a lot better to not have to go through the what is mine, what is yours with your free and clear property?
Hate to add this last part cause I don't know your entire situation, but since I don't know you from Adam, do consider what is the underlying reasoning behind her (I'm assuming from the OP) bringing this up? Hopefully she is the type that wants to pull her own weight, but in my experience this may be her subtle way of saying, we've been together for 4 years...time to either sh1t or get off the pot....but that is a decision to be made by y'all - get married or don't makes no difference to me. Make no mistakes this isn't a business decision, but a life decision. Best wishes on all of it!
PS - THE STOVE IS HOT!!!
My point is in the hypocrisy of so many on here that will gladly give advice to a young newly married couple to go into debt with a 3.5% down FHA with no true equity and if one person in the couple wants out, there is NO easy way. Neither can afford the payment without the other, and they don't have the equity to cash out and sell.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
Originally posted by @Cara Lonsdale:
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
Both of those ideas are what YOU would do. What if your partner doesn't agree? What if the partnership sours (which can happen in ANY partnership) and your partner decides to stop paying the mortgage, but won't sign off on a sale? Spiteful people can do crazy things.
The solution may seem simple to you, but if you have an unwilling partner that you are REQUIRED to work with because they are on title, you may find your hands tied on a ship that is going down.
Yes that scenario happens thousands of times every day in America between married couples. Sounds Risky.
Okay. Now I get it. You don't want the advice of smart, experienced investors. You want to kick up dust over a social issue. I'm not interested in that. Best of luck to you.
I got advice from Jay, a smart experienced investor. But your advice has a bias that I am simply pointing out. That's all. I am not trying to make it a social issue, just asking why the situation is different.
- 8yEric C.Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votesOP
The reason I find this so hypocritical from most of the responses, is I asked a tax and logistics question, and most tried to turn it into a risk of relationship ending question.
Never mind that we own other property together, or that she could just pay me the cash for half the property if I asked for it. She doesn't believe in dead equity, so she would rather finance her half, and let her other money work for her. Never mind that the house is a great house for us, but not necessarily a great rental due to dead equity and low COC returns. Never mind that if we bought a different house together, I would probably end up selling this one to get a higher return on my own money. Never mind that there isn't a ton of inventory of properties that fit certain things we both want in the place we live but that this property fits them.
If I would have gotten a bunch of questions about those things, I would not have been so defensive, but alas, everyone made assumptions about exit strategy in the event of the relationship souring.
Thanks @Jay Hinrichs for the TIC info.
- Investor · Wilmington, NC · Member since 2016 · 11 posts · 9 votes8y
Originally posted by @Eric C.:
Originally posted by @Scott Shuster:
Originally posted by @Eric C.:
Originally posted by @Cara Lonsdale:
If there is no difference, why put your cashflowing asset at risk? I say it that way because in one of your first posts you spoke to ownership rights in case it were to go bad - probably meaning that you feel the actual decisions (sell or re-buy out) would be yours....I know that's how I would feel. In this situation you are the only one with something to lose. Most of the posts here are trying to get that point across. AKA knowledgeable person says - the stove is hot don't touch it, right after, of course, the unknowing person has to see for themselves, throws a hand on the stove and gets burned. The difference is that you will be giving that decision making right away, unless you do a 51%-49% split, but good luck explaining that one - just like the prenup discussion.
I went through a similar situation with an ex (no marriage) of my own, we had been together for over 5 years, living together for 4 1/2 of those years, had everyone telling us that we should get married and all that mess, and thank God I did NOT listen to them and did NOT have her name on any of the documents or bills associated with the house...that conversation went over like a big, wet fart (Step Brothers (2/8) Movie Clip - Job Interview (2008) HD - YouTube) in church, but we still made it another 4 years.
My advise - take it as a grain of salt - set yourselves up for future success...make a clean transition into this new chapter of your lives together - find a new place to live aside from your rental property, keep your property rented and keep collecting that money - hell, use it to pay your portion of the new place. That way the new place will be yours together instead of the place that was yours, and now is ours. Leave that mess for when/if you are married. Worst case scenario - which should be considered because like you had alluded to - who knows if you, or her, decide one day - this isn't working, I want out...you still have something to fall back on. Hopefully it all works out and you don't have to go through any of it, but wouldn't it be a lot better to not have to go through the what is mine, what is yours with your free and clear property?
Hate to add this last part cause I don't know your entire situation, but since I don't know you from Adam, do consider what is the underlying reasoning behind her (I'm assuming from the OP) bringing this up? Hopefully she is the type that wants to pull her own weight, but in my experience this may be her subtle way of saying, we've been together for 4 years...time to either sh1t or get off the pot....but that is a decision to be made by y'all - get married or don't makes no difference to me. Make no mistakes this isn't a business decision, but a life decision. Best wishes on all of it!
PS - THE STOVE IS HOT!!!
My point is in the hypocrisy of so many on here that will gladly give advice to a young newly married couple to go into debt with a 3.5% down FHA with no true equity and if one person in the couple wants out, there is NO easy way. Neither can afford the payment without the other, and they don't have the equity to cash out and sell.
You hit the nail on the head....I'm not encouraging you to get married and go into debt yada yada yada - in fact I commend you for not...too many of my friends HAVE gotten married because it was the convenient, easy thing they were "supposed" to do. Only to decide it wasn't for them and now are in hell trying to pick up the pieces. Also have many friends that are in the situation you keep bringing up that are married and now hate their spouse, but with no good exit in view, and then throw the children into it to boot - and they're the one who suffer the most. Marraige should be something that you both WANT to do - it's the only chance it has to work!! Aside for a couple responses, no one here is advising you to get married...only to look out for yourself!!
Take the marriage portion out of it all...If you keep your house separate from a joint ownership, you have one less piece to put back together/fight about. If you get a new place together, that will be you guys starting equally (maybe, maybe not - % of down payment, portion of new mortgage payment, on and on) and from that point on, the chips will fall where they may, but YOUR property is intact - with you, where it started. However you got to the point of owning it free and clear, don't you think it best to keep it that way?
If you can't afford the new payment without them, that's fine...at least you can recognize that before hand, and can form your plan around it, exit strategy included. My advise either way - new place or your place, is to formalize that exit plan beforehand...written, and legally binding. So in case it does go bad, you have your ducks in a row already and there isn't anything to quibble over. Awkward conversation? Yes...but if you can't have that conversation, what chance do you two have on survival as a couple? Better to have the cards on the table.
You have something that MANY on this chat form wish to have - a free and clear property...this isn't a no big deal situation like you have mentioned it to be quite a few times. What if your area has a big upturn in value? Now your 150k house is worth 300k and you decide to split? Are you really ok with losing that much more? Or are you gonna wait it out for the sake of keeping the equity of your house that she has piggybacked onto? Either way you are giving away your right to make that final decision. And in the case that happens are you REALLY going to care what she wants or thinks is "fair". What happens when you don't think its fair?
Don't want to get into a new place? That's fine too, but what is her objection to paying you rent as her form of carrying her own weight? How is it any different than paying on a new mortgage or however you work things out selling her 50% of the decision making responsibility. You can "charge" her a under market rent and its a win win. If that money doesn't "matter", use it to fund some kick *** vacations.
IMHO - Like I said before, this has much less to do with the property than you think...
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