Selling half a house to a significant other

[Eric C.]

Here is the situation.  My 4 yr girlfriend and I are moving back to an area where I own a house outright.  It is currently rented, and my intent if I kept it as a rental was to cash out the equity as it is worth about 150k.  We used to live there together several years ago.  She wants us to either buy a place together, or let her buy half the rental house and we live in it.  I thought about the idea of quit claiming her on deed and then letting her get a cash out refi as an owner occupant for her half which she would just give me.  Is that a feasible way to do the transaction?

[Charlie MacPherson]

@Eric C. I suppose you could reach a contractual deal where you're both on the deed, but why would you do that if you're not married to her?

If for whatever reason your relationship sours, you could have a nightmare on your hands.

[Eric C.]

Originally posted by @Charlie MacPherson:

@Eric C. I suppose you could reach a contractual deal where you're both on the deed, but why would you do that if you're not married to her?

If for whatever reason your relationship sours, you could have a nightmare on your hands.

 A marriage is certainly no way to guarantee that a relationship won't sour.  She doesn't want to pay rent, and I don't blame her there.  Our options are we buy a different place together, or I can sell her half of my current place.  I would then reinvest the proceeds to get a different rental property.

[Jay Hinrichs]

Originally posted by @Charlie MacPherson:

@Eric C. I suppose you could reach a contractual deal where you're both on the deed, but why would you do that if you're not married to her?

If for whatever reason your relationship sours, you could have a nightmare on your hands.

this is easily done its called Tennant in common .. or TIC for short..

you could have problems though with a lender just lending to a % owner of the property or one tic Trustor.

the loan can also be as to a certain % of the asset.. but that's usually someone like us that is a Private lender deal maker :) 

conventional banks you would want to check ahead of time to see if they will lend on TICS

this was quite common in San Francisco to get around rent control by the way.

and of course on the flip side on the lending side we do multi bene loans as a matter of course in states its legal in.

like in Oregon its ILLEGAL to do a multi bene loan .. Oregon for some reason wants to couch those as securities.. I learned that one the hard way LOL  after doing literally 1000 multi bene loans in CA...

But what you could do is just get your loan on the property now.. and then deed her an interest after the fact the loan is in your name and she takes title sub too.. your loan.. that works as well. and generally will not alienate the title.  

[Anne Smith]

I think the point of being married would be protection for you. If you get divorced, it goes thru the court and would provide a resolution on the house. If you arent married and split up, with both of you on the deed, you could be fighting over the house for years.

[Charlie MacPherson]

@Eric C. It's no guarantee that you'll stay together, but I'd guess that it increases the chances.  Without that relationship cemented into place, there's a lot lower bar to walking away.

Call me old fashioned.  My (sainted) wife and I are coming up on 39 years together.

[Eric C.]

@Charlie MacPherson

[Eric C.]

@Charlie MacPherson  Marriage does increase someone's likelihood of staying with someone that they resent and grow to despise with time, but feel obligated to stay with. I personally would rather have someone stay with me out of choice, not obligation. Apparently you would rather the opposite. It is quite possible your wife has wanted out for 38 yrs but due to moral or religious obligation, she stays with you. Or I could be wrong, but only your wife will EVER know.

On the topic at hand, I have no problem having something written up showing we each are 50% owners of the property, and if in the future we feel we would be happier not together, sell and divide. My question, of which you, Charlie, have been no help, is how to do that asset split now. How to sell her half the equity. 

[Aaron Hunt]

Originally posted by @Eric C.:

@Charlie MacPherson  Marriage does increase someone's likelihood of staying with someone that they resent and grow to despise with time, but feel obligated to stay with. I personally would rather have someone stay with me out of choice, not obligation. Apparently you would rather the opposite. It is quite possible your wife has wanted out for 38 yrs but due to moral or religious obligation, she stays with you. Or I could be wrong, but only your wife will EVER know.

On the topic at hand, I have no problem having something written up showing we each are 50% owners of the property, and if in the future we feel we would be happier not together, sell and divide. My question, of which you, Charlie, have been no help, is how to do that asset split now. How to sell her half the equity. 

This some suspect/millennial-ish if I've ever heard it.

