Property Owner Desperately Needs Help

16 Replies

Hello,

Any advice will help. I am a homeowner in Michigan who currently resides in my single family dwelling. This is the only property that I currently own. I have terrible credit. Also, I am currently self-employed with minimum income as I have previously been disabled. I owe property taxes that are due ASAP! I have been looking for asset based hard money private lenders. I figured, I should borrow, use funds to pay the property taxes and complete repairs to bring it up to date as well as personal expenses. If I am able to do this, I would be clear of property taxes and would just owe my lender. I will pay the lender according to the contract, then flip the home so that I can pay off the lender quicker.

Does this seem realistic? Are there any lenders that will lend to a property owner, asset-based only, no credit check, no income verification (only because its currently minimal, but not for long) and possibly no personal guarantee??? If I have to submit tax returns then I will.

I also had another idea to just sell AS-IS, take the funds, purchase 2 properties (1 to live in and 1 to flip). The only problem is it's worth more if I can get the repairs completed and property values are skyrocketing in my area, so I'd really rather not sell right now, maybe in a year.

I own an LLC does this help?

Also, I have never received a mortgage, a homeowners loan, a homeowners grant, repair assistance or anything.

I've checked businesses that either require money to loan you money which is ridiculous. Also, many say that because I live in my property, that's an issue.

Please jump in and respond. Thanks!

Account Closed  Going to be hard to get an investor to invest in the property with just debt in a second lien position for an owner occupant, especially because it would be difficult to evaluate your ability to pay back the loan.  I hate to say this but your best bet would be to sell home.  With your sense of urgency, I would act fast because the more urgency you have the more difficult it will be for you to get top dollar.

Account Closed

Per Casity's comment, if there's already a 1st position note on the property, most investors will not touch this.  Too much risk of getting wiped out and (no offense) your profile to repay is not very good.

If that's the case, I agree with her.  Sell it, perhaps at a loss.  Time doesn't seem to be your friend here.  

If you DO NOT have any other liens/notes with the property as collateral - then yes, I do think it would stand a good chance that you could find someone that would lend against your property, that is, if your property is worth anything/ the kind of thing that someone might want in their portfolio. From my experience, lenders and investors typically don't want properties that are:

  1. Below a certain value
  2. Out away from everything (ie: a very non liquid market)

If I'm you, the factors I'd use to decide whether I tried to fix it up to get top dollar to sell would include:

  1. How much time do you have?
  2. Is it credible that you won't be a desperate seller even if you get your place fixed up nice?  IE: how would you plan to manage the sale without tipping your hand that you are in a spot where you have very little leverage?  Let's just say that time is not your friend, and I know that as a buyer - what I can do is get you under contract and then whether its during the inspection, or whatever - be non-responsive, ask for crazy concessions etc and beat you up, getting you way down below market because I know you frankly.. cannot wait.
  3. Do you realistically have any skills to effectively do or manage what needs to be done to the house

Just because you can get a loan on it doesn't mean you should, though.

Prepared to get beat up on the terms though given what you've disclosed of your borrowing profile. 

Hard money lenders do not lend on owner occupied properties.  They must be investor owned, NON owner occupied properties.

You may want to look into moving out prior to applying for a hard money loan, or look for the money elsewhere....maybe a local credit union for a personal loan?

There's plenty of HELOC Lenders out there! But, how many of them will believe that you will know how to best use the amount you'd be asking to borrow, and agree to a delayed repayment schedule that you'd be asking them to grant? Sorry, I don't know. But, all the best...

@Anya F. As some of the previous people said, it is best to sell the property and start a new.  With so many factors against you, 1. owner occupied 2.  Bad Credit 3. Limited Income AND self-employed so they will most likely require 2 years worth of tax returns 4. Home in dis repair

You can check out my profile and contact me if you wish, but I specialize in building up credit for clients and could give you some free advice.

