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What would you do? Good problem to have...

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fraeuken posted 4/6/2013 19:13 PM

We are in the final stages of our Marital Settlement Agreement and STBXH is very eager to get rid of me so now I have two options on how to settle on a 50 acre property and he has committed to agree to whatever I choose.

Option A:
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Property is valued at 1.3 million. Retain 50% of property and assume loan of 200K+ which I solely pay in lieu of an employer loan he solely pays. Be responsible for 50% of outstanding bills at 50K, 50% of real estate tax and future cost of improvements (utilities still need to be put in, estimated at about another 20K). Take tax implications upon sale of properties as well as cost for partial release under conditions of loan. Have to assume 50% of private loan of over 300K made into property without my knowledge or risk to be sued by said private parties in the future. Will be tied to STBXH under partnership agreement for undetermined length of time.

Option B:
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Transfer property to STBXH upon him meeting all obligations he agrees to in MSA. In return he assumes all outstanding and future bills/cost of the property and he reimburses me for all joined payments made after official separation in October, about 20K. Assumes loan payment which gives me an extra 2K per month right away. Releases me of all responsibility for private loan. Pays me 250K taxfree over the course of three years upon which property is fully transferred. No financial ties with STBXH beyond the time period in which he pays the 250K.

I am very ready to choose option B. Yes, I might miss out on appreciation in the property but I am not one to count my chickens before they hatch. Not having to pay the loan for the next 5 years and having 250K taxfree in the bank in 3 years and being free of his control seems such a sweet deal.

And I can do good with the money. I know I can pay my kids education since I have to worry about college cost 2 years from now and work with it to secure a small house for me and my children.

I know many here struggle with their day to day finances. I am in the very happy position not to have to deal with this. But I did put 18 years of hard work into this, put my inheritence into it and did forgo many things so we could afford buying and developing this property.

What would you do? Hold on and deal with it or let go and move on?

Griefstricken25 posted 4/6/2013 19:26 PM

I'd choose B.

Dreamboat posted 4/6/2013 19:38 PM

Before you choose option B make sure that You can get your name removed from the private loan. Otherwise, they may still be able to come after you ifhe does not pay. And it will also affect your credit.

If that is all good, then I would choose Option B and just wash your hands of the guy. And good riddance!!

tesla posted 4/6/2013 21:47 PM

B is pretty tempting. You can do good with that money and as long as you are free and clear...it would probably be nice to be free of the hassle.

But...if you can afford the costs of A...you do look to be making an excellent profit. More hassle, yes. How much risk is tied to that financial security of 1.3 million? KWIM?

It is a very good problem to have.

caregiver9000 posted 4/6/2013 22:23 PM

B. 50% of nothing if he defaults? continued ties to him and the worry of month to month follow up that he'll pay and file and do the right thing??

B. And be done. My opinion.

peridot posted 4/6/2013 23:42 PM

I would choose B. Make sure your name is off any loans though. You already think he's committed fraud or some shady deals. I would do every thing you could to remove yourself from being joint on any thing with him.

[This message edited by peridot at 12:57 AM, April 7th (Sunday)]

Nature_Girl posted 4/7/2013 00:44 AM

B. B. B. B. B.

stronger08 posted 4/7/2013 01:44 AM

Before you make any decisions run the numbers past an accountant. Have him create a detailed risk vs reward scenario for both options. Have him/her take everything into consideration including tax buren, appreciation, cost of carrying the loan etc. Sometimes what looks like a good option turns out to be a bad move. And while I understand you want to wrap this up as quickly as possible. Dont bite yourself in the ass by rushing things. With all things considered a couple more months of negotiations pales in comparison to getting the shaft in a hasty process.

fraeuken posted 4/7/2013 02:17 AM

Thank you guys, I have considered having an accountant look at it to make sure that I can back up my gut feeling of how I want to go with numbers.

I also talked to the real estate agent today. She believes that my STBXH is unrealistic in the property evaluation and that some of the lots are priced of up to 30% too high. She said she has tried to tell him but he won't budge. Also talked to our bank; they did evaluate the entire property for the loan also at about 30% less than STBXH thinks it is worth based on past estimates. My FIL, who is major real estate developer and has broken with his son has shown me comparable sales as well and pointed out a lot of open issues with the property that will cost money going forward. Reality is, comparable lots have been selling in the area for around 80K a piece, at our pricing of up to 100K per lot we have only had one offer in the year they have been on the market and not sold any lot yet.


There is certainly an opportunity cost that I need to take into consideration. I would certainly miss out on future appreciation.

My main concern is that STBXH is completely volatile. He went from wanting to simplify his life to trying to buy a 700K property with sparkly panties to telling kids he will buy and live on a houseboat, to telling everybody he is broke but then going on a 10 day trip to the Four Seasons in the Maldives to recently showing DD a piece of land he will build on to buying a house in one of the most expensive counties in the country to renting a place somewhere - all that within less than 6 months of separation and with a credit score that barely scratches 600. I think he has totally lost it...

