facing foreclosure in California, where to turn for advice?

Foreclosures
3yFollow

facing foreclosure in California, where to turn for advice?

Dennis Nikolaev
Member since 2019 · 84 posts · 32 votes

it looks like a hopless situation for me.

I had all of my life savings put in Yucca Vally short term rentals In  early 2022. got 4 nice villas at 20% equity. then 2 things happened: rates went up and demand for vacation rentals in that location went WAY down. 

I was loosing 20 to 15k per month. I sold 2 of the 4 properties at a significant loss. However, 2 remaining properties I can't sell, even bellow my equity in it. For example the number 4 property is a hilltop modern beauty. amazing views, premium neighborhood.  I paid $1'025'000 for it, then upgraded it. in summer of 2022 it was appraised for $1.15 million. 

now it is listed for $799k and there are no takers.

I am facing a foreclosure on both of the remaining properties. 

I'm still current on my payments but by now all the hope is lost.

all of my life savings are gone, and now I'm about to have collectors on my back for the rest of my life.

I need an advice how to navigate through giving up on the properties.

Dennis

2Reply
56 views

Most Popular Reply

Minna Reid
Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 633 votes
3y

Bankruptcy is a good solution when you have massive debts, but if it's just the properties that are behind, a short sale is generally a better solution, especially if you can settle the debt through the short sale (which is the result 99% of the time). 

You also have to qualify for Chp 7, you don't just get one.

It's also a myth that property "goes back" to the lender in bk. There is no such thing. The lender still has to foreclose on the property after the bk to get title, so now you're looking at not only a bankruptcy, but a foreclosure after. If the only debt problem is the mortgages, attempting a short sale would be the easiest way out of this, with the fastest recovery time. OP should find a very experienced short sale agent locally and have a conversation.

3Reply
See this reply in the discussion

34 Replies

Jump to latestLatest
  • Dennis Nikolaev
    Member since 2021 · 15 posts · 4 votes
    3y

    wow, 5 years...

    0Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    3y

    @Dennis Nikolaev I would check out maybe an investor taking if off your hands if you are cash flowing and holding the note as a wrap. It sounds like this is not the case, and keeping the properties moving along for a little bit, but that small possibility as it sounds like you are losing the cash that is a large lump sum each and every month. 

    If you need a short sale agent that has experience I would talk to Joe Homs on here for that advise. I shot you a DM with a BK attorney as well, he is a good one and works in California. 

    @Joe Homs

    The McKernan Group4.957 Reviews
    WebsiteView Page
    1Reply
  • Dennis Nikolaev
    Member since 2021 · 15 posts · 4 votes
    3y

    @Peter Mckernan thank you

    0Reply
  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 633 posts · 336 votes
    3y

    @Dennis Nikolaev @Dennis Nikolaev Welcome! I am terribly sorry to hear about your situation. I appreciate you sharing this publicly as many would not and this will help other investors. I assume the property is NOT breaking even and losing money? Are you able to afford living in either of the properties? Are you single and possibly rent out rooms? I would certainly discuss with a very experienced bankruptcy attorney of there are no other options. I am hoping some short term rental owners and possibly locally to you will chime in and offer any information for you. Is it possible to post some income and expense numbers on the property? Good luck and keep us posted.

    1Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y
    Quote from @Dennis Nikolaev:

    it looks like a hopless situation for me.

    I had all of my life savings put in Yucca Vally short term rentals In  early 2022. got 4 nice villas at 20% equity. then 2 things happened: rates went up and demand for vacation rentals in that location went WAY down. 

    I was loosing 20 to 15k per month. I sold 2 of the 4 properties at a significant loss. However, 2 remaining properties I can't sell, even bellow my equity in it. For example the number 4 property is a hilltop modern beauty. amazing views, premium neighborhood.  I paid $1'025'000 for it, then upgraded it. in summer of 2022 it was appraised for $1.15 million. 

    now it is listed for $799k and there are no takers.

    I am facing a foreclosure on both of the remaining properties. 

    I'm still current on my payments but by now all the hope is lost.

    all of my life savings are gone, and now I'm about to have collectors on my back for the rest of my life.

    I need an advice how to navigate through giving up on the properties.

    Dennis

    You will have to save up again.

    And not see this as the end, but look for more cunning ways to begin again.

    I do not do AirBnB type stuff, but you seem to like it (yet it is momentarily down--it will probably come back up again), but once burned!

    Maybe a more cunning way to move forward would be to own a motel, maybe with a very experienced motel business partner.

    Or maybe a Pool Hall, or an LP in a new waterpark, or something like that.

    I've seen hard times crush men, and I've seen hard times make men refused to be crushed and come back X a ton.

    It's all in the mind and the will to keep fighting.

    Many in here have given possible ways forward.

    It would seem wise to focus on building up a pile of cash again.

    Talk to your tax consultant about the specifics of your situation too.....

    Good Luck!

    0Reply
  • Dennis Nikolaev
    Member since 2021 · 15 posts · 4 votes
    3y

    @Scott Mac Thanks for the support. It is encouraging. 
    @Dylan Vargas The numbers were very rosy in 2022. I was gonna make 5k per property in net profit. as a result, I was losing 15k per month. Some wishful thinking on my part, lots of encouragement from vendors and too many investors doing the same. That's how I lost it for myself and my family of 6.
    I don't mind sharing my situation as I don't see what happened as a character flaw. The benefit of discussion is to get an unbiased light on it.

    2Reply
  • Megan Evans
    Member since 2024 · 1 post · 2 votes
    2y

    We are in the same boat.  We made a short term rental investment in Joshua Tree right about the same time.  It's been brutal with real estate prices dropping so dramatically and rents plummeting as well.  I'm curious how you ended up, seems this thread was about a year ago.  Hope you are on the other side, we are likely just entering this phase and need to get a plan in place. 

    2Reply
  • Erika Aguirre
    Member since 2024 · 22 posts · 2 votes
    2y
    Quote from @Dennis Nikolaev:

    it looks like a hopless situation for me.

    I had all of my life savings put in Yucca Vally short term rentals In  early 2022. got 4 nice villas at 20% equity. then 2 things happened: rates went up and demand for vacation rentals in that location went WAY down. 

    I was loosing 20 to 15k per month. I sold 2 of the 4 properties at a significant loss. However, 2 remaining properties I can't sell, even bellow my equity in it. For example the number 4 property is a hilltop modern beauty. amazing views, premium neighborhood.  I paid $1'025'000 for it, then upgraded it. in summer of 2022 it was appraised for $1.15 million. 

    now it is listed for $799k and there are no takers.

    I am facing a foreclosure on both of the remaining properties. 

    I'm still current on my payments but by now all the hope is lost.

    all of my life saviings are gone, and now I'm about to have collectors on my back for the rest of my life.

    I need an advice how to navigate through giving up on the properties.

    Dennis

    Hey Dennis, I know foreclosure might have happened a year ago.Would you mind sharing the outcome of your situation? I would love to chat with you if they did ended up going to foreclosure.  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free