Advice Needed for Rental Investment Property

[Danielle Campo]

Hi BP fam! I had a predicament with one of my properties over the last year and a half where, long story short, I had tenants who signed a a 12 month lease for my SFH, moved in, paid rent for two months and then didn't pay a dime towards the rent for the remaining 10 months of their lease terms. Because NYS favors the tenant, I didn't have a leg to stand on to get them evicted. By the time the lease terms had expired they moved out, but not without leaving the home a COMPLETE wreck and taking the ENTIRE kitchen with them. So not only was I out 10 months of rent and having to fork over the mortgage payments OOP for those 10 months, I am now stuck with renovating the kitchen and fixing up the parts of the house that were destroyed. All of this has left me in a deep financial hole. I am in the process of working with a contractor to fix the kitchen, floors, etc and am hemorrhaging money left and right. My question to you all is, do you think it's possible to apply for a 203k loan and then wrap the renovations in with the mortgage and then continue to rent it out? I'm trying to stay hopeful that I can continue my journey in real estate investing but I won't lie, this whole experience has dimmed my light a little bit. My other option is to cut my losses and sell the house once the renovations are done and pay off the debt I'm in and try and keep a little on the side to purchase another property. However, given the current economic climate, real estate climate, mortgage rates and the low rate I currently have on the home ( 3%) I'm debating on whether I'd even be able to purchase another property and have it be a good investment. This property is also in a VERY up and coming area of NY where obvious gentrification is occurring. They built up several shopping center and overall the area is it's getting the attention of a lot of people moving out of NYC therefore the prices of the homes in the area are slowly rising. I know that over time the value of the home will exponentially grow but all this situation has left me in a deep financial predicament and unsure of what to do with the home. ANY advice is GREATLY appreciated!

THANK YOU!!

[Jason Wray]

Danielle,

Sell the house avoid the court costs and do not buy in NY instead look into states like Indiana, Ohio, Florida, North or South Carolina as an exmaple.  These states offer better cash flow properties at a fraction of the cost, lower taxes, less of the renter hassles.