His volatility and his shady deals are my biggest concern. He might stall on selling or he might want to sell quickly to support his new life with sparkly panties since he has to keep up the charade of being that wealthy loverboy; I will never be able to anticipate his next move because he changes his mind every day. And who knows, if he gets really desperate he might occur more debt against the property and I might be screwed. I just don't trust him and his business decisions any longer.

Once I am fully settled with him on our multiple properties I would walk away with over 300K, more than 700K in loans and mortgages removed from my name and social security number, a separate lot free and clear in my name, 2 cars free and clear, my salary, my 401K, my IRA, him signing away all rights to alimony, my stock portfolio and 50% of our rental properties which are already managed under a partnership agreement.

Coraline posted 4/7/2013 04:29 AM

How will your name be removed from all loans if his credit score is that low? Will he really be approved to assume the full loan amounts on his own, or is there some other way that will work out?

SeanFLA posted 4/7/2013 08:38 AM

I'm a liitle old school and believe "a bird in the hand..."

I took all the cash upfront and eliminated ant debt obligations I could exiting this relationship. You can't trust him in the marriage don't trust him with any future investment decisions. I'm a real estate broker so I deal with many people who make these types of property decisions all day long. I would go with your FIL's advice on what it's worth. Nothing has sold? That's a huge red flag on being overvalued. There is so much undeveloped property sitting idle out there right now everywhere. If he's somehow willing to settle with you for 30% above what it's realitically worth, I would take that and run all day with it. Pay cash for your home and your kid's education and sleep soundly at night. The piece of mind is worth it.

fraeuken posted 4/7/2013 11:39 AM

Seanfla, thanks. Yes, 13 lots have been up for sale since spring 2012, we had one low ball offer and just another offer around the price for which other lots go for in the area which was about 20k less than what our lot was prices at.

As for getting me off the loans: as per our MSA he would have a certain time period after the final divorce decree to take me off. If he fails to meet his obligation the properties go under jurisdiction of the court and will be sold. We would have to satisfy the loans first and then distribute what is left based on the formula stipulated in the settlement agreement. Chances are that I would get less under this scenario.

fraeuken posted 4/7/2013 11:39 AM

Seanfla, thanks. Yes, 13 lots have been up for sale since spring 2012, we had one low ball offer and just another offer around the price for which other lots go for in the area which was about 20k less than what our lot was prices at.

As for getting me off the loans: as per our MSA he would have a certain time period after the final divorce decree to take me off. If he fails to meet his obligation the properties go under jurisdiction of the court and will be sold. We would have to satisfy the loans first and then distribute what is left based on the formula stipulated in the settlement agreement. Chances are that I would get less under this scenario.

SeanFLA posted 4/8/2013 18:24 PM

Yeah people sometimes make real estate way more complicated than it has to be.

There's an old saying...there are only two things which effect the sale of real estate; price and location. Everything else goes back to those two items.

You can't change the location...so which should we adjust?

TrustGone posted 4/9/2013 08:14 AM

I would take option B. This way you no longer have to deal with him and his sparkly panties OW (I just love that name )

stretch13 posted 4/9/2013 11:25 AM

a totally uneducated opinion:

take the cash and run. don't wait around to see how he could screw you out of some or all of your money. agreements aside, chasing a broke guy through the courts doesn't result in much cash back. take it now, let him assume the loans by himself...as long as that provision that he must sell if he doesn't get you off the loans is in place.

i paid for a joint bankruptcy for XH and i just before our D. i did that because i knew even if the decree said he owed the money, the creditors would come after me and force me to declare bankruptcy anyway, or i'd have to sue him trying to squeeze blood from a stone. meanwhile my credit would tank worse than if i declared. there is such a huge disconnect between consumer law and obligations vs what's in your agreement and who is obligated to pay for what.

[This message edited by stretch13 at 11:26 AM, April 9th (Tuesday)]

npain posted 4/9/2013 11:55 AM

Definitely take the money and run. If you cannot trust them in the marriage, you cannot trust them outside of it either. At least you know what you will have and can work from here. Besides, real estate is SOO volatile now...

Crescita posted 4/9/2013 12:32 PM

I see no advantage in option A. Just curious, how set in stone are the numbers in option B? If he thinks the property is worth more than it is, why only $250k to buy you out? The remaining loans are only $500k, so assuming it is worth $1.3 mil, the remaining $800k is what you put into it as a couple. He should pay you $400k. I'd push for at least $300k.

phillygirl posted 4/9/2013 13:14 PM

B - All day.

I agree with the others, a bird in hand and all, especially when dealing with someone flakier than a fresh baked croissant.

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