Hard money lenders do lend on owner occupied homes. They do not have to be non owner occupied. There are no laws prohibiting that. That said, they must assess a borrower's ability to repay and as others have stated, with your history, you are not a good risk on paper and most if not all lenders wouldn't touch you, especially considering you stated you had minimal income. For any hard money lender to lend to you, if you can't demonstrate the ability to repay the debt and they lend to you anyway, they would be in hot water.

Is your 1st a Fannie/Freddie/VA/USDA/FHA loan? If so, you may be able to apply for a loan modification that includes the advancement of taxes. If not, you may still be able to apply for an in house portfolio modification if your servicer has a program.

Have you tried to get on a tax repayment plan?

Many lenders will advance for taxes anyway and then default you considering a protective advance for issues such as taxes protects them. Have you contacted your lender? I'm confident the servicer is aware you are delinquent. It would be rare for any servicer still in business to not subscribe to a tax monitoring service.

There might be options. How delinquent are your taxes? Has a tax sale been scheduled?

This is the situation:

I have been on a payment plan with the treasury dept. I defaulted in March. They will not accept payment from March til current, explaining to me that I have to pay the entire bill for the past due years. I've never had a note/mortgage on the property. I have never taken out a loan or grant on the property. I own this property free and clear. It is completely paid for. I just owe property taxes on the home, that's it. My business does generate income per project not weekly. Also, I'm currently in training for a position with an outside company that starts paying at the end of the month. I have tax returns to validate my income. Also, I have another form of monthly income. I am able to make monthly payments with the income I currently have. With that being said, with my current living expenses, income is currently limited but on the rise. I just don't have the entire amount for the property tax bill. What do you suggest in this instance??? Still sell??? Also, if I just move out so that it's non-occupied, will that help to get a loan?

Also, home is not in completely bad shape. I need to make updates and repair some internal and roof damage.

Originally posted by @Account Closed :

This is the situation:

I have been on a payment plan with the treasury dept. I defaulted in March. They will not accept payment from March til current, explaining to me that I have to pay the entire bill for the past due years. I've never had a note/mortgage on the property. I have never taken out a loan or grant on the property. I own this property free and clear. It is completely paid for. I just owe property taxes on the home, that's it. My business does generate income per project not weekly. Also, I'm currently in training for a position with an outside company that starts paying at the end of the month. I have tax returns to validate my income. Also, I have another form of monthly income. I am able to make monthly payments with the income I currently have. With that being said, with my current living expenses, income is currently limited but on the rise. I just don't have the entire amount for the property tax bill. What do you suggest in this instance??? Still sell??? Also, if I just move out so that it's non-occupied, will that help to get a loan?

Also, home is not in completely bad shape. I need to make updates and repair some internal and roof damage.

I think you mean the assessors office? Treasury doesn't get involved with property taxes. We are talking about property taxes right? Not IRS or state income taxes?

Family/friend loan? It would be a shame to lose a free and clear property for delinquent taxes.

Moving out will do nothing to facilitate a loan. In fact, it would likely make it more difficult. What is the default amount? Could you get renters in and require enough of a deposit to cure the default?

I don't know your situation with any detail so my opinion would not be substantive to be honest but in general, I'd beg/borrower/lie/cheat/steal to get the funds needed to cure the default instead of losing a free and clear home. That said, if you are talking about $50M in taxes on a $25M home? I'd start looking for places to rent.

Originally posted by @Account Closed :

20K

 and what's the value of the property? Roughly? Assuming it's over $40M, yeah, maybe moving out and getting a hard money loan from a hard money lender would be (could be?) an option. You'll have to crunch the numbers. There isn't a lender with a brain that will lend on an owner occupied hard money loan. They can, but they'd do it to their peril in my opinion. Hard money lenders these days are fix and flip, rehab, investor type of deals and they are VERY expensive. They also crunch their numbers with the assumption of default meaning, they are going to lend on the assumption of having to take the property back in the event you do not pay them so they will be conservative with their figures to ensure they get made whole and then some.

I hope you have friends or family that might be able to help. Start a GoFund me page or something...anything to avoid the tax sale if you can.