All Forum Posts by: Robert Haworth

48 y.o., seller in Elridge, MD 21075 bought the property for $102K in 1994 and still owes an undetermined amount on it. He said, however, that he is “upside down”, so he must have re-financed once or twice enroute to a total current tune of some $210-215K. The current FMV of the property (by both Zestimate and his guess) is $203K.

He claims to have fallen behind in his payments 2-3 years ago as a result of divorce and one year spent unemployed. He sent the lender several “good faith” payments – it demanded those payments before it would consider working with him to get himself current. The amt. of the payments was almost $6K each, to a total of $23K. However, communications with the bank were slow and uncertain and as a result they kept tacking on late fees and penalties which ate up a good portion of his good faith payments, such that he is still NOT good –in fact he’s 90 days and some $18K in arrears. His mortgage interest rate is 9 percent. His credit score was 510 “the last time [he] checked”. Bank recently told him that it plans to mail him soon a Settlement in Lieu of Deed (essentially, an instrument of consensual repossession) to get him out, which would be executed sometime in early 2014.

Despite making a good salary, he despairs of ever being able to get out from under the property and just wants out. The basement floods during heavy rains, and to fix it, water control companies have quoted him amounts he can’t pay. No bank will touch him b/c of his credit. He sees his best chance as walking away from the place under the terms of Settlement, and taking the add’l credit hit for this, but being able to start fresh somewhere else.

ACTION: I asked him to email me a few-sentence summary of what he owes, what the current state of play with the bank is, etc., and told him we’d look at the numbers and see if there was a way to help him.

He has plenty of motivation, but negative equity. You need both. Any ideas?

I'm hoping to find landlords who rent property in Pottstown, Montgomery County, PA. We'd like to get an idea of the demand for housing. We are considering buying a house there and want to know of the plusses and minuses of operating there: tenant pool size and quality, administrative burden from the Borough, inspections. Are there any show stoppers, or anything that is onerous?

$145,000

PA Investors:

New to the area and plan to take a windshield tour of Pottstown, PA neighborhoods. We checked out the area in 2005 and thought it looked a bit shabby,

We are experienced landlords looking for SFHs, twins, rows. Around 100K max. Is the 2 percent rule reachable here?

Are there any no-go areas?
What's the general tenant quality?

Strength of Demand?

MD Investors:

New to the area and plan to take a windshield tour of neighborhoods adjacent to the Balto Beltway --- Arbutus, Linthicum, Halethorpe, etc.

We are experienced landlords looking for SFHs, twins, rows. Around 100K. Is the 2 percent rule reachable here?

Are there any no-go areas?
What's the general tenant quality?

Strength of Demand?

Criteria:

• 3-4 bedrooms
• 1200 plus sq ft
• Basement
• Twin or town house
• Plusses: 2BA, garage or OSP, gas heat, condition Avg or better

Can settle quickly for cash, looking for several properties. Would consider buying in bulk from tired landlord or similar.

What do you have?

Hello:

I am considering converting the brick 2-car garage at one of my properties in Phoenixville, into a 1BR/1BA rental. 320 s.f. total, loft-type BR, baseboard heat, full KTN minus D/W, laundry equipment. Will have all new windows & doors, commercial flooring, peaked roof, int. done very tastefully, exterior fixed up and new street-side wall installed in place of wooden sliding garage door.

It's a tidy studio size for students, local workers, etc. How much rent would it likely bring?

I know about a 1959 4/1.5 split 1500 sq ft with single garage, in 08083 Somerdale, Timber Birch neighborhood, Camden County. ARV = 205,000. Grounds/exterior excellent, needs 15k in cosmetic rehab only, avail 1 Feb.

Question: I can run the numbers, but does this sound attractive to a wholesaler?

How do I buy the following house the right way?

End-unit twin in Phoenixville, PA 19460 was on-market in Spring 2013 for $139.5K in challenged condition. Sat for 260+ days, moving on and off. Believe seller got tired of showings that never led to acceptable offers b/c he is upside-down on it as it sits. Owner owes $130K on the (first and only) note but doesn’t want to short it, likely due to expected impact on his credit. He also cannot bring more than token money to the settlement table.

ARV is $170-175K, repair est. $32K. Calculated my initial offer at the time at $91K and MAO at $105K.

He and his family lived there for years, then moved many miles away in Su 2012 leaving one college-aged daughter to contend w/broken-down KTN, peeling paint, broken plaster, bad floors, missing interior doorknobs. I think we can assume some emotional investment.

House is spacious and fits my rehab and rental criteria nicely. It is currently off-mkt again, and has been for some months (his frustrated agent walked off the job).

QUESTION:How can I help solve Owner's problem? Can I offer him money over time? I can't put in a tenant right away b/c house can't get U&O permit until the bulk of the $32K in repairs is performed (3 mos.). However, if owner would agree to defer accepting money from me (except for the L/O fee up front) until I had it ready, that may work. Don't want to become his "rehab partner" and divide the profit b/c there's not a lot there, AND it would involve selling the prop to some 3rd party, but I want to keep it.

Suggestions? Does he have no alt. to a short?

Seller shorted a townhouse in PA, accepted an offer, bank dithered for 9 months; bank acceptance still pending. Planned settlement date is 15 January 2014. Buyer is supposedly strong and has cash, willing to raise offer is bank balks.

What can I offer to convince bank to replace this buyer with me, short of outspending him? Banks agent is of course not disposed to deal with anyone but current buyer (bird in hand syndrome)? Presume we are both investors with no contingencies, etc.

Suggestions?