Posted by Jeff on June 15, 2007 at 11:44:23:
I hear ya! I told him not to invest for cash flow and depreciation!! I told him if he was investing for appreciation he might as well play the stock market, he obviously didn’t understand… thanks for your thoughts Gene … good karma to you
Jeff
Can anyone give some advice to help mu Uncle? - Posted by Jeff
Posted by Jeff on June 15, 2007 at 10:25:47:
I have an uncle who is currently living in AZ (Mesa area). He is retired and makes a decent income. He moved out to AZ a few years back and started buying up property and land. He would buy a house wait 6 months refi take the $$ out and buy another one. With hopes he would sell them in a year or two for a profit. Now the market has slowed and he is in a whole lot of trouble. Everything at this point is current but he is living off CC’s and it cant last forever.
Does anyone have any advice on how to get out of this bad situation? Any suggestions greatly appreciated.
Re: Can anyone give some advice to help mu Uncle? - Posted by David C. Cooper
Posted by David C. Cooper on June 15, 2007 at 10:31:41:
What is he doing with the properties? Are the rented, vacant, for sale, what’s going on?
If not, I’d immediately list them and start looking for buyers or buyer/tenants for lease option. You might even consider renting them if it cash-flows.
Re: Can anyone give some advice to help mu Uncle? - Posted by Jeff
Posted by Jeff on June 15, 2007 at 10:42:42:
He lives in 1 has 2 rented that are negative cash flow. 1 vacation cottage and some vacant land.
Re: Can anyone give some advice to help mu Uncle? - Posted by michaela-CA
Posted by michaela-CA on June 15, 2007 at 17:55:10:
Jeff,
what aobut the land? Is it inside the city? In the country? Is it an improved lot?(That means, it used to have a house on it, which got demolished. And the lot has water and power access from the city) or is it unimproved land?
Maybe he should try to sell that? If it’s a lot, then there might be demand. I found even in bad times in Atlanta, builders were always chomping at the bit for a good lot.
Be aware, if your uncle stops making payments with the thought of giving the deed back in lieu, that some mortgage companies want to see a financial statement and make sure, that he doesn’t have any more funds or equity anywhere else. They won’t accept the deed, if he has other assets.
Michaela
Re: Can anyone give some advice to help mu Uncle? - Posted by Gene
Posted by Gene on June 15, 2007 at 11:06:54:
Many freinds that got carried away durring the bubble are in a similar situation to your uncle.
He really has three options:
1 - Rent out everything and take the loss utill the market improves (sometime between 2008 and 2012…IMO).
2 - Sell. If he bought in the last couple years it is likely that he will take a loss. If he can afford the loss this is an option. Possibly trying to work out a short sale would also work.
3 - give them back to the bank. It will cost him his credit but it might be the best thing to do right now.
Gene
Re: Can anyone give some advice to help mu Uncle? - Posted by Jeff
Posted by Jeff on June 15, 2007 at 20:38:39:
The land has power and an availiable well. Its not ready to build and its an area that was supposed to go big but hasn’t hit its stride. The land only cost him $170 a month the big deal is 1 House $2300 mortgage $1400 rent, 1 $2800 mortgage $2000 rent, current residence … atleast $2500, a cabin at $1900, another houose his son was living in at $2500 but he moved out and he is maybe getting $1200. He has no oequity and is living off CC’s. He is amazed I can remember all this stuff b/c he cant keep it straight.
I told him to list all houses (except residence) and at the same time advertise “rent to own, no money down, bad credit OK”. He said he is going to do that and if it comes to voluntary surrender we will cross that bridge when it happens.
Basically no one property is the resolution to the total problem. He gambled and lost, he needs a way to keep his home and some way of life. His financial statement I assume is heavy on the negative. If you have any advice please share… thanks
Re: Can anyone give some advice to help mu Uncle? - Posted by Jeff
Posted by Jeff on June 15, 2007 at 11:13:49:
Those are some of the options I gave him. He tried to negotiate with the bank and they said they wont even consider it until he is delq on the mortgage payment (3 months or more). How does one “give” it back to the bank? Is it a voluntary repo? Will he have any further financial liability if he does give it back?
Re: Can anyone give some advice to help mu Uncle? - Posted by Gene
Posted by Gene on June 15, 2007 at 11:28:15:
>>>>>>>>He tried to negotiate with the bank and they said they wont even consider it until he is delq on the mortgage payment (3 months or more).>>>>>>>>>
I didn’t know if he was deliqunet or not. One of my friends did the same thing, so he quit making the payments and after a few months he approached the bank again. This is a big decision and he should do homework (talk with accountaint/lawyer) as to the tax/credit rating ramifications.
>>>>>>>>How does one “give” it back to the bank? Is it a voluntary repo? Will he have any further financial liability if he does give it back? >>>>>>>>
Another guy I know “gave” it back to the bank by letting it go into foreclosure. He stopped making the payments for the last several months and basically just let the bank persue the foreclosure and he took no action to stop it. He collected rent durring this time and that helped him out a little bit. Again…This is a big decision and he should do homework (talk with accountaint/lawyer) as to the tax/credit rating ramifications.
Re: Can anyone give some advice to help mu Uncle? - Posted by Jeff
Posted by Jeff on June 15, 2007 at 11:33:26:
Thats about what I figured. I told him he can either live a somewhat normal life and have a bad credit score or he can keep robbing Peter to Pay Paul and get no where. He told me he doesn’t need to buy anything else so he doesnt care about his credit. I will speak with him again soon. I have also been doing some research on a Voluntary Surrender and that seems as it might be better. There wont be a foreclosure on his credit just Voluntary Surrender… thanks for the tips I will pass it along
Re: Can anyone give some advice to help mu Uncle? - Posted by Gene
Posted by Gene on June 15, 2007 at 11:40:26:
One other thing you can tell you uncle is that he is not alone. Obviously he made some bad choices but there are thousands in very similar situations right now. I am guessing that most “investors” that bought in the last 2 years are not doing as well as they thought.
I run into it all the time. Many friend of mine got carried away and bought into the NAR hype. I also get a lot of calls from “investors” that want to sell to me, but they almost always owe much more than the properties are worth. Usually short sells are not even a good option for me because the market is still crashing.
Gene