Landlords and Foreclosure

I currently own a rental property. The amount I owe is more than the house is now worth. The income rent is less than the mortgage payment. The house is over 120 years old. And the current tenents have trashed the house. I do not have the money to repair/upgrade. I just want out. Does anyone know the ramififications on me if I just let the house go into foreclosre. It is currently empty. :cry:

Edited: 06/26/2010 at 07:08AM

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

Moderator Pro

12,319 posts
15 awards
95 influence

Feb 02 '09, 07:41 AM

Your credit will be trashed.

The lender may come after you for a deficiency judgment.

You may get a 1099 and owe tax on the forgiven debt.

Edited: 06/26/2010 at 07:08AM

Jon Holdman, Flying Phoenix LLC

Minna Reid

Real Estate Broker · Southington, Connecticut

675 posts
2 awards
50 influence

Feb 02 '09, 06:38 PM

if you cant make it right, at least consider a short sale. The lender is less likely to come after you for the deficiency, and your credit will take a lesser hit.

Edited: 06/26/2010 at 07:08AM

Account Closed

805 posts
2 awards
50 influence

Feb 02 '09, 09:22 PM

With an investment property a lender may or may not be willing to forgo the deficiency.

However, the IRS will not. There are no programs or options that will allow you to avoid paying taxes on the difference between what you currently owe and what the lender eventually nets.

What if you offered it to an investor in your area? You could offer to cover some or all of the negative cash flow for some period of time in exchange for them just taking over your position.

There have to be some in your area who took classes from Robert Allen, Carlton Sheets, etc. who think they can overcome a bad investment with the right terms. :roll:

Give it a try, it just might solve your problem.

Edited: 06/26/2010 at 07:08AM

Rob Lawrence

· Rhode Island

38 posts
50 influence

Feb 08 '09, 09:24 PM

I would say try to get renters in there who are willing to fix it up, offer then a discount on rent? Maybe that will work? How about renting the rooms out to students?

Edited: 06/26/2010 at 07:12AM

Fjcruiser X

5 posts
50 influence

Feb 09 '09, 01:25 AM

I would talk to the Real Estate Attorney in the county you live.

Edited: 06/26/2010 at 07:12AM

Vicci Fain

Loss Mitigation Specialist · Oklahoma City, Oklahoma

4 posts
50 influence

Feb 09 '09, 05:43 AM

Have you looked into a loan audit? With a loan audit you could get money damages and/ or lower rate loan.[SOLICITATION REMOVED]

Edited: 06/26/2010 at 07:12AM by Moderator

Will Barnard

Rehabber · Santa Clarita, California

Donor Pro

7,835 posts
23 awards
92 influence

Apr 20 '09, 02:22 PM

Vicci,
You have made a total of 4 posts, all of which are solicitations for what I assume to be Mercer's company.

Try reading the forum rules and adding some value rather than just making solicitations, they get deleted anyways.

Edited: 06/26/2010 at 07:59AM

Will Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com

Steve Mark

· Laguna hills, California

9 posts
50 influence

Apr 20 '09, 07:02 PM

For your problem foreclosures can be done in judicial and non-judicial processes; that is, lenders can foreclose in or out of court. The method followed depends on the contents of the mortgage contract. Both mortgages and deeds of trust are considered primary security instruments. The average foreclosure lasts about 150 days, or about five months.

I think this would help you

Edited: 06/26/2010 at 07:59AM by Administrator