Rental Property Investor · Richmond Virginia · Member since 2022 · 7 posts · 0 votes
Hoping for some advice about what to do with the home now that the divorce is final.
Background: The home was purchased in 2015 for $206k. I am only one on the deed, but as part of the divorce decree there is to be a 50/50 split of the home if sold, or each has an option to buy the other out. Currently principle balance is $177K ,with a Zestimate of $331K that I feel is high. IMO the realistic value is about $315K as is retail. New roof 2019, new HVAC 2020, but it needs carpet and paint and some TLC in a few other areas.
I'm finding it hard to look at this objectively. I don't want to sell the house, for sentimental reasons, and I don't know how i can afford to buy her out the way home prices are rising. She is basically renting the home back from me at breakeven, but that is well below area rents. I was thinking that a DSCR loan, based on the rents in that area, would be an option to buy her out. But since I technically already own the home in my personal name, I would have to do that in my LLC and I honestly don't know if that is an option legally. Lastly, my kids still live there with her. They are old enough to move if necessary, but I would prefer to avoid forcing them to do so prematurely. Lots to consider... afraid i'm too close to the situation to see things clearly
Laveen, AZ · Member since 2016 · 584 posts · 528 votes
4y
dang man, that's what sucks about marriage when people don't like each other anymore.
The challenge with having her in the home is whether or not a lender will allow you to consider her "rent" as income that can offset the mortgage. Without that it makes it harder for your to make other purchases.
If you guys go ahead and sell at least you each get your half of 138k (minus COS) to go buy something else.
If I understand correctly you want to keep the house and it be yours without her having ownership, but she and the kids still stay in it paying rent is that correct? If you qualify, can you afford to refinance, take cash out and give it to her getting her close to the buyout?