So in summary: We have gotten to the point where OP is scrutinizing a 39-year-long marriage, and talking about feelings, choices and obligations, after asking internet strangers about selling HALF a house (what the actual F) to someone who could walk away whenever they feel like it just cause they find someone cooler than he? Triggered when there was a legitimate response which was more logical than the ridiculous question to begin with. She doesn't want to pay rent, but instead wants to buy a place together? Even if it means paying for half a property that you already own? Huh? We all know how this one is going to end...

*grabs popcorn*

[JingJing He]

I think you are asking for a quick and easy route to transfer half the interest to ur partner. That is a question for a lawyer and a tax accountant. I think people here tried to give you a reality check.

If the house is already rented out, why not just move in on a new place and clown then? Why make it complicated on the current rental when you want to reinvest in another place with what your girlfriend is paying you??

[Eric C.]

@Aaron Hunt  Don't scrutinize my relationship commitment and I will not point out hypocrisy when I see it.  If more than 50% of mortgages ended in foreclosure, would everyone advocate buying rather than renting?  There are plenty of unhappy longtime marriages where one or both parties are miserable but because they are "married" they stick it out.  

[Aaron Hunt]

Originally posted by @Eric C.:

@Aaron Hunt  Don't scrutinize my relationship commitment and I will not point out hypocrisy when I see it.  If more than 50% of mortgages ended in foreclosure, would everyone advocate buying rather than renting?  There are plenty of unhappy longtime marriages where one or both parties are miserable but because they are "married" they stick it out.  

So, you came on BP to ask how to mix RE/business with your relationship, and you don't want us to scrutinize one vs. the other? Oh, the hypocrisy or is it irony?

"Selling half a house to a significant other"

Why even mention that she is your girlfriend (very specifically, of 4 years)/significant other, or whatever [insert non-committal hipster terminology which doesn't fit the mold]?

You have no legal, religious, ethical, or moral obligation to her apparently and you can both walk away anytime. Sell the house and casually walk away as if you just sliced a loaf of bread in half. 

Just ask everyone here how to sell half a house to a complete stranger, because frankly it's the exact same thing (your words in a nutshell).

[Eric C.]

Originally posted by @Aaron Hunt:

Originally posted by @Eric C.:

@Aaron Hunt  Don't scrutinize my relationship commitment and I will not point out hypocrisy when I see it.  If more than 50% of mortgages ended in foreclosure, would everyone advocate buying rather than renting?  There are plenty of unhappy longtime marriages where one or both parties are miserable but because they are "married" they stick it out.  

So, you came on BP to ask how to mix RE/business with your relationship, and you don't want us to scrutinize one vs. the other? Oh, the hypocrisy or is it irony?

"Selling half a house to a significant other"

Why even mention that she is your girlfriend (very specifically, of 4 years)/significant other, or whatever [insert non-committal hipster terminology which doesn't fit the mold]?

You have no legal, religious, ethical, or moral obligation to her apparently and you can both walk away anytime. Sell the house and casually walk away as if you just sliced a loaf of bread in half. 

Just ask everyone here how to sell half a house to a complete stranger, because frankly it's the exact same thing (your words in a nutshell).

 This is some hilarious stuff here.  You need to work on reading comprehension.  

[Aaron Hunt]

Originally posted by @Eric C.:

Originally posted by @Aaron Hunt:

Originally posted by @Eric C.:

@Aaron Hunt  Don't scrutinize my relationship commitment and I will not point out hypocrisy when I see it.  If more than 50% of mortgages ended in foreclosure, would everyone advocate buying rather than renting?  There are plenty of unhappy longtime marriages where one or both parties are miserable but because they are "married" they stick it out.  

So, you came on BP to ask how to mix RE/business with your relationship, and you don't want us to scrutinize one vs. the other? Oh, the hypocrisy or is it irony?

"Selling half a house to a significant other"

Why even mention that she is your girlfriend (very specifically, of 4 years)/significant other, or whatever [insert non-committal hipster terminology which doesn't fit the mold]?

You have no legal, religious, ethical, or moral obligation to her apparently and you can both walk away anytime. Sell the house and casually walk away as if you just sliced a loaf of bread in half. 

Just ask everyone here how to sell half a house to a complete stranger, because frankly it's the exact same thing (your words in a nutshell).

 This is some hilarious stuff here.  You need to work on reading comprehension.  

Weak reply. Look at your title and get back to us.

[Thomas S.]

@Eric C.

Statistically you have about a 50% chance of losing. You are regrettably doing way so many starry eyed lovers do in mixing emotions with money. I have seen this too many times and it all too often turns out very, very bad.

