What's New Today pt2

[Gerda]

Can, I looked up your state. Hawaii has the same child support enforcement set up as my state. Do not talk to H about it anymore. Give them the whole file. They will set up an account and take the money out of his paycheck and put it in your account for you to access for D4. No discussion with him needed. Keep records of every time he does not pay. Your agreement says to pay child support. You are not making a new agreement with the rental income. Keep everything very clear and separate.

I still don't understand why your D agreement didn't specify if you get to stay in the house til D is 18 and then split the sale or if you have to sell it now, etc. Why would a judge leave you with all those loose ends? It's not even an equitable set up, and if you were the homemaker all these years, YOU GET ALIMONY.

If you don't want to go after that for peace reasons, I get it. But it seems like you got a little shafted, except for getting to stay in the house. But that should have been quantified as part of the deal.

But if you want to just start from where you are --

Let's suppose your house appraises for $100,000 (I know it's way more, this is just for simple math) and there is $30,000 of mortgage and $20,000 of your other house loan on it.

So the equity is $50,000, $25,000 is yours and $25,000 is H's.

The ability of the property to earn money is just part of the appraisal value. You don't have to think about that for the deal with H.

So H is owed $25,000.
But of that $25,000, you get a credit of $5,000 for the money you put in to buy it.
So H is owed $20,000.

I think from what you said above, there is no other deductions you can take.

You are not currently in a position to refinance the property for the $50,000 of loans plus the $20,000 for H.

But you might be able to get a modification of the loans. EVERYONE is modifying loans right now. If it's a Freddy or Fannie Mac, they have an automatic modification that will lower your monthly payments.

Either way, you only need to come up with the $20,000 for H. It might be a lot for you right now but it's something that is possible. It will buy you time and allow you to cut ties with H. Then if you have to sell even six months from now, you can do it on your own, your own way.

If you have no way to pay him that 20K, you can offer a payment plan, where you give him something down, whatever you can borrow from family or something, and the rest you can pay monthly or yearly, to pay him off over the next three years, or five or one, whatever you need.

Now about the house.

I think you need to rethink that. You have the chance to own a valuable property in HAWAII by yourself. You can decide in a year if you want to sell it or not. For now, it's an investment opportunity.

Watch a bunch of tiny house videos on youtube. See how other people do it. Put stuff in storage or purge it. Move to the tiny house. Make your daughter the cutest little fairy bedroom ever in the loft. Build a huge deck so you have tons of outdoor space added to your living space. Rent out the big house to someone for one year and use the money to pay H off for his share of the equity.

(It could even be worth taking a partner -- e.g., if someone gives you $20,000 for H, they would be a 20% owner in the property, not a 50% owner. Bank as partner is better, you can pay them off and be done, 20% owner would get 20% when you sell. But it's still better than 50% owned by H!)

Create an LLC to collect rents, do that now. Let's say your tenant pays $10. You pay $8 of that to the joint account as rental income and leave the other $2 to use for rental expenses, repairs, etc. On your taxes, your rental income is $8, not $10. It really will help.

And you need that half of his rental income to show as his income, as it will be part of the child support calculation!

Also you need the child support earmarked as a specific payment, separate from anything else, because you can declare it as income when you refinance or get a new mortgage.

I hope this is not too much info.