Property Owner Needs HELP ASAP

9 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!

anya,

You may find a hard money lender that will work with you, but it depends on how much collateral you have in the property, they will not help you if there is no skin in the game, and if they do, your interest rate and fees will be killer. from what it sounds like, you may be better off selling as is and not creating more debt in order to maybe make more money on the sale. 

Patrick Liska, Contractor

@Account Closed

Hard money lenders will not lend on a primary residence as any loan needs to comply with CFPB which means you need to qualify through normal means. Since your credit is bad and you have low income your options are extremely limited. Since you owe the taxes I would start with the jurisdiction of getting on a payment plan.

If that doesn’t work then consider selling the property - not to sound cruel but if your not able to pay taxes then why would someone think you would repay a loan?

How many years of back taxes do you owe? I don't think getting more debt to pay debt makes any sense especially when the debt you are talking about comes with high interest. You state you have never received a mortgage, do you own this home free and clear so all you have to pay is taxes, insurance and maintenance? 

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?

If you're free & clear,  Have you sought-out any reputable No-Doc lenders?  

My advice (FWIW; I am no one.) , Stay AS CLOSE AS POSSIBLE to a "real" bank-style lender, if you can, to avoid having someone take advantage of you. Hire a decent, REPUTABLE lawyer, and get them on retainer;  agree to pay their fee upon receipt of your funding.  That Attorney may know some no-doc lenders, too. 

Whatever you do, don't give anyone any more than Mortgage Covenants (e.g., no ownership rights other than a mortgage lien- interest)  Also, whatever you do, don't borrow all the way up-to your ability to repay-- give yourself a cushion.  

Sounds to me like you've got the equity, assuming the house is in OK shape.  You'll pay taxes, Legal, and have some money to repair.  Then, when you get your 'steady' job, you can refi after another 6 months.  

Good luck.  

Not a lawyer so no legal advice, just a question:  Wouldn't filing for bankruptcy protection enable you to keep your primary residence and also possibly have the courts help you to go back on monthly payments for your tax debt?  Many states offer free legal advice, so it may be worth checking into, especially if you say your credit is already bad.  You could then recover your credit while your income is rising, stay in your home and not have to sell until you're ready to sell.  It is very difficult getting a loan with bad credit and low income.  You may find a local investor at a local real estate investing group willing to buy in to help repair your home and  keep it out of foreclosure for a percentage of the final sale, but that would require you selling and they'd probably want a higher percentage than you think in order to  make it worth their while.       

No-Doc Lenders? This is my first time hearing of it. I will definitely check this out ASAP! And thanks for the other advice too, I appreciate all of the help.

Bankruptcy? I'll call around right now to see if it's an option in Michigan to still keep my home. I really do not want to file bankruptcy but hey I may have to if nothing else works and soon.

Found a private lender but his contract was crazy! Make one wrong move and he'd take the property. So, I'm going to try this No-doc lender idea too, call a real estate attorney see what they say and check out a few banks. I'll try all of you guys advice to see what works. Somethings gotta give.

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