HELP! I really need some assistance here... - Posted by Charity

Posted by Sean on March 29, 2006 at 15:05:19:

So, wait now, they are defaulting on their agreement, and haven’t paid their full agreed rental payment since November and there is 36k-46k equity in the property?

Boot them out, fire sale it and make some money. Why are you trying to turn these dead beats into buyers… get rid of them and sell it outright to someone who can buy. Or at the very least, will lease option it for a higher price, and make the rental payment.

HELP! I really need some assistance here… - Posted by Charity

Posted by Charity on March 29, 2006 at 14:55:35:

OK, we have lease purchasers in a house in Gwinnett County, GA. They paid great for a year and a half and then started paying only $1000 a month in November (the underlying payment is $1399 because we were stupid and took an ARM from the original owner- this is a Sub2). We have continued taking the “hit” because we figured $1000 is better than nothing and we really cannot pay the whole payment each month right now. We owe about $154K and home is worth $190-$200K. Tenants tried to get financing, but have a 2 month old bankruptcy and bad credit now (did not when we rented to them). Then tried to get a refi and were approved, but pmt too high for them ($1400). They want to stay in the home, but we want OUT. Great area, values rising, but we need to be done with Sub2 for awhile. We sold our other 3 and want to relax for awhile.

They need a loan that would give them a pmt around $1200 or less. We want about $10K from the deal minimum. We are looking for someone to buy the home (NOT take over Sub2, just buy it) and sell it or rent to them, whatever you want to do. Anyone know of an investor who may be interested OR a company that would lend these people $$ with a 530 credit score and recent BK?

The other homes in the nhood are $200K and above… Getting this home for $174 would be a good deal for someone…


I’ve been in your shoes… - Posted by J. Christopher

Posted by J. Christopher on March 30, 2006 at 22:45:26:


I feel your pain. I was in a similiar situation where, as Jim FL stated, I lost control of the deal. Fortunatley, Jim gave me the same advice as he gave you and I saved the deal.

My advice: Stay in control! That’s YOUR house. You call the shots. If they’re not paying (short pay or not), out they go ! Remember, just because your name is Charity does NOT mean that you’re a chartiable organization. You’re a real estate investor and you’re in this business to make money. Stay strong. You can do this.


J. Christopher

Re: HELP! I really need some assistance here… - Posted by Chris in FL

Posted by Chris in FL on March 30, 2006 at 13:43:21:

Charity, Jim and Sean both hit the nail on the head. Sounds like you really want to help the tenant, and that is admirable. Our first objective should always be to help people, but in this case they are probably in over their heads. They need to find another house that is less expensive (maybe you know another investor with something in their price range?). Anyhow, you have equity in the house, and you can sell it slightly below value and still make a decent profit. This might be accomplished with or without the tenant in the house, but sooner or later the current tenant buyer is still going to have to go because they can’t afford that much house.
If you want to sell it for $154K, I am interested, but a $190K house for $174K is not a bargain this investor is interested in. However, you should be able to sell it at that price to someone wanting to be a homeowner without much trouble at all (they would be delighted to get a bargain). Keep in mind, a homeowner-buyer is not going to want a tenant in there. Best wishes, and if you want to give it away let me know!

Re: HELP! I really need some assistance here… - Posted by Jim FL

Posted by Jim FL on March 29, 2006 at 19:20:09:

Charity and company…
Here is your first mistake, and one you’ve made before.
This might be harsh, but, you know me.
Have a thick skin, and PLEASE listen to what I have to say here.
Take it to heart, but not personal, this is business.

Your post here says a lot about what you WANT, and what the tenants WANT…not what is needed.

Bottom line, you lost control the minute you allowed the tenant to not pay full rent.
The thing is, this is a deal that does have profit left in it, for you, if you act correctly.
The thing is, you must take control, and maintain it.

Tell the tenants, here’s the deal folks, you cannot afford to buy the house, and we cannot keep you in it.
So, buy or leave, here’s your notice.
then, when they get out, clean it up and market like mad.
If its worth say $200k, offer it at $190k, and cover some closing costs for the buyer.
Bottom line, you let emotion and fear take over here and this is why the deal has not gone well…in your mind.
So, change your mindset, you own the house, you control things.
Get it done and get it done fast.

I’ve seen you be timid before, and it paralyzed you…then, when you took control, what happened?
You did fine.
Don’t be afraid to ruffle some feathers along the way…as long as the deal closes, and everyone gets paid as they should.

I wantded to go into much more detail here, but frankly I’m getting ready for a trip and lack the time.

Call me if you need to, I will help get this straightened out for you, if you want.

Take care,
Jim FL

P.S. Drop me a priv email for a # if you lost it.