All Forum Posts by: John Slater

For a couple of reasons.

You can't get blood out of a turnip.

He states: "I am facing a foreclosure on both of the remaining properties. All of my life savings are gone."

He has no money. If he is successful on one short sale, there is no guarantee on the second. He has other creditors who are going to start going after him. He hasn't stated, so we don't know if any of the loans were recourse. That would be very bad. Obviously he has tried the best thing and that is to sell. That isn't working. From an asset preservation point of view he stops making payments immediately. Bankruptcy saves the lenders from losing even more money during a prolonged foreclosure. It puts the inventory back into the marketplace much faster. Few know this, but you can still negotiate with the bank in bankruptcy and some people end up keeping their property. All collection harassment stops by law giving him relief. 

If he doesn’t file for bankruptcy and holds on for a little while longer while getting the 1st short sale and then is forced into bankruptcy anyway, it is conceivable the trustee will seek a "claw back" on preferential payments complicating both his and his previous lender's life. And so on.

A single short sale (in this particular scenario) simply puts a band-aid on a severed foot. We want him healthy and whole and productive. As long as he is in this situation he can’t possible get to that point again.

But, I may have missed something. ;-)

As far as lenders go; a foreclosure, short sale, bankruptcy or deed in lieu are treated the same. Someone didn't get all of their money and that concerns lenders.

It seems you have done what can be done and now it's time to ask the question of where do you want to be in a few years when you recover.

If you do a "strategic" bankruptcy (just a fancy way of saying starting over and doing better next time) you can be back in business debt free with bad credit and no creditors hounding you. Talk to an attorney. It's all totally survivable.

It will take 90 to 120 days to go through the process and then you can start rebuilding.

Banks won't lend to you in the future until you clear the deck and rebuild your credit anyway (usually through small loans at first and secured credit cards. It isn’t easy but it teaches discipline and gives you another chance.

Don’t give up, just understand how the system works.

 is it short sale agent or short sale attorney?

what do I do with the agent I have e now?

@Wayne Brooks 

Is it okay to buy pre-foreclosure homes? The home is relatively new so I’m not too worried about the damage inside (hopefully). Yet to see home though 

what would be challenges in going through conventional loan? Would the current owner’s lender give any challenges?


would there be any existing liens? 

Hopefully, I don’t need to evict or deal with emotional distress from the owner or family while they vacate home. I empathize with them but wants to make sure I’m not putting myself in trouble. Any thoughts on this would be appreciated 

it looks like a hopless situation for me.

I had all of my life savings put in Yucca Vally short term rentals In  early 2022. got 4 nice villas at 20% equity. then 2 things happened: rates went up and demand for vacation rentals in that location went WAY down. 

I was loosing 20 to 15k per month. I sold 2 of the 4 properties at a significant loss. However, 2 remaining properties I can't sell, even bellow my equity in it. For example the number 4 property is a hilltop modern beauty. amazing views, premium neighborhood.  I paid $1'025'000 for it, then upgraded it. in summer of 2022 it was appraised for $1.15 million. 

now it is listed for $799k and there are no takers.

I am facing a foreclosure on both of the remaining properties. 

I'm still current on my payments but by now all the hope is lost.

all of my life savings are gone, and now I'm about to have collectors on my back for the rest of my life.

I need an advice how to navigate through giving up on the properties.

Dennis

Does anyone have experience buying Pre-Foreclosures for their flips? 

I'm interested in any suggestions about staying organized and potentially streamlining the process. For example, how many houses do you inquire on and when do you know to focus heavily on a specific one? 

The borrower bought the property with seller finance and then lease-to-own to the current tenant. The same borrower holds the title. The same borrower owes me money.