don’t let emotion cloud your judgment. look around and see if that money that your puting into an account could leverage something else and make more sence. the reason you want this is because it belongs to mom. back up and fall out of love with it and evaluate the situation and see if it is really worth it. only you can determine what you would pay for it. the money invested is gone. look into other simular properties and get the comps before you decide to make an offer to the note holder because you might discover why they didn’t take it back
I don’t if anybody remembers my question from a few days ago of what to do with 2 acres. Well anyway I am following up. I went to visit my mom this weekend to see if I should try to takeover the payments on some land that she has been buying for the past 11 years. She has come on hard times and now can’t afford to pay the note carrier.
Well she hasn’t paid the $400 per month payment in 8 months. She was just going to do a quit claim and give the property to the note carrier because she was having alot of medical and financial hardships at the time and she didn’t want to even deal with trying to sell the property.
She sent them the quit claim and they mailed it back and said we want you to try and sell the property. She didn’t do anything for 8 months. So I thought maybe I would take over payments on the property as an investment. I talked to the note carrier and he said fine if you just make up the interest payments for the past eight months I could take over like my mother had never stopped paying.
So I decided Visit the town where the property is and see what I would be getting into. Well it turned out that when she and her x-husband had bought the property they way overpaid. They didn’t do any market research and they bought the first thing they looked. After 11 years of payments.
What she owes on the property is just about equal to what it is worth. I drove around the area and found out that the people that are renting are paying in $500 dollar per month range. The payment is $400 per month interest is 10%.
This was disappointing and sad.
Anyway mom mother now lives in a trailer in my brothers backyard. Oh and did I mention that there is no longer a mobile home on the property because she sold it for $1000.00
when she was running out of money. So I wouldn’t be able to rent it out to cover the payment. Besides I really don’t want to be a landlord anyway.
The notecarrier has not seen the property or the area around it.
Well in driving to the area and checking it out I found out that within about a quarter mile there has recently been about 10 acres purchased and it looks like they are going to be building some houses on that property. So it it possible that the value may be going up although it may take a few years before the development of houses reaches her area.
I would hate to give up the property and then see it double in value next year or the year after.
Apparently the note carrier really doesn’t really want to have to deal with this property and would rather just have somebody make the payment. They aren’t in the real estate business they just want there interest. Although they could have just sold the property when my mother gave them the quit claim and made probably $40,000. I don’t really know exactly what there motivation or lack of motivation is all about. Maybe they just fell sorry for my mom and wanted to give her a break. To see if she could try to sell it.
I was thinking about asking the note carrier if he would take a lower payoff than she owes. Maybe offer him $10,000 to lose the headache. You may ask why would he do that if he could just take the quit claim and sell it for $40,000. Well I don’t know but they have made alot of money already and they might just want out.
I also thought maybe he would agree to give us the land allow us to clean it up and sell it and then pay him off after we sell it. I don’t know if this is something that people do anyway I know I am rambling and writing a novel here.
If anybody is still reading and has any suggestions, thoughts or anything to say at all reguarding this situation I would love to here.
Please no sarcasm about my lengthy explanation of the situation. It’s just a kind of complicated story.
If I don’t get any good ideas soon I’ll probably just try to get him to take the land so that my mother doesn’t have a foreclosure on her credit although it doesn’t really matter that much anyway with all the medical and other problems she’s had in the past year her credit is already ruined. If they want to try to foreclose or put a lein on the property or whatever. You can’t get blood from a turnip.
Re: 2 Acres of land not as good as I thought - Posted by ScottS(NC)
Posted by ScottS(NC) on March 12, 2002 at 07:34:20:
David,
Look at your options and make a decision. Base it on the area its in, the rental market for the area ect. I don’t reccomend not paying your payments, if you decide to keep this immediatly go to the note holder and square things up. Definetly ask for a discount and ask him to wave late payments and allow you to start fresh. If this note holder is nice enough not to drag your mom in to court, then DON’T keep pushing your luck. Remember what comes around goes around! Would you want to be the note holder some day and have people not paying you until they figure out how to make the land pay them? Do the right thing. Take Care ScottS(NC)
David,
Here’s a few ideas to think about.
It seems that the current noteholders are not interested in foreclosing (they sent the quitclaim deed back). If this is the case, then you might have your mom sign the property into a landtrust controlled by a LLC that you set up. You will then have control, because you will be the new beneficiary of the landtrust via an assignment of beneficiary interest. Once you control the property, you might then elect to sell and clear out the note (have you asked the noteholder if they will discount yet?)
You might also think about getting another low priced mobile and put it on the land, then sell the package and carry the paper or rent it out for cash flow.
Either way though, I personally would not make any payments to the noteholder at this time. If they are not going to foreclose, why make payments. Just set aside the payment money into a separate account in case they change their minds and you elect to pay the money, so you will have it if you need it.
As an extra thought, you might see if you could put more than one mobile on the land. How about 10 or 12?
Either way, if you just sell it or if you create cash flow off the property, maybe you can get it to pay you. Once it is paying you, then start making payments to the noteholders.
Good luck,
Bill