Littleton, CO · Member since 2016 · 14 posts · 2 votes
Hello all,
I have gotten a divorce and now have the following option with our SFH. My intent is to make the best financial decision for my future. What is the best way to utilize this property.
1. Sell the home and split 100k in equity and purchase a new SFH
2. Keep the home and buy her out of the loan and deed.
Looking for advise here and if any one has been in a similar situation.
Sell the property and use the $50K for a down payment on a duplex or a large SFH suitable for househacking. A lot of people start most successfully with househacking.
@Sam Levine There are so many small elements to consider. Go for a GOOD decision and move on. Whose name is on the loan? Is this a good time to sell a home in Littleton? Do you want to have any contact with your ex? (Shared ownership means talking now and then.) We did not have cash to buy each other out, but we traded equity ownership of our shared assets. I am in the process of refinancing properties in which we were both named on the note; the new loan will 'remove' his name from the loan and I keep ownership, per our divorce settlement. Another, I am selling because the inflated prices tell me so.
#1 is a clean break and allows you to figure out what investment makes the most sense for you. $50k would be a good down for a new primary residence. It would get you into something respectable if your talking about a lower down payment. That amount would get you 20% down on a nice condo / townhome as a primary residence.
You could still go after option #1 and house hack / BRRRR using that money and be able to get into a townhome or condo that you could work through. You are in a unique position where you're not necessarily tied to staying in a particular property for any extended period of time. You'll just need to make sure you keep your tax implications in mind.
If your intent on #2 is to have an investment property, the challenge might be getting enough out of the equity to buy her out and finance it. A traditional lender will want more money down on an investment property
I'd personally keep the home, rent out the property, and do a seller financing agreement on her equity to pay her a negotiated interest with term length. I'd then down 3.5%-10% depending on how much reserve you have to purchase a new SFH or 2-4 unit building.