Alright, very exciting stuff.
I flipped a house last year, and during the sale put it up on AirBNB hoping for a bit of cashflow during the sale. The property did excellent, and a buyer fell through. My long time girlfriend at the time suggested her purchasing the property for below asking price, renting the property as a vacation rental, and splitting the profits. I did some numbers, followed through with that, I paid her closing costs, and I still profited on the flip. Seemed like a win win.
She also had invested money with me on another multifamily deal which has yet to be finished. 20k to be exact.
The important part of the outline we had for the deal was:
1-We would Split all equity 50/50 after the following:
2-Her 20k returned with agreed return if not already paid by the other deal.
3-My 20k reduction in PP on property paid back upon sale.
Despite in my opinion, the Air BNB being a business, and that should remain separate, and all terms the same rather we are together or not, she just wants the property out of her name, and for me to have full responsibility, ownership, and to have as little as possible, or nothing to do with the property.
There are conventional ways to do things that are perfect, and there are non conventional ways to do things that if done properly have a very high rate of success.
The loan is an FHA loan that I do not qualify for on my own at the moment, but may qualify for in 6-12 months.
So far, title has offered me the option of a quitclaim deed into my name and I will take responsibility of the mortgage and the entire ownership of the property. If I default, the property goes back to her, and I lose all. I'm looking to create a note between her and I with specifics with payments to the current property mortgage. If possible, to make her feel more secure include something regarding paying back her 20k within a certain time period or the property goes back to her as well. Maybe a 20k balloon within a time period. Then, in one or two years go and sell or refi the property to pay off her mortgage and heave the property completely in my name.
Another interesting RE situation that I'm sure has a solution.
Yeah, you can take it subject to and do an agreement like title suggested or you can potentially have her do a wrap for you.
@Brett Goldsmith Great. In that case, I'm looking for the best way to make payments for the mortgage in a way that she will no longer be involved, and the bank holding the loan will not be notified nor have any suspicions that the property was quitclaim deeded into another name.
Maybe it's as easy as move the autopay to a new bank account owned by me, but I am worried that due to a business entity name or my personal name being on the account instead of hers, that it could alert the bank and possibly move them to look into it.
Another option may be to keep the mortgage payments coming from her account and my company or myself just deposits every month the agreed upon amount. Making sure to keep record of payments on my end as proof I'm making the payments in the event any unforeseen circumstances arise in the future.
Aside from that, I'm assuming I could get a standard note online and include the specific terms, payments, interest, and or balloon correct?
bump. I realize most people are not attorney's and cannot give legal advice, but real estate is vast and the options are usually endless. Any pointers would be appreciated.
@Christopher Dunson A due on sale clause is always a possibility to be triggered. Technically anyone who transfers a property into a LLC from their individual name runs this risk. From what I've found large lenders are typically happy as long as you are paying them.
Make sure you get a specific POA for her on the property. Also, you want to ensure that you have exactly what you need to sell the home on the backend if you need to. You may need an uninsured deed affidavit if you start notarizing deeds outside of escrow.