Owner Finance Nightmare!
Ok, I've been investing in real estate for many years and thought I'd seen everything. Nope. I'll try to keep this short, though it is a LONG story!
1. Owner financed a rent house to a nice couple about 3 years ago. They made their payments on time like clockwork.
2. Last year, the husband gets arrested due to a dispute with a neighbor (a gun was produced and fired off).
3. Couple uses house as collateral for his bail, and bail bondsman places lien on property (without my permission).
4. Couple leaves the state to get away from neighbor, and lets 'Friends' move into house (without my permission).
5. Neighbor moves, so Couple decide to move back into house, but 'Friends' refuse to leave (they'd paid no rent and water & gas shut off).
6. 'Friends/Squatters' threaten to make trouble for husband since he is dealing with pending court case on his charges.
7. Couple backs down, and stops paying mortgage, taxes, insurance; want me to take the house as they can't afford to make payments.
8. Couple signs Deed in Lieu of Foreclosure, and I convince bail bondsman to release his lien in order to get house back.
Now I've got the house back, got the taxes & insurance current. So, the 'Friends/Squatters' are now my problem! I served 30 Notice to Vacate, we go to court soon. It took over 2 months to get to this point, as courthouse was closed to eviction cases until recently due to the pandemic! In the meantime, the 'Friends/Squatters' have been selling off the appliances from the house! Hopefully, I'll get eviction judgment and put these lowlifes out, at which time I'll evaluate the condition of the house, make necessary repairs and find another buyer. This time, it will be a cash deal! Haha!
Let this be a lesson for anyone who thinks owner financing is a completely passive investment! It is...until it isn't! Thanks for listening.