Hello all ,
I have my first deal on the line here. here goes.

Brand new construction home. Needs to close by Dec 18
Owner built as a spec home. but is now in process of divorce and all his money is tied up.

House is in gated golf community will sell for 400k

375k for a fast sale.

Total purchase price for owner = 255k
Owner put down 50K
needs 200-210 k to close

Owner cant close because of divorce and just wants someone to come up with the 200 to 210 k so he can close on the property and then sell it.
if not he loses everythinh he has in it.
Owner wants someone to just partner up with him close on the house and split the profits after it sells.

there is approx 100k equity in the deal which will come out to about 30 - 40 k for me after costs and the profits are split. he suggested a 35/65 or a 40/60 split
which i think is well worth it considering there were no costs to get this client and no costs to sell

I do not have to handle the sale he will do it.
He just wants to save his investment basically because he has only 2 weeks left and cant close on it himself.

Basicallt I will have to go to close with 200- 210 k close on the house.
and split the profits when he sells.

need any more info?

ok well how should I structure this?
I was thinking of using a hard money lender, and getting a mortgage on the house and paying it off and keeping my profit when it sells?

anyone else have any suggestions or ideas on how to structure this?
This is a time sensitive issue so any help would be appreciated.
Thanks in advance

He’s put down $55K and he wants you to come with the remaining $200-210K? Then he only wants to provide a 40/60 split?

If it were me, I would want a payout that is commensurate with the percentage I am putting in…around 80% in this scenario. If it sells for $400K…that’s $145K over the $255 needed to purchase it. I would want 80% of that $145K…otherwise I would walk away. But I’m new to tihs thing too. It just seems that he is asking a lot from you, for not as much in return.

If he doesn’t purchase he loses his $55K, right? Well…if that’s the case, maybe he would be willing to change the split to save his initial $55K.

That’s my $.02

initally i thought that too but upon further investigation I found out that well
sonce the house is worth 400k and I am bringing in about 210 k than that is about half the value of the house

so his half is mostly equity. i was thinking of asking for a 50/50 spread since thats more along the lines. of how our contribution is.

I dont want to get greedy as I am just starting also and I am more interested in just helping this man out than making a huge profit. anyone else have any ideas as to make this deal happen ?

Well…I don’t consider it being greedy. You seem to be HELPING him out of a serious jam here. If he can’t come up with the money, he loses his $55K? Right?

As far as this transaction goes…he only put in $55K…his “equity” to this point is imaginary (until the property sells).

If I am putting up tangible money, I want a return that is commensurate to that. If I am putting in 80% to his 20%, I want 80% out…that is what I would feel I am owed due to the risk involved for me to put up the money in the first place.

You can do what you want…but I think you know what I would do here. If you want to be nice (and offer him something like a finder’s fee for bringin you the opportunity) you can offer him 30%. But beyond that, I would walk away.


     So let me ask you this In the post it clearly said he paid 50k down.. And then I read they are going to borrow 210k From A HML (Hard Money lender) I honestly think that 50% of the profits for you to go get A loan is a darn good split. If it was CASH of yours at that time I would pay him 55k for his 50k and kick him out of the deal and then pay 210k from my account and then resell it and make all the profit but at that time there is a need for a HML so there is no need to get greedy as there is no money from Trupah coming out of his/her account! So this is like FREE MONEY!

I can see your point, no doubt. But look at it from the other side as well. I think this partner he is working with is still making out with good money at 30%.

Don’t get me wrong, 50% of any money is a good thing. I am not trying to be greedy…I just think it is asking a lot to put up the vast majority of the money to control the property, then only offer back a 60/40 split initially. I may even do it if the 60 was my end, not his.

It just sounds like the partner here is looking for a bail-out, but not really giving as much in return as I feel he should, considering that he is NOT putting in most of the money.

That’s just how I feel about it. As always, if it’s ggod for you, take it.

At this point, it’s the owner’s property to sell, or to lose. So going by Bedley’s guidelines, the owner would probably tell you things that I can’t type out here and never speak to you again. Bedley would lose out on $30-40K of profit because of greed. In my lectures, greed is one of three main reasons for failure in this business.