Never mix pre marriage assets with post marriage assets. Tell your girl friend to invest in her own income property and then you will each have one of your own after a divorce.

[Aaron Hunt]

Originally posted by @Thomas S.:

@Eric C.

Statistically you have about a 50% chance of losing. You are regrettably doing way so many starry eyed lovers do in mixing emotions with money. I have seen this too many times and it all too often turns out very, very bad.

Never mix pre marriage assets with post marriage assets. Tell your girl friend to invest in her own income property and then you will each have one of your own after a divorce.

Please stop trying to adult with logic. Our OP gets offended by the thought of such unruly things.

Also, I don't think OP is considering marriage as being a reasonable option (see reference to commitment of dating for 4 years) because the majority of marriages are destined to fail, but business relationships with girlfriends of 4 whole years do not?

 I don't really know and I kind of give up cause it makes my head hurt.

[Eric C.]

Originally posted by @Thomas S.:

@Eric C.

Statistically you have about a 50% chance of losing. You are regrettably doing way so many starry eyed lovers do in mixing emotions with money. I have seen this too many times and it all too often turns out very, very bad.

Never mix pre marriage assets with post marriage assets. Tell your girl friend to invest in her own income property and then you will each have one of your own after a divorce.

 Hence the reason for doing it above board in a true equity split.  She doesn't want to live in my house for free so she offered to buy half the equity and have everything documented.    I find it funny that people are willing to do equity splits with strangers, business partners or family but not in a relationship.  I thought BP responses would be more helpful, but alas, it is just an internet forum.  

[Eric C.]

 You are clueless in that a marriage would not change the circumstances.  I am not offended in any by random comments on the internet by people that don't understand the situation.  But thanks for checking in.  Please check out if you have nothing else to add.

[Carol C.]

@Eric C. - going back to your original question - I am presuming she doesn't have the savings to buy-in for half the pre-owned property. In that case, I'd look to buy something together and leave your already owned property out of it. I would also buy it as a C Corp, with shares divided based on how much each can contribute. My then boyfriend and I bought a 2 family in Queens, NY that way. I had the good paying job and savings, he had the construction background, contacts and savvy. It's very important to keep it a business transaction. The C Corp really cements that point. Best of Luck. Carol

[Jay Hinrichs]

@Eric C.   geez I answered this question .... what I laid out is absolutely the ONLY route to legally do this.. next question.. ???

[Eric C.]

Originally posted by @Jay Hinrichs:

@Eric C.   geez I answered this question .... what I laid out is absolutely the ONLY route to legally do this.. next question.. ???

My question was more if we were TIC, would we both be on the loan (I don't care either way honestly) or just her, and would I have a taxable event for selling the equity? But what you had laid out is pretty much what I envisioned.

Thanks for your insight.

[Aaron Hunt]

A dating couple is more likely to "split up" and end their relationship (business and personal) than any of those you mentioned above. Not that funny.

Are you saying you are a statistical exception because you have been in a relationship of 4 years? Is that what is changing the circumstance here? If marriage does not, then why would dating? 

You said it first in your title and again later, but it sounds like the question you meant to ask is how to split equity with anyone (and you did receive your answer).

[Steve B.]

Is this the same guy from the post last week who knew everything because “he read a book”?

[Eric C.]

Originally posted by @Steve B.:

Is this the same guy from the post last week who knew everything because “he read a book”?

 Definitely not the OP, but possibly one of the  people commenting.

[Derrick E.]

This is comical. Any logical person would say you are crazy if you sell "half a house" (I agree what the actual F) to a girlfriend.

There's a reason she is still your girlfriend and not your wife. I would say absolutely do NOT let her have part of the house. If anything go buy a new one together like others have suggested. Also if you ever decide to actually commit to one another and get married then I also recommend getting a pre-nup and keep that house for yourself. 

[Eric C.]

Originally posted by @Aaron Hunt:

A dating couple is more likely to "split up" and end their relationship (business and personal) than any of those you mentioned above. Not that funny.

Are you saying you are a statistical exception because you have been in a relationship of 4 years? Is that what is changing the circumstance here? If marriage does not, then why would dating? 

You said it first in your title and again later, but it sounds like the question you meant to ask is how to split equity with anyone (and you did receive your answer).

 So because we decide to treat our living and living expenses as if it were an equity split in a business, you feel the need to be a jerk.  Nice form.