Property being sold as seller financing during divorce?

Question

Good Afternoon All,

I have a property which I'm trying to acquire, but the owner is in a little of mess. Wondering if I could get some guidance on how to go about this situation.

The seller has a property that he is trying to get rid of because he is going through a divorce and can no longer pay the mortgage on this property. He is the only person on title but of course in the State of Florida when you are married, the significant other is owed 50% of everything that is owned between the two of them. I want to come in and obtain this property through a seller financing strategy to basically buy the property from him, rehab the property, and sell the property for the top ARV value. I would like some guidance on how to approach this. He is very desperate to get rid of this property but me coming in on the sidelines with no knowledge of the divorce, want to make sure I'm doing everything in my power to make sure I'm protected in this deal.

I was thinking about structuring a deal as follows:

he owes the 1st mortgage $211k

I was going to go in and give him $5k entry fee at the sale price of $235k.

I need about 5-6 months to rehab the property, list it, and sell it off for the projected 375k.

any guidance on how to structure this would be highly appreciated as I want to make sure that when this property sells he is only entitled to the $235k price, which $211 will be going to the mortgage pay off and remaining in his/and his future ex wife pocket.

I would make sure I would be the only one entitled to the difference of the 375/235 price because again he is going through a divorce and don't want to get into a mess where the significant other is trying to gain profits from that sale price. let me know if anyone has any guidance!! thank you all!

Adam Bartomeo · Answer

Before you do anything you have to make sure that the wife is on board. I almost GARUNTEE that she will not want to do seller financing. When people go through a divorce they want EVERYTHING to be finalized, not to have to deal with a seller financing deal with their ex. They will both want to get rid of the house but sometimes they will use it as leverage during the divorce and not sell. The best option for everyone is to buy it cash for under market value with a quick close. They get out quickly without a mess and you get a house with equity.

Hamp Lee III · Answer

That juice may not be worth the squeeze.

Caroline Gerardo · Answer

Go look online and see if divorce is filed and the date. This gives you an idea how far along they really are. A divorce uncontested can take about five months and a fight a year or two.

What assets do they both have and minor children? Jobs? Who is bread earner? I ask because the larger the assets $$ the more the attorneys are motivated to make them fight. If children there is child support and she may lien the house.

Ask him for the mortgage bill. Is it paid current? If in arrears it's not assumable, if conventional also not assumable. This doesn't tell you if there are other liens. Open a preliminary title report to see if she filed on the house yet?

What would motivate them both to not just sell open market and get $235000 now and be done with it? Why would they wait?

Do you have comps for $375000 as in sold with a loan last three months same same everything?

$140000 is a deep discount and they both probably know the market value fixed up.

You may need her signatures on the purchase contract and her attorney is going to hold that up, how will you deal with this?

Property being sold as seller financing during divorce?

3 Replies