Let's brainstorm and get out of this dilemma

[Susan V.]

SCENARIO:

Personal credit scores: less than 500

11 rental units; 9 located in IL; 2 in PA; gross rental income: $6360 when 100% occupied

5 currently vacant in IL

1 will be vacant in PA

Current gross rental income: about $2000

4 Units in IL need substantial work (around $100K, but can start and complete 1 for about $25K)

Contractors in IL need to be paid in full: $23K

Total debt for all properties: $240K

Total estimated value of all properties: $273K

LTVs: 69%; 93%; 55%

QUESTION: What would you do to get positive cashflow again?

[Bill B.]

Their credit is already bad. Maybe just walk away? $273k value with $240k owed leaves MAYBE $3k in equity after closing costs? If the debt includes the $23k to the contractors? Otherwise they’re underwater $20k or more. 

Look at the county website and see who owns neighboring properties of the same type unless the entire neighborhood is war zone maybe one of them would give you $1,000 plus pay off debt per building? But make it a take all deal or they’ll stick you with the worst.