Glen S Etherington, Principal Broker, REALTOR, Paralegal
Third, are you getting the highest rent you can? Rents have risen substantially and you may be able to increase your rent.
Fourth, you may be able to short sale the property.
Help with Any Real Estate Transaction - Buy or Sell
Call me 424-777-9377 - FREE CONSULTATION!
Should you have any questions - please feel free to call me Toll Free: 1-855-TRUST-55 (1-855-878-7855) ext. 777.
President - RealtorÂ®
- Trust Sale Realty -
Residential & Commercial Real Estate
Toll Free: 1-855-TRUST-55
Toll Free: 1-855-878-7855
- We Hire CA Licensed Real Estate Agents -
There are different options available to you:
1) Switching properties - making this your principal residence, renting out your current one. Principal residences have many more options for homeowners - HARP (refi short), DIL (Deed in Lieu), HAFA short sale or regular short sale. Foreclosure and Bankruptcy are the worst - you will always disclose this on any financial application, or employment application, and you won't be able to have any type of clearance
2) Short sale this investment property. Short sales are approved, if the homeowner has a hardship and the offer price is supported by comps during bpo (broker price opinion), ordered by the bank. This might be a good time to talk to a CPA familiar with short sales.
Even you think that you are fine, based on accounting principals you might be insolvent (with the house upside down, and $499 loss per month).
Working short sale is best with an experienced CDPE (Certified Distressed Property Expert), which could be found on http://www.CDPE.com
Hope this helps,
Beachfront Realty, Inc.
I think every conceivable option has been discussed below. Which one you should follow, is really dependant on your personal financial situation and the property we are talking about. If you need specific advice as to market trends and the projected value of this home, feel free to contact me directly.
McAllister Homes Real Estate
If you are interested in finding out if you qualify for a loan modification, rate reduction or principal reduction, I do have a contact with a Law Firm who will check with your Lender to see if you qualify and give you an answer within 2-3 days, for free. Even though less than 25% of all homeowners qualify, it is worth checking! Let me know if you are interested!
Your best options will depend on your financial situation as well as your life goals.
If the monthly loss is too hard to bear, then your choices are three: 1) sell at a loss 2) try to short sale 3) walk away and let the property go to foreclosure
If in fact you can hold on awhile longer and can financially afford to do so....I would suggest evaluating whether you are charging enougbh for rent and if there is any way to nudge that up a bit.
Please let me knwo if I can do anything to assist you.
Glen's first answer below is the best advice. ALL of your options need to be reviewed based on your individual circumstances by at least a CPA and optimally a tax lawyer.
DO NOT spend your time on Trulia trying to piece together a solution to your individual issues - you need to speak with a CPA and/or a lawyer immediately to discuss your best options! Involve a RealtorÂ®, if applicable, once you have a plan identified.
Unfortunately, by converting your primary residence to a rental you have introduced a new variable that changes both your options and their ramifications.
For example, the Federal Mortgage Debt Relief Act of 2007 allows taxpayers to exclude income from the discharge of debt on their PRINCIPAL RESIDENCE. Therefore, should you Short Sale/Foreclose this property any debt relief amount would be treated as income to you ($130K by rough estimate using your numbers above). CAâ€™s â€œtax biteâ€ is in line with the Federal law. There is discussion of a Federal extension of the Debt Relief Act of 2007 to 2015; however, I personally would not bet my next tax bill on it.
Again, seek professional tax and/or legal advice.
P.S., you should also look into the feasibility of raising the rent on the condo after performing a rent survey of similar property in the area. Distressed property foreclosures/Short Sales have put upward pressure on rents as displaced owners find new housing.
Check out my blog on this topic at
Certified Short Sale Agent
Keller Williams Realty
One Atlantic Ave.
Ocean City, NJ 08226
The easy answer is to short sale it. It looks like 2012 is the last year the government is going to forgive you and not get 1099'd on the loan amount that is forgiven when you short sell.
If you believe in the real estate market, and think that long term this condo is going to appreciate, keep it. Can you handle the -400 monthly cash flow? How long ago did you buy this condo? and how before it is paid off?
Over the long run, the balance on the loans is going to go down and the value of the condo (and rents) will appreciate. You should have this condo paid off by the time you are ready to retire. If you short sell right now, you get rid of an asset that is costing you but that point of view is somewhat short sided. Will you have enough money in a few years to buy a rental? if so, will you have enough for it to generate a positive cashflow/
Say you bought it 6 years ago= 24 left on your loan. Maybe the next 8 years you go from -400 to -100, then the next 8 years from -100 to +200 and the rest of the 8 years you are +500. Over the long run this asset is going to recover the value, and so will the cash flow, worst case scenario with repairs, you are breaking even. You basically had a tenant pay for your retirement. who cares what the value is now? It will be paid off...
Are you one of those that looks at the 401k balance daily? Hope this analysis helps
Hector R. Gastelum
Realty Executives Dillon
I specialize in helping people that are in your situation to look at their options.
I am not sure how much you know about short sales, but you might be a perfect candidate.
To give you some advice, it would help to know the following:
1. Who are your loans with?
2. How many loans do you have?
3. Are you willing to miss a mortgage payment if your lender requires it to complete a short sale?
4. Are you having trouble paying your bills every month, or not?
5.What are your future financial goals?
If you want a detailed answer immediately, you can email me the answers to
email@example.com I would be happy to advise you in further detail.
For the most party, you really only have 2 options:
1. Look into the option of a short sale
2. Just keep paying that mortgage and wait until the numbers get better many many years down the road.
Keller Williams Realty
"Helping Hundreds of Families Avoid Foreclosure"