All Forum Posts by: Glen Smith

Colleen thank you very much you are so right now is the time. I'm exploring all these possibilities and thank  you for your thoughtful advice.

Glen

Sue Kelly thanks but fortunately I'm not in bankruptcy condition. I have just been stuck in this deal right out of the gate and unfortunately have kept my line of credit tied up all this time trying to swim up steam and keep it going as I had hoped to increase my chances of shrinking my loss and move on. I am reevaluating and exploring all options including these post on BP to force me to either locate someone credible enough for me to take a chance on again who can put a reasonable amount of skin in the game and has a high probability of getting me to the  finish line. If not than I will have to except my loss and move on with the knowledge that I have gained a great deal of education and use it wisely in the future. But at the very least I am meeting myself where I am and doing what needs to be done at this time. I am down but not out.

Thanks

Andrew I can understand your curiosity for wanting to know the name of the company. I don't think it serves anyone well for me to mention that because my purpose here isn't to speak negatively of the company but to find a creative solution that can possibly lessen my losses and close this chapter of my life. Although I don't think I got a fair enough deal for the services I contracted for, no one bent my arm and made me do it. In the end they had a business model I bought into it and it didn't work out. Investing in real estate will always have risk no matter how well protected you may think you are. Although my real estate investing derailed before I even got started I have gained a wealth of knowledge and hope to enter again when this is behind me.

Jassem I take full credit for getting into a bad deal. As it turns out I did pay too much for this property along with not being able to get it repaired for the estimated cost I was presented with. I also did not get the qualified tenant to do the rent to own/ lease option exit strategy that I hired the full service company to provide. And since I used a home owners line of credit along with a portion financed by the company's networked private money lender and couldn't achieve the investment's exit strategy things went South fast. Add to that the housing bubble that shortly erupted and some bad tenants and it was a terrible first entry attempt to gain experience in real estate. If  better qualified tenants had been available and the market hadn't crashed so soon into the investment maybe I could have exited out of this deal without a loss but the odds were against me form the start. I went into this deal with the exit strategy of a short term investment with the comfort of knowing I hired a company to help me achieve it and we could all win. I'm not trying to complain, the house is empty fully renovated and I'm just trying to cut my losses.         

CK Hwang great advise. My biggest problem is that I financed the investment property with a line of credit from my own home of residence including having to pay for repairs and covering expenses along the way or out of my own pocket as money allowed. Obviously I'm in trouble here and all I can do is to try and be as creative as possible to limit my loss. My main concern is to get my line of credit against my home paid off which will require me to take a loss no matter what because my debt to value of the investment property is negative and I will have to pay the difference out of savings. If I didn't have the debt against my personal home through a line of credit I could come up with lots of options like owner finance or land contract or the things you suggested but that would leave my place of residence at risk since a line  of credit is nothing more than a variable credit card and interest rates may be on the rise in the near future. So I really need to find a way of selling this home for the best sale price in order to apply that amount against my line of credit to see my total loss I need to cover.

Jassem I'm not sure that you read my entire article but you seem to be missing my point or maybe I'm not explaining my situation clearly. I don't want to keep the property now or did I intend on keeping it long term to begin with. I don't have a mortgage against the property in question and I know what the property values are in Harrisburg. I offering my situation for the experienced investors to help teach the lesser experienced investors on how to get creative when you end up on the wrong side of a bad deal. As for taking a loss that's was the whole point but to try and reduce that loss.

Thanks

Matt Rosas thanks for your reply. I purchased this property from a full service wholesaler and yes I am going to post something to Craigslist as soon as I know the best strategy to advertise to try and limit my loss. I'm looking for creative scenarios or solutions to decrease my loss. I know my best bet would be to place someone in the home as a home owner if possible to get the most money out and apply that back to the line of credit on my home which financed all the debt against this property. The property itself is free and clear and I understand I could sell fast to a wholesaler but first I need to try other options in order to limit my loss before I sell to the most generous wholesaler.

Gautam these circumstances could apply to war zone anywhere USA. It's the creativity and terms I'm hoping to apply to limit my losses by maybe placing a home owner in this property. But since you were kind enough to reply and I thank you my war zone is Harrisburg Pa.

Thanks 

In short five years ago and a few years out from retirement I decided to learn about real estate investing so I could be prepared to get more heavily involved upon my retirement. Although I learned some from a friend and the internet I wasn't ready by myself to put my toe in the water just yet so I contracted with a full service company to hold my hand and reduce risk until I had gained enough knowledge and confidence to go solo. I purchased a home from this company using a line of credit against my personal residence and not wanting to be stuck in a long term buy and hold I was advised to do a rent to own strategy for one year and sell to the renter at the projected higher price based on the renovations estimated by the company and submitted to the appraising company for a final ARV.

So I contracted with the company to find and manage the construction company, screen and place a tenant and advise me throughout this process. Well the deal went South fast with none of the contractors being able to do the renovations for the estimated cost and no suitable tenant could be found which delayed the project that much more and added to the over all cost. As I later learned my property was on the fringe of the war zone which later was absorbed into it when the housing bubble burst and my investment further deteriorated. After much frustrations and anger I eventually settled on one of the contractors that the company had provided but took over managing the contractor and placing a tenant just to stop the bleeding. Five years later and all the  damage from bad tenants and the hope that the market would get better have only made a bad decision much worst.

As I have stated this investment was made using a line of credit against my place of residence and I have since retired two years ago and need to except my loss. If the feds increase interest rates my situation will only get worst. I have learned a lot along the way but I'm stuck on this merry-go-round and have to get off. Any advise from the seasoned investors on how to creatively lesson by loss would be greatly appreciated and I hope by sharing my situation newbies and experienced investors alike will double their efforts on due diligence when doing every deal no matter how much you think you have limited your risk.

Currently the house has been vacant for the last five months after suffering another bad tenant who's salary is currently  garnished to pay for damages. Although the home is currently turn key I'm waiting to see if anyone from this forum can suggest a plan for a possible reduction in loss. Because of the length of this post I have not provided any figures or values but if someone is willing to brain storm on my behalf I will.

Thanks Everyone