A friend's divorce mediation and a townhouse involved

[Pete Resendez]

My friend unfortunately is going through a divorce and her mediation is happening soon. I'm a little out of the real estate learning and trying to get back into again. Is there a way to transfer the loan agreement to my name or try some owner financing/selling strategy? I'm still trying to get more info out the situation and what may be given or under her name. Does she or I call the bank to see if it's possible to transfer? If so, can you transfer without refinancing?? Very nice suburb area outside of Dallas and I'm very much ready to get in the real estate game! Looking for any help! Much appreciated!

[Bruce Lynn]

@Pete Resendez   What are you trying to accomplish?

Lots of attorneys screw this stuff up.  Either I think they don't know what they're doing.  They do know and want something in place you will have to go back to them to fix, or they're doing their best to go with the client's unrealistic wishes and don't have the guts to tell them that won't work.

After dealing with plenty of these, I will tell you what I see works best.  RESOLVE this issue NOW and make a clean break.  If your firend wants to stay in the place AND has the funds/income to do so, they need to refinance in their name ASAP (as part of the process), not 5 yeas from now, not if they remarry, not 10years from now.   They do not want the other person's name on the deed or the mortgage once the dirvorce is finalized.   Way way too often Mrs. wants to stay, but realistically can't afford to stay with one income....and it is just a downhill disaster finacially the longer they stay.   They also get all the emotional baggage that goes along with it.   If they can afford to stay, chances are they need to refinance and get the X name off the loan.   This will be costly in today's market and interest rates, but might be worth a shot if they can afford to stay.

If they don't want to stay and you want the the townhome to rent to someone else and just want to assume the loan, well then she can call the lender and see if the loan is assumable.  Most aren't assumable, but some are, so worth a check.  Do NOT do this if she wants to stay.   Chances are this is NO deal property as the X will want their fair share and a fair market appraisal will need to be done and the equity split equally.   Occasionally if they have other assets maybe she can keep the equity of the house and he gets to keep his full 401k or something like that.   In that case she will still need to refinance on her own credit.

I would not suggest Sub2 in this case. These things never seem to work out well 10 years later when you need them to sign stuff. Blood gets thick and the worst part is 10 years later there are new voices in their ears, telling them all kind of crap and filling it with all kinds of ideas. People move, people get busy, people have remorse, people get new SPOUSES, and very very rare is the X that is 100% cooperative and willing to sign anything that gets put in front of them. They start making demands and often unresaonable demands, and they delay and never want to sign on the day you need them to sign. In the really bad cases they disappear to another country and try getting them to sign stuff at an Embassy abroad. This triples your headache.

BE the voice of REASON to your friend.  Maybe sit down with her and look at the finances for her and if it makes sense for her to buy the X out and refinance if that is even possible.  Better yet, encourage her to make a clean break....perfect time for a fresh start.

Also townhomes are rarely a good investment vehicle. There are some exceptions, but the HOA dues normally kill your returns and there are all kinds of other issues having tenants living close together. Rules to follow etc. Invest your money in a better deal. Plenty out there.