Crazy motivated seller situation, difficult structuring the deal.

8 Replies

So, I've got a seller who has had an ongoing divorce for ~5 years. He has 2 properties that he used to rent out a couple years ago, but quit as the additional income would relinquish his benefits for his children.


The thing is, the sale of these houses would have the same impact. They are adjourning properties, one is way, way over assessed. I'm telling you as a local that the property is worth no more than 75,000 in it's current condition yet it is being assessed for ~$100,000 due to it generating rental income in the last 3 years. Whenever he sells the house, he has been told by legal professionals that he will lose the difference of the assessed value from the sale price. So if it's at $100,000, and he accepts an offer at $60,000, he would be out on $40,000 in support.

He is currently eating the fact that he has to upkeep the property while at the same time pay for the property taxes. He has outstanding mortgages on both properties, so I thought about structuring a sub-to deal as I thought that the mortgage being paid would show as income that he doesn't have, while at the same time he's not the one actually making the payment so that he can receive the benefits, but that won't work as it would show that he isn't actually making the payment, but rather somebody else is.

I really want to allow for this person to benefit from this transaction, but I am struggling to find a method where he could. Maybe something with a trust? I don't know. I want to help him get out of this bizarre situation and the idea of "I can't" is really mentally straining to me. I want to solve it so bad I don't care if I even get income from it. Can anybody brainstorm with me on this one? 


Originally posted by @Michael Ablan :

@Carson Leonard - I think you're confusing assessment and appraisal

A property's assessment has nothing to do with its current appraised value

No, it is assessed for that value. This is going off of county records, as well. He even agrees that it is way too over assessed and believes it is because it has generated income in the last few years. 

Hey everyone, I appreciate all the responses. I had a misunderstanding to the problem as my experience with divorce was practically none, essentially the court was trying to split everything they had, and the judge took the ZESTIMATE + the rental income for the house and that's what she assessed it as. The property is livable but clearly needs repairs, and she didn't account for expenses from the income either. Just slapped the monthly rent times 12 on top of it. He got the 2 over assessed properties, she received cash, but since the 2 properties are "equal" in what the court assesses the value at to the amount of money she received, it is technically fair.

Now, I was going to try to do a sub-to deal after I cleared my understanding of it and wanted to pay him a good % of his equity on-top however he said that this situation will only be for a couple months and he wants to be a landlord again whenever it is over. Dead deal, but definitely a good learning experience!

Maybe I'm misunderstanding your question.

The divorce stipulates a distribution of income/assets. You are looking for a way to help your "seller" hide those assets to financially benefit rather than abide by the divorce agreement. Is that about right?

I think they should do what the divorce agreement stipulates and stop trying to play games. Children will benefit more from a parent teaching them right vs. wrong than they will from a few extra dollars.

Originally posted by @Carson Leonard :

Hey everyone, I appreciate all the responses. I had a misunderstanding to the problem as my experience with divorce was practically none, essentially the court was trying to split everything they had, and the judge took the ZESTIMATE + the rental income for the house and that's what she assessed it as. The property is livable but clearly needs repairs, and she didn't account for expenses from the income either. Just slapped the monthly rent times 12 on top of it. He got the 2 over assessed properties, she received cash, but since the 2 properties are "equal" in what the court assesses the value at to the amount of money she received, it is technically fair.

Now, I was going to try to do a sub-to deal after I cleared my understanding of it and wanted to pay him a good % of his equity on-top however he said that this situation will only be for a couple months and he wants to be a landlord again whenever it is over. Dead deal, but definitely a good learning experience!

 Follow-up if you haven't