(Nothing personal Bedley, just opinion)

There are several possible ways to make this deal work to make a win-win for all parties.

I’d personally want a 50/50 split, but again, no reason to be greedy IF the deal will work.

Here’s the breakdown, as I see it, Bedley. Trupah is NOT putting up the money. The HML or lender is putting up the money. Trupah is putting up his good name/credit (unless it’s an HML, then the property is the only thing at risk, really). Pretty good profit for nothing!

Trupah, the only other thing that I’d recommend is that you control the deal, not the owner/seller. I’d control it through the closing, then split the profits. I would NOT leave it up to him to sell, etc.


Thanks for the responses all
We negotiated a 45/55 split on profits after all expenses are paid.
We will meet with his lawyer to do paperwork tuesday.
I think i will be safe because the loan will be about a 53% LTV in first position in my name

When all is said and done we should make 90 -100 k on the deal of which I get 45%

all for just being a nice guy… (and being in the right place at the right time)

its worth it to me… also This is my first deal I am no Behemoth such as Bedley just kidding…

I will keep you all posted as this deal progresses…

any more input would be greatly appreciated.


make sure this is reviewed by a real estate atty; if there is soon to be an ex spouse, they may very well have a legal interest in this property, even if they never involved a cent of their own cash. you could see your interest lost to the ex.

WOW nice point
I think we have it covered tell me if we dont,
well when we clos basically I will be buying a 400k house for 215k
so he didnt make any money with me so far?

then we sell the house and pay the costs and then finally split whats left.

so he flips to me when they get the CO an I sell to end buyer when we find one and everyone walks away happy

we also are probably gonna sell it 20k below market for a fast sale…

so the ex wont get anything… am I right???

Don’t know. That’s why it is important to have the attorney review the deal with ALL the facts! Don’t let your new partner try to hide anything from you, or from the attorney.

One of the worst things that can happen in a divorce situation is where a spouse is trying to conceal a sale where they will be making money off of a joint ownership. You do NOT want to be dragged into that situation.


Raj is ABSOLUTELY right, they already can’t get along why would they play nice with money. I would never enter into this without any atty. As a Realtor, I have seen buyers messed over due to a former spouse of seller, that no one but the seller knew about, and had not disclosed. They had been divorced 15 y, but the ex an interest in property due to community property laws in tx.

OK all here goes so far…

The contract he has with the builder is under his brothers name to which he has power of attorney over.
So the wife is out of the picture on this one…

We got an attorney and just met with him today.

This is how its going down…

We are going to assign the contract to an LLC.
We are going to close under the LLC.
I am going to pay holding costs until it sells.
There will be a first mortgage on the property for about 210 to 215k and thats it.
Comps support a sale price of 380k to 410K
I will pay holding costs. Mortgage, Taxes, Insurance, the association fees and utilities… until the property sells.

After it sells we will pay off the mortgage, agent commissions, and pay any other costs to sell the property

he will then take back his initial 55k he put down
and I will take back all the money I paid to hold the property.

Whatever is left over after all that will be split 60% his way and 40% my way.

I should walk away with an easy 20-30 k on this one…

The attorney is currently drawing up the documents and forming an LLC for us.

So tell me all how am I doing so far?..

remember this is only my first deal but it seems like I jumped in to something a little more complex than I should have for a first deal but oh well
now I dont even want to do little deals I want to go straight to high dollar stuff since thats where i am starting…

when you have a truly motivated seller on your hands it is a little easier to get things done ya know what i mean…


thanks in advance…

Only thing that concerns me is that you have to pay all expenses and then you only get 40% when it was 50%. I hope they didnt bully you. So You set up an LLc with the seller, do you even know him? Who is paying attorney fees. What happens to LLC after the sale. Other than those strings i have to say good job you found a motivated seller and slove a problem. Could you tell me where you located your hard money and what the terms were i would appreciate it. Keep us posted. :smiley: