Market Conditions in 92612>Question Details

toinspire56, Home Owner in Irvine, CA

Owner of a One Bedroom Condo in the Watermarke. Should I Short Sale or Keep the condo and rent it for $1650 per month? My monthly loss would be $469

Asked by toinspire56, Irvine, CA Wed Oct 3, 2012

Is it better to Short Sale the Condo and or renting? I don't know if the market is improving in Irvine.

I own a one bedroom condo in the Watermarke/ It is 635 square feet and was rented for $1250. per month. It know can be rented between $1550 to $1650 per month. However, I refinanced my mortgage loan and now paying the following per month (Total: $2169)
$1559 Mortgage
$310 HOA
$250 Property Taxes
$50.00 Insurance
Now, lets take a look at the operating costs and the income potential. If you receive $1650 per month in rent your monthly loss will be $469.00 per month. Annual loss is $5,628. Is this a good investment to keep? Should you short sale this property as this property has a burden of $90,000 ( the condo is worth on the market around $194,000 to $200,000 and the amount owed is $280,512).

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14
CRISTIAN CARANICA 949-689-1988’s answer
My office is only five blocks away literally within walking distance corner of Dupont and Michelson so you might want to come over for a confidential free consultation with no obligations.

So if you are looking for someone aggresive to get the job done rather soon and guide you through the complicated short sale process then myself and my in-house affiliate attorney John Morkos Esq specializing in short sale,notice of default,trustee sales have the track record and experience you can count on!

Let's keep it real! Honesty is best policy so I would assume you did have already tried loan mod,refi etc in the event you are self-employed then you already got the answer there is no need to sugarcoated.

Please be informed that we do have a pool of investors and cash buyers who are currently looking for anything that makes sense so if priced right it may take a day or two to open escrow.

Step one: Please do consider the fact that the Debt Forgiveness Act expires at the very beginning of 2013 therefore you only got left 2 1/2 month to make an educated decision to attempt the short sale. Why? Because if you had purchased this condo anywhere before 2007 you are upside down a bunch anywhere between $100,000 to $300,000 and you will be issued a 1099 from your lender/bank for the difference between loan amount and current market value which will become taxable income added to your regular income and possible ending up you owing to IRS SUBSTANTIAL AMOUNTS please consult your CPA .

Step two: Short sale no matter what anybody will affect your credit score for next incoming years I would be more than happy to send you FannieMae guidelines to understand the implications however losing $500 plus a month as an investor would not be an option. If you still have cash saved I can get you into any property with 30% down private hard money loan who does not care about your FICO score or employment history.

Step three: Innacurate info given bellow, at this point if you do go forward with the short sale then you have no worries your lender will pay for your closing cost,6% commissions and in most cases relocation fee paid to you in the thousands.NOTE; SHORT SALE HAS NO COST TO SELLER BANK PAYS EVERYTHING INCLUDING SELLER'S RELOCATION FEES so be informed and alert.
Please also be informed that it is against the law to collect rent while in foreclosure so if you do have tenants my attorney will help you evict tenants

Step four: No need for sign on the property so it can be done confidentially if you dont want to disturb your tenants,remember short sale process is lengthy especially if you have two loans from different banks. If you do have a notice of default then your clock is ticking,if you do have a trustee sale posted on the door my attorney will help postpone it to complete the short sale but if you are within your last ten days then it's game over unless you apply for bankruptcy.

I hope this is enough info for you to diggest at this point next step is to contact me asap to pencil out the listing details.


Best regards,

Cristian Caranica, Broker/CEO

CENTURY PLAZA REALTY
http://www.centuryplazarealty.com

Orange County HQ Office:
2082 Michelson Dr, Suite 100M
Irvine,Ca,92612
Tel: 949-222-2268
Fax:949-313-2992
-------------------------------------
L.A County Branch Office
468 N Camden Dr,Suite 268H
Beverly Hills,Ca,90210
Tel: 424-777-6662
Fax:310-818-5598
-------------------------------------
0 votes Thank Flag Link Thu Oct 4, 2012
Just remember that short selling a property is not a 'right'. You will need to prove hardship in order to get your lender to agree. If you decide to short sale, I would hurry. There is no guarantee the Mortgage Debt Relief Act will be extended. CNBC last week put the odds at 60/40.
Good luck,
2 votes Thank Flag Link Thu Oct 4, 2012
Hi,
The sooner you do a short sale, the better it is for you! I've been helping many homeowners with the short sale and in some cases, I've been able to get money for the owners from the bank depending on the bank, I even got $30k for a homeowner. I am local and I live and work in Irvine, call me and we can talk about it in details. (949) 514-4177 MJ
0 votes Thank Flag Link Thu Feb 7, 2013
okay ,got it. If you had listed and sold your home this year than you would not have to pay tax on short saling to the lender, for more detail speak with your CPA. Now too short a time is left to sale and close escrow this year. So it is different angle. Again speak with your CPA if you decide to do short sale what and how much tax you would have to pay? Tan compare the amount you will have to pay in taxes and amount you are loosing each year , if you wait to sale later day. No one has crystal ball so cannot say when you will break even, so best is to find out # and than talk with agent to make educated decision when it make sense to sale and for how long you should keep the home. Let me know if you would like to meet I would put all different things you can do , which will help you to make decision .call me at 949-433-3825 , i do have a buyer if you decide to sale. I can meet you at your convience time and place.
0 votes Thank Flag Link Mon Nov 26, 2012
I am a short sale specialist and I would love to be able to help you, but I would need more information to be able to answer your question. You may contact me at 714-588-7676 for a private consultation
0 votes Thank Flag Link Mon Nov 26, 2012
Have you decided what steps you going to take regarding your home in Watermarke? If not and still have questions and concerns , call or email
0 votes Thank Flag Link Tue Oct 23, 2012
Watermarke properties are in high demand; I currently have two investor buyers looking to purchase the smallest model (635 sq ft).
Prices are climbing, however you would need to generate a $300,000 sales price just to break even after selling fees, that’s a 30% appreciation and will probably take several years. Let's look at some basic numbers. Let's say that we have an aggressive appreciation rate of 5% over the next 5 years so your unit goes up enough so you can break even. It will cost you close to $30,000... just so you can come out even at the end. That may or may not be a sound decision.. there are several factors to consider, not just dollars and cents. There are credit and tax ramifications that could be factors in your decision.
I am a resident of Watermarke, an original owner and an active realtor with Prudential. I have been through this decision process with clients through 3 downturns of the market over the past 20 years. Feel free to contact me for a more in-depth analysis of your situation and I'd be happy to help you make an informed decision.
0 votes Thank Flag Link Mon Oct 8, 2012
You are not factoring in;
Tax Deductions (don't ask me; I'm not a Tax man)
Appreciation (at 5% per year, you will appreciate $55,256.31 in 5 years)
(and at 7% you will see +$80,510.35 in 5 years)

