Question: Owner Underwater on Property Tied to Primary Residence

6 Replies

Received a contact today from my mailing campaign, the gentleman is a motivated seller however there appears to be a significant problem after speaking with him.

The property was purchased and is owned free and clear, sort of. The gentleman purchased this property using a second on his primary residence which he currently owes 250k on. He demolished the home planning to redevelop the land but he is now underwater as the land is currently valued at about 90k.

Not really interested in making money off this as it would just feel good to help this guy out. From my point of view there don't seem like there are any options, so I am asking the BP family for some thoughts. Thanks!

Well, this property isn't under water, as there is no mtg on it.  It's worth what it's worth.  Whatever he sells it for could pay down the loan on his house.  Not sure what else you're looking for?

Originally posted by @Wayne Brooks :

Well, this property isn't under water, as there is no mtg on it.  It's worth what it's worth.  Whatever he sells it for could pay down the loan on his house.  Not sure what else you're looking for?

Apologies for the misuse of terms, seems like it's exactly what I figured and his only options are to keep it or take a loss.  Was just looking to see if there are any creative strategies this guy may have that I could investigate for him as I am pretty new here.

Appreciate the response.

What is his primary worth? 

Originally posted by Carolina NA:

What is his primary worth? 

 Just a Zestimate but it shows as 663k.  It's a nice home in a favorable area.

@Derrick Strope so he isn't too bad off if the property is worth more than what is owed.  I guess he would probably have to sell the land at a loss compared to what he paid for it.

Originally posted by Carolina NA so he isn't too bad off if the property is worth more than what is owed.  I guess he would probably have to sell the land at a loss compared to what he paid for it.

Right.  I actually did some comps and it's more like 470k (wow Zillow).   That said, his primary residence was built in 85 but doesn't look like it's been cared for judging by the yard and what appears to be the original paint job.

I will talk with him a little more, maybe he would consider doing a package deal for his primary and the land to get out from under the loan and get a nice chunk of cash to move into a new property.  Appreciate the response, bringing up the primary residence helped my think through other options.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Get the Ultimate Beginner's Guide

Sign up today to receive the popular eBook for free!