What will you do with two dead ducks?

12 Replies

I have two houses in Puerto Rico that I can't think of no exit for the next 5 to 10 years.

One I own free and clear but it is located in a non desired area. On top of this, the way it is constructed makes it hard to get conventional financing so it can only be sold to a cash buyer. I have rented in the past but it has been vacant for the last 5 months.

The other is a condo that it is currently rented and I owe half of it. It is currently rented but I will love to find a creative way to get rid of both of this properties.

What makes the exit hard, is the current economic situation of Puerto Rico, Government Bonds were classified as Junk bonds and most of the people in the Puerto Rico are employed by the Government.

The current trend is a sharp decrease in population and unemployment well above the double digits. There a hundreds of vacant homes and rents are at all time low.

I have offered seller financing, made attempts to swap my house for a house, land or even an RV in the US but no luck. I can not even take the equity out by re financing since no bank in the US will make the loan.

I have offered Agents $5,000 bonus on top of the commission for the sale, attempt to rent it as a vacation home, etc..

Has anyone found themselves in a similar situation and found a creative way to get rid of a house?

My current strategy is to buy more houses to make up for the negative ROI but it really sucks to have two properties making you no money.

I need a brilliant Idea to turn this around since I have run out of them

James said it. Or, do an absolute auction on the one that you own free and clear. Take whatever you get out of it and pay down the other and then dump the other one.

Originally posted by @Bryan L. :
James said it. Or, do an absolute auction on the one that you own free and clear. Take whatever you get out of it and pay down the other and then dump the other one.

Were can I find out about, how to do an absolute auction? what platform works best? thanks Bryan

@Luis Montanez - The rules for auctions may be different in PR. You can probably start by speaking with a broker down there.

Hi Luis

What was your planned strategy when you acquired the properties?

Originally posted by @Brooklyn R.:


Hi Luis



What was your planned strategy when you acquired the properties?


 

I had no strategy since I did not even know what a “real estate investor” was at the time; all that I purchased my first house when I was 19.

However now that I know a little, I will say that I have always acquired houses with the buy and hold strategy in mind.

The Condo I got when I was 23 (11 years ago) I had just got back from Iraq, had some tax free cash, and this condo was my bachelor pad right in front of my college, I had roommates and they paid for the mortgage the hole time. I just hate paying rent.

The other was an inherited house that I purchased from the family over a period of 5 years with no interest. I also lived at this place for about two years.

I no longer live in Puerto Rico and the rents are not sufficiently high to have a property manager and properly maintain for this houses. This assets are dead money on my balance sheet.

What about a package deal? Sell both properties for price of the condo. Have the buyer give you a cash down for the deeds and let them take over the condo payments.

Elizabeth Colegrove: Thanks for the suggestion. My current vacant house, I have attempted to rent it as vacation home but the location is not ideal for this market. Since it is not located within close distance of the beach (this is the first thing potential customers ask).

I have also attempt to trade my "free and clear" house with another that is near the beach. (currently a work in process).

I have never had a problem renting out my condo, since its location is near a well known medical and law school. I only rented to people that are attending this college and once they are in they typically stay for the entire 4 years .

The problem is that to attract this market to my condo, I have to keep competitive rents and currently there is a lot of "non-real estate investors" that rent their apartments at a rate high enough just to cover their mortgage (i.e. I currently make no profit).

Thanks for taking the time to respond
Kristine Marie Poe: Thanks for the idea. I think this will work best if the properties were close to each other (they are about 40 miles apart, in Puerto Rico that is equal to 200 miles in the States).

However, I will suggest this to my broker so it is advertised as such. The main problem in PR at this time is that most home buyers are either leaving the island (due to the current economic condition) or are buying brand new homes at a good price (i.e. large supply). My ideal buyer will be someone that has lived all of their working life in the US and are now seeking a retirement home (I do post on craglist in different states to attempt to attract this market)

Most RE investors are buying distressed properties near vacation spots at 30% to 60% below market value... (so if any of you RE investors wish to have a vacation home in PR now is the perfect time).

Thanks for taking the time to respond.

@Luis Montanez

Do the same thing that you did when you bought. Seller finance the house at a really good deal that makes it cheaper than rent and attractive to the buyer.

The condo sell. market to students and their parents at the college. Stress how close it is and how it makes sense for a student/parent and can even have roommates help pay the mortgage. The college might have a housing office or a campus newspaper to advertise the condo.

Thanks for your service.

@David Krulac : Thanks, I have been doing everyting you stated except the "adverticint to the college's housing office or a campus newspaper " thank you for this idea.

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