Community Property Issues and Questions

2 Replies

I live in Washington, investing in Alabama and Ohio.  The fourplex I have under contract in Alabama was going well until they're telling me that they need my wife's signature as it's a community property state.  The title agent from Alabama said this is not needed, but the lender is saying it's needed to meet investor requirements, whatever that means.

My wife fully supports my real estate endeavors, but does NOT want to be involved.  We both work, and she wants her money in traditional investments, and allows me to do my real estate stuff.  

The funds to secure the loan are in MY name only.  The loan is to be in my name only.  The title and everything is also to be in my name only.  Can this be done in non-community property state?  The intent is to completely shield her godforbid I get sued.  If I fail and need to foreclose, I want her protected as well.  Can anyone give me insight as to this?

@Shiv Jey ,

Thank you for your interest in our market here in Alabama! I work primarily with out-of-state investors and I can say that I've closed numerous deals with investors without having/needing any type of info on spouses. I have had lenders tell us that we need a cosigner (such as the spouse)  in situations where my investors had too many "coals in the fire" so to speak which made the lenders feel uneasy. Interested to learn what area of Alabama you're looking into specifically?

As a lender in Washington State, also a community property state, I do these loans all the time. Its simple really. The loan is taken out in your name only, you are the only one on title. The only thing your wife needs to sign is a Quit Claim deed that removes any interest in the property that she may have or could claim. At that point she is as insulated as can be and your are the only person on the loan and title. 

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