Good luck and may God bless
0 votes Thank Flag Link Thu Oct 4, 2012
I honestly think that the decision to sell any home or rent it out until prices come back up is a personal decision. To put it bluntly, the choice almost always comes down to "do I bleed a little every month?" or "bite the bullet" and take the loss.

I do think it's important to find out if your bank will even grant you a short sale. Knowing whether they will or won't give you a short sale is an important variable in your decision-making. I HAVE seen short sales denied more than once.

In the end, I don't believe any professional can answer this for you. You must make the decision based on your life, future goals, and finances.

Best of luck.
0 votes Thank Flag Link Thu Oct 4, 2012
Words of wisdom Cindy. I have spent 25+ years in Real Estate and Mortgage sales, inside the big banks and as a small independent. I have seen hundreds of people go through the decision this home owner faces.. You hit it right on the nail...
Flag Mon Oct 8, 2012
Use a local Realtor, to get you the market data that is correct for your property, not only its size, age, but also location, lot size, competing homes etc.
Usually if home owners that are under water so to speak can rent without loss, I usually recommend that solution depending on what they are able to do thereafter, rent another place, purchase what, how much down payment....

Even if considering a short sale (hardship???) what happens thereafter, renting....

There are a lot of questions, a lot of numbers to crunch to get at the end to the very BEST solution for each individual.... Look at Christians response below....

You need to be very honest and put all your cards on the table and look not only at what to do
with your condo at this time, but where do YOU go from there.... and remember if you rent you always MUST consider that it may not always be rented and that you will become a landlord with responsibilities (repairs, collecting rent, rent being late etc. etc.)

Take it slow and get all the right advice you can get, and yes you need an Attorney and a good
Realtor and may be even a good accountant and a lender's advice for your future steps....

Good luck to you, it just is a difficult market for many.
I hope that the experience of an Irvine Realtor can shine some light on where the Irvine market may be going in the next few years.
Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties, 30 Green Bay Rd, Winnetka, Illinois 60093 ---- EdithDoesItRight@yahoo.com or EdithSellsHomes@gmail.com Check out my website at htttp://www.tinyurl.com/MeetEdithHere
get to know me better and learn about my experience, expertise, services available and letters of recommendation of former clients..... Also you can sign up on my site to search for properties in my expanded service area. HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Thu Oct 4, 2012
$1,650 rent is in the high-end, so with the average rent your losses would be greater. You should be very comfortable with the monthly shortage to keep as an investment. Market seems to be stabilizing but may take a while to recoup your losses. Short Sale seems like a better option and asap to reduce your carrying costs.

James I. Park
Park Realty Group, Inc.
949-838-6810
James@ParkRealtyGroup.com
0 votes Thank Flag Link Thu Oct 4, 2012
In addition to the response already received you should also factor the tax incentive of owning the condo. How much difference will that make to your overall financial situation?
Do you plan on buying again within the next 2 to 3 years? Also keep in mind if this is not an owner occupied home you may be subject to a 1099 from the short sale lender for the deficiency (assuming they approve the short sale).
I have done many short sales and will be happy to discuss it some more if you like 949-400-1330.

Good luck!
0 votes Thank Flag Link Thu Oct 4, 2012
This is a tough question, I lived there before and the current market rent for your unit is around 1500 a month at the moment. They reality is.... Can you afford the payment per month with minimal burden on your self? If you can keep it and save your credit. If not, don't waste any time and Shortsale it. It is going to take quite awhile before it reaches that price again and don't forget the 5 percent in commission you will have to pay the agents..... Hope this helps

Mike Zadeh
All coast realty
949-419-6100
0 votes Thank Flag Link Wed Oct 3, 2012
I think as an investment it does not make sense to lose money every month. There are some advantages to doing a short sale this year. i.e. the mortgage debt forgiveness act. check it out here:

http://www.irs.gov/uac/Mortgage-Workouts,-Now-Tax-Free-for-M…
0 votes Thank Flag Link Wed Oct 3, 2012
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