Hello everyone. Maybe i feel like everything that l do is wrong because when something goes wrong is kind of hard to face the problems. One of my only two properies that l have recently went vacant,they left one month earlier do to Harvye,l have a property managment and he said that it was going to clean the house and have it ready. WELL,for some reason l forgot to pay my insurance on the property tinking it was due later this year,,so gess what...wrong. so now the house needs around 5k in repairs don't have the money haven't pay the mortgage need to buy the insurance and the manager bearly put it in the market for rent. Ican't get a loan from the bank for low credit score,so if anybody have any sugestions please let me know.
Im sorry to say that it sounds like you cannot afford this home. IF you can't afford the repairs, the mortgage or the insurance, i think your best bet could be to sell. THere will be a lot of people looking to purchase a home in Houston since so many were destroyed completely.
Are the repairs essential to getting it rented? If not, you should be able to get a tenant in there very quickly since so many people have to move due to Harvey. Maybe you can minimize the repairs done now, pay the morgtage and insurance,
Just a thought, If not, sell!
Best of luck. Sorry you are going through this.
a few ideas pop in head...
- get a heloc if you have equity
- tap into credit cards for short term
- contact family for private loan
- contact mortgage company and ask for differed payments for short period of time due to Harvey; might go nowhere or might give you a couple months to get together
- do the repairs yourself and/or with friends for less than the 5k
- put it up for rent at a lower price to place someone asap
Thats a recipe for disaster right there. As a rule, you should never buy a house if you don't have at least 10k for repairs. I'm not suggesting you need 10k for each house. But you should have at least 10k. Doesn't even have to be 10k. Can be a credit card or something.
But there's nothing you can do about that now. You own a house that you probably can't rent because it needs 5k in rehab. Without rent, you can't afford to pay the mortgage, taxes or repairs.
So that leads to one thing. You'll continue missing payments and the bank will foreclose.
To me, you need to find a partner on that house. How much do you owe on the house and how much is it worth? Thats going to determine whether you can go down that path.
But lets say its worth 100k and you owe 70k. And lets say when a renter is paying, you're making 300/mo. Find a partner that is willing to put up the 6 or 7k you'll need to make the repairs and pay the insurance and bring the mortgage current. Make them 50-50 partners.
Then start saving some of those rental profits for at least the next 6 months until you have something in the bank to cover future repairs and turnover/vacancy.
Provided you have some equity in that house and you're getting decent rental profits every month, I think you can find someone that would throw in 6 or 7k to be a 50-50 partner.
While that may sound like a lot to give up, the reality is that at this point, if you don't get that money, you're going to continue missing mortgage payments and eventually lose the house completely. Not to mention destroy your credit and any chance to continue investing in any more houses for quite some time.
50% of something is way better than 100% of nothing......
A couple of other quick alternatives I'd throw out there:
1) Sell the house as an investor special. There isn't much inventory out there. And I'm guessing everybody is looking to guy what few houses there are on the market there in houston - no matter what condition they're in.
2) Put an ad up for a renter that says handyman discount. Discount the rent a couple hundred dollars a month in return for him providing free labor to repair the house. You'll still need to pay for the materials but that buys you some time over the next year to hopefully stay current with the mortgage and insurance and get the thing fixed up a bit - maybe with the help of the other investment property's rental income?
You must NEVER depend on collecting rent in order to pay your mortgage. You need to always have cash reserves. At least six months mortgage payment, six months rent is better.
If the house was flooded by rising water regular insurance won't pay anything. Only flood insurance.
Because you have a mortgage and let your insurance lapse, the lender has likely put a "forced place" insurance policy. You might check your records and see if that's the case. For that matter, are you sure your lender isn't escrowing for insurance?
Honestly, at this point I would sell if possible. Even it means agreeing to take a promissory note for a payoff shortage.
Sorry to hear about your difficulties. I would also sell in your situation. Lots of investors look for this kind of opportunity, so I'd suggest taking some pictures and putting it on the BP Martketplace page for starters...
I don't know
Much about real estate , but I would look for someone handy who needs a place to stay give them a percentage off the rent in exchange for fixing the repairs on the property.
You can't afford it so I would suggest selling it before you end up in more debt and a possible foreclosure. Then work on improving your credit and save up for another property. Next time have a cash emergency fund before buying.
Hello everybody! l thank you all for all the suggestions. l also wanted to sell but a friend of mine who is a broker helped me out to get it ready to rented it.So , from there l will pay the ins. and the morgage, and like they say.....we learn from our mistakes. .l'll keep in touch with you guys. Thank you once again.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you