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Author Topic: Selling Equity share in a Co-Owned Rental Property  (Read 3679 times)

Offline Frappers01

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Selling Equity share in a Co-Owned Rental Property
« on: July 26, 2016, 01:39:39 pm »
I co-own an investment property in Fort Worth (7308 Willis Avenue) and am looking to sell my 1/3 ownership. I have a commercial loan in my name of approximately $34,000 and the appraisal on the property is $84,000. The other co-owners cannot take over the mortgage on the property to buy me out of my ownership. There is a property management company who oversees the house and a renters contract on the property until December 31, 2016. The rent is placed at $1,050. The property management company divides the rent between owners and handles the mortgage payment and home insurance payments. I am not sure how to go about selling my ownership and letting another investor take over the commercial loan from my name. The 1/3 ownership and mortgage also gives the investor an ability to pay off the mortgage to gain more equity in the house from the other co-owners. Any advice or investors interested would be greatly appreciated.

Thank you!

Offline Gold River

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Re: Selling Equity share in a Co-Owned Rental Property
« Reply #1 on: July 27, 2016, 03:21:24 am »
Hi,

     I take it you have a partnership agreement with the other fractional owners? Something in writing outlining the terms and conditions of the investment? If the property is appraised for $84,000 then each partners fractional share is $28,000 ?

Now if there is no operating agreement and you want out and they can't buy you out then you have the right to put the property for sale and sell it as your partners can not hold you hostage by law if you need out and there was no written agreement as to terms and conditions!

Now if the property is worth $84,000 and you are the sole signer and there is an underlying mortgage of $34,000 and then each party owns 1/3 each fractional interest then you already control over 50% of the properties value. Therefore you have the right to sell immediately!

I don't know how you have a commercial loan on a residential property? Unless your inferring you have a blanket loan and the portion covering this property is $34,000? But then you would be looking to sell off and pay back that apportionment to your lender provided you have a apportionment clause in your blanket loan?

Your ownership is not worth much without a written agreement? Otherwise your buddies have the ability to make a new investors life a living hell.

Now if your looking for $34,000 dollars then an investor might offer you $20,000 for your share because you want out now and an investor is looking for a premium to step in and take over the remaining terms! But no investor will do anything without an operating agreement and your partners have to let you sell the property if there is no operating agreement as I said before you can not legally be held hostage in an investment you want out of!

You need to explain more as I may not be completely understanding you or your question?


                            GR

 




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