Posted by JohnBoy on September 02, 2001 at 03:27:30:
What’s the house worth?
What is the interest rate on the loan?
Does it need any work?
You say you’re renting at a slightly negative cash flow. What is the rent? Is that market rent for the area?
best way to unload upside-down mortgaged rental? - Posted by Nancy
Posted by Nancy on September 02, 2001 at 03:17:56:
Okay, we were playing the no-money down monopoly game (about 10 years ago…thank you Marshall Reddig) and bid on a VA foreclosure, we didn’t get the bid the first time around. It came back to us and we asked the realtor for comps, but didn’t get any, got caught in a time squeeze to respond. Upshot we overbid the value of the house by about $10,000. We have had to put alot into it for repairs. To make matters worse we are out-of-state landlords (I know, I know now, duh!) It has a slightly negative cash flow. Do we cut our losses and run? Refi and hope for some appreciation in the property over a longer haul? We are desperate for some advice, having adopted (inadvertantly) two special needs kids has put us in a financial squeeze and I haven’t been able to return to work for that reason. Its VA assumable but still the loan is more than the value of the house…any ideas would be appreciated.
Re: best way to unload u - Posted by dewCO
Posted by dewCO on September 04, 2001 at 13:36:22:
David makes a good point, babout knwoing the value now—hope you’re not using the same realtor or company, to determine value today!!! How about finding out if any of the tenants want to buy?
Lots of questions… - Posted by David Krulac
Posted by David Krulac on September 03, 2001 at 21:58:16:
BD and Johnboy have good questions. I have a couple more. How do you know the current value? If you are out of state you may be underestimating the market.
The interest rate of the VA assumable is critical if its lower, at or slightly above today’s market, you have a shot at getting a buyer to assume. With low assumption fees, an interest rate above market or a price slightly above market is still sellable. And if ALL else fails, you could always try giving some financial incentive to the buyer. I can see the ad “I’ll give you $3,000 to buy my house”. Then pay down the principle on the mortgage by $3,000 at settlement. It would cost you but remove it from your plate. This would be a LAST resort.
Re: best way to unload upside-down rental? - Posted by Ronald * Starr
Posted by Ronald * Starr on September 03, 2001 at 19:25:07:
Nancy------------
If the property is a break-even or slightly positive after income taxes, you might consider keeping it. Sometimes, if it is not a burden on you, holding unitl it comes up in value is the way to go. You may want to make sure that your rents are at market value. When you are an absentee landlord, it can be easy to be out of touch.
When you bought, you did not know the market value. I’m sure you are kicking yourself for that. That is not get wayt to buy. But, now, do you suppose that there might be some other buyers out there that do not know the value either? You might try reselling the property at you you paid or even a couple of thousand dollars more. Try to sell at very little or, for very good credit folk, no money down.
If you can wrap the VA loan and get a couple of percent more interest that may be helpful to you. With owner-carry financing you can often get people to pay $10K more than market value, at least if you believe many posts here on CREONLINE.COM . You might want to search on posts for discussioin of VA loans, wrapping loans, etc.
Good InvestingRon Starr*********
Re: best way to unload… - Posted by BD SoCal
Posted by BD SoCal on September 03, 2001 at 18:11:44:
what state is the property in, nancy? how much of a negative do you have? what’s the sq ft, yr blt, and the no. of bd/ba? would really like to know…