Posted by Jeff (FL) on March 27, 2000 at 18:03:42:
Perhaps you should look for a partner. Someone to put up the cash you don’t have. Work out an equitable agreement on profit sharing. Might save a bankruptcy.
Jeff (FL)
HELP!!! - Posted by PUP
Posted by PUP on March 25, 2000 at 21:04:41:
I have written before regarding a rehab property that I’ve been trying to sell, with no luck. I’ve tried advertising it FSBO with owner financing, and dropped the price, but no interest. I’ve tried to offer it as a lease option, but to no avail.
I had bought a large commercial property before I had finished the rehab and have been unable to get additional funding to do the renovations needed to create an antique mall, as I proposed. When I purchased the property, the bank would only lend me the actual purchase price, about $65k less then it appraised for. I needed to have more cash in order to get the building finished…but my hands are tied. I can’t rent out spaces until the building is finished, and I can’t finish the building with no cash. Catch 22. I’m currently paying over $5k a month for 5 mortgages. Two are currently producing some income, but not enough to cover this nut. I’m currently 2 months late on 2 $1200 per month mortgages. I see no light at the end of the tunnel. With no prospects of a quick sale, I’m considering filing bankruptcy. I’m going to meet with my attorney tomorrow to discuss the ramifications.
Does anyone have any suggestions or ideas? If there’s anyone out there that would like a package deal on 4 properties, let me know. I’m like some of the people I read about on this board that ‘just want out!’. I JUST WANT OUT!
Thanks in advance.
Pup
sound advice - Posted by charles (delaware)
Posted by charles (delaware) on March 25, 2000 at 23:06:54:
First. Stop thinking bankruptcy. that is last resort.
Next talk with a local auctioneer who specialized in real estate and find out what he thinks your property (or properties) will go for at an auction. Find out what a realistic “minimum bid” will be for each property (see if you can live with that minimum figure). Sometimes the auctioneer will want half of the advertising fee upfront but see if he will take it on the back end. Make sure he is spending a decent amount of money advertising. Total ad fees and advertising may run 7% or so depending. I have auctioned property before and it gets actually very good prices. Even unfinished rehabs bec the next guy thinks he is getting a deal. You will have CASH in 30 days from auction. maybe earlier.
You may want to talk with the bank for which you are late and tell them your strategy for debt reduction, etc. Although with only a few payments behind you may want to lay low a little longer.
Remember an auction does not always mean “desperate”. it is only a different way to sell property.
Lastly, if your credit is still decent, consider getting a small personal line of credit at another bank in order to give you some cash on hand to carry you thru.
Unless you overpaid considerably you may just be in a temporary negative cash flow period and this will not be the end of the world.
You just have to take action now before you get too far under.