My brother in law has got him self in to a house land package with a girlfriend who now wants out. He reckons the bank is about to take it (it isnt completed yet) at first he wanted money from us to pay her out and finish building, now he is out of work and we think we will have to cover the entire project. Financially we think we could get finance. My question is what would be the best way of going about it o protect ourselves from this awful situation. We feel we cant ignore him as he knows we have rental propities & if we let him go under the rest of the family would be devestated.
Hey there,
Don’t know if this is any help but here it goes.I would find out:
1. If they are behind on payments
2. How much to compete the project …. or is the mortgage going to cover it?
3. Get a payout figure from the lender to discharge it (this will let you know if there ar any other credit cards or anyother nasty unkown bills to tag onto the payout figure .
4. See how much the girlfreind put into it?
5. See if she will accept a cash payout to sign over her rights to the property?
6. See if you can assume the mortgage (Limited power of atourney).
7. Get deed signed over from brother in law and the girlfriend…..
8. Perhaps you could then also see if you go guarantor on the mortgage whether the bank will back off.
9. you could get a lease option on it with full rights to renew and give the Bro in law a small cut of the profits later on down the road (say 5% of nett profits + his deposit back….Cheers,
Kiwi[strum]Why Rent? Rent 2 own!
http://www.rent2ownaus.comHi Danii,
This may sound harsh but obviously if he’s old enough to secure a loan for the property and he and his girlfriend have made the decision to purchase the property then they are responsible for the outcomes that result from it.On the other hand if you can afford to and it is not going to place you in a risky financial state now or in the future ie restrict your further investing then by all means help out.If you cover the whole project then I believe the property should become yours,I dont think the bank will finance the deal without security either on your existing properties or the house and land which your brother in law has.I think the easiest solution is for your brother in law to put the property on the market asap.If you were to take over the property do you see it increasing in capital growth that would satisfy the investor in you?Good luck in any decision you make its a tricky one.
Regards MartinThere are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Thanks for he quick responc[biggrin]
At least I can make a start. The only thing i wasnt keen on was going guarantor. I was thinking it was awfully risky considering I dont trust him very much!
Originally posted by dannii72:Thanks for he quick responc[biggrin]
At least I can make a start. The only thing i wasnt keen on was going guarantor. I was thinking it was awfully risky considering I dont trust him very much!
That ok… you can still take control of it if you go guarentor…..
Limitied Power Of Atourney will see to that ….
This way you can control all the bill payments, insurance payment etc …even if they are in his name. Or you can just Rent 2 own it back to him and get him to prove to you that he can do this … or he is out (with his credit still in tact…. he will still be better off than he is today!).
Cheers,
Kiwi[strum]Why Rent? Rent 2 own!
http://www.rent2ownaus.comWhy don’t you offer to buy the project from him.
If you can find a price that will make sense for you and also bail him out of trouble?
With family it might be wiser not to make too big a profit from him tho as this might cause lasting resentment?
I think you need to seek some professional advice and temper it with compassion and common sense – remember this is family we are discussing.
Makes no financial sense to go down the drain with him so I would seriously consider the wisdom in going guarantor.
All the best
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Just remember that if you bail him out he has really learnt nothing from this.
Has he been bailed out all of his life? If he gets bailed out now will he then move on to an even bigger blunder next time because he has not learned his lessons this time?
These are the questions you need to ask yourself when you move forward on what to do here.
Sounds cruel – and only you know the full situation – but I would be tempted to let him jsut sort this out himself. If he sells and makes say a $10,000 loss and his girlfriend makes another $10,000 loss after all this is said and done, maybe the time process of paying down that debt will enstill and greater sense of value to their money and save them from greater financial mistakes later in life when the consequences are greater.
Think about it. How would you actually ‘help’ him the best?
Or are you ‘helping’ yourself by bailing him out and keeping the scorne of the rest of family out of your life.
I know what I would do.
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