All Forum Posts by: Amie D.

For a lease with option to buy, you would still need a property manager if you were out of state, correct?

Yeah I'll suggest all of these things to her (except me taking it over subject to, unless the numbers work out).

I have more detailed information. She actually pays $1090 a month, that includes everything, on a 30-year, not including the HOA, which is is $150/year. It appears she did not buy the house in 2011 (I did not get that information from her, it was from zillow, so maybe she refinanced or ? ), she bought it new in 2007 for 141K. So yeah, also seems accurate that values have dropped since she bought it in 2007.

So renting it I don't think would get her anywhere anyway even as a consideration, by the time she paid 10% property management, 1 month's leasing fee plus standard maintenance costs incurred as part of maintaining a rental home, she wouldn't be better off than she is with the current occupants living there, which she says she can't afford. Plus I noticed she has a homestead exemption on the house still, if she officially rents it and that falls off then property taxes would also be based on a value about 1/3 higher than now.

A house recently rented that is located nearby in the same subdivision, same beds/baths, but is almost 300 sq ft larger (hers is 1291) and backs to greenspace rather than a trailer park for $1300.

These numbers also don't work for me taking it over subject to.

So pending on how much she can afford to lose or risk, I'll let her know what's been discussed here after I firm up some #'s with a few calls tomorrow.

Thanks!

@David Weiss, I don't think buying another house in two years will be an issue for her. She doesn't ever want to buy one again after this episode. Also now she lives in LA, and whatever job she has doesn't pay much, so even affording one out there would be an issue anyway.

I think her money is very tight right now. Her total payment is $1200 a month and her ex- and ex's Mom are paying $800 a month and she said she's having troubles paying it even with them living there at that rate. So if they move out - she can't pay is what she is saying. I think the OF option you presented is great for you or I, makes sense, but I don't think she would be willing to take the risk on it. The other factor is she is done with that house period, owner financing would mean she still would have something to do with it long term, which she really isn't willing to do I don't think. If she is willing to foreclose just to get rid of it... that's pretty extreme.

Probably what she should do then is sell at a loss... that would put her at selling at market right now, unless under market, but would sell faster, yet I don't know how much she could afford to lose on the mortgage since her money is so tight. If she can't sell it that way, I guess she would have to short sale. She would also have evidence to the bank that the house has not sold in x amount of time at current market rates, which are under what she owes.

The current occupants have said they are moving very soon, which is why she is panicking. It was an informal agreement- only her name is on the deed, but she used to live there with them and they split the total payment - so they don't even have to give 30 day's notice and there's no management in place to handle things if they move or find new tenants, not that she wants to be a landlord anyway.

I'm thinking that the best route for her would be to sell at a slight loss to what she owes on the mortgage or do a short sale. The other reason I think this may not be the best investment for myself is there is still a lot of inventory around here that I could pick up for less.

However, buying it for no money down as @Rob Powell referred to and being able to rent it right away is definitely appealing. I just would want to see the numbers work, and right now it doesn't look like they would?

I'm going to call some property managers tomorrow and an agent I know to confirm some of the #'s I was seeing yesterday for rents and property values.

@Steve Babiak, yes I did use that formula, which is why I said it's a very rough estimate. But I did some checking a bit ago and it looks like that price and range is pretty accurate for that neighborhood. The other thing that would need to be factored in is there is an HOA in that neighborhood, I don't know what the fees are. House built in 2008.

@Derek W. , yeah I know, I thought of that too, but though I expect the area to improve - somewhat - it wasn't doing great before the recession hit and so I don't expect things to exactly skyrocket as in other parts of the country. If this property were in Seattle... Denver... Phoenix... I would have said yes already. The area is in a better neighborhood and school district, but overall is located in a mid-sized town in Indiana, market nothing like CA, where I bought low and sold high before (my first house actually). I don't live here full time, I am just back helping out my Mom for now and my friend from high school and I both grew up here, so I'm not as familiar, but have looked at buying here in the past because houses are so inexpensive, so have been tracking things on and off.

@Rob Powell, I really like this idea, esp with no money down, and I know she would do it. However getting rent at $300 above the mortgage would probably be a stretch. That would put the rent at $1500 a month, whereas market for selling it right now on a rough guesstimate would be 120-130K. This would put the rent (very roughly) at 1200/1300 per month. That being said also, the house backs to the trailer park and I don't know that the comparably sold houses do, so it may sell/rent for less due to that. I need more research obviously, she just came to me with this today after seeing pics of my last rental that I posted on Facebook, but this is my rough estimation.

I am also not sure about doing a subject to sale in which the current mortgage is already more than what is owed on the house? She said she owes "well above 130K" on it now, according to records she bought it in October of 2011 for 141K. She also says "my mortgage is terrible I have to pay $1200 a month" so I don't know if that means her interest rate is also high because credit or other issues (no idea if hers is good or bad). It seems like the payment is high (unless she got a 15 year mortgage?) as property taxes in IN are not that high.

@Larry Roberts , I could suggest that but I really don't think she wants to be any sort of landlord at all. She now lives in LA and the house is back in Indiana. She has no experience in owning property and at this point wants nothing to do with the whole thing anymore.

Someone I knew in high school contacted me recently as she is desperate to sell her house, to the point she may just foreclose to be done with it. She asked me if I would or knew anyone who would would be willing to just buy it to take it off her hands. She's got an ex and their Mom renting it now long distance but they are not paying the full amount of the mortgage and they may move out at any time, and she already can't afford to pay it as it is. She is current on her payments so far, but really wants to get rid of it, doesn't want to be a landlord.

The house is in a decent area, but backs to a trailer park.

However, what she owes on the mortgage is just over by 5-10K what the house's market value is right now (didn't do an in-depth analysis, just from what I could find from comparable sales online), so I don't see any real investment opportunity here?

Houses in this region are still sitting on the market for a long time though and she doesn't think she would be able to afford that esp since the current renters are moving out at any time. I'm thinking I should advise her to just sell at a small loss or consult the bank about a short sale?

Gerald David, actually I'm in Bloomington, IN right now. I'll check at the Color Tile.

Roy N., that sounds great, but I don't know any around here, because I normally don't do the work on my rental houses. I decided to do a few things this time because I was nearby visiting relatives, and also wanted to check on the condition of it (I am GLAD I did that, because the manager had the house looking TERRIBLE.) I checked with local stores, but no one had smaller remnants unfortunately. This is a college town and everyone is getting their rentals turned right now... As a side note, there's also a Re-Store locally, but they are out for the same reason.

Gerald David I like that you don't have to remove the toilet though, as that is a time/money saver for the next time. Is that feature specific to this product? How have you found the durability of the product? There is a Colortile here in town.

Gerald David, how is this product different than regular floating sheet vinyl? Thanks!