Market Conditions in 33625>Question Details

Birg, Home Seller in Tampa, FL

We bought a townhome as a rental in Tampa, FL..Turns out there are now 94 units, 53 are still owned by the

Asked by Birg, Tampa, FL Thu Dec 18, 2008

Builder. Home owners association is suffering, foreclosures are going up (2 already, 2 more I know of) Should we just walk away or stick it out? I am losing about $500 a month on it. Plus my renter just moved out, so I am not sure how soon I can rent it.
What are your thoughts?

Help the community by answering this question:

Answers

4
Yes, there are a lot of factors to consider... Because this is an investment property (and not your primary residence) you may end up with a tax liability if you do a Deed in Lieu or Short Sale. I believe the amount you are "forgiven" would be reported on a 1099 to the IRS and you would have to include it as "ordinary" income. So if you're in a 20% tax bracket with a $100k forgiveness of debt you might owe $20k to the IRS. If this were your primary residence you would not have any tax liability per a recent change in tax law. I'm not a CPA (just a mere Realtor) so I would recommend verifying this with an expert.

How much would you owe verus how much it would you net if you sold it? Do you have any other assets or have you had a decrease in income since purchasing the townhouse? If you do not have any equity in the townhouse, the lender may work out a loan modification to reduce your interest rate. The underlying investor may not want to take it back, either, unless they have a Credit Default Insurance from AIG (owned by us taxpayers, now!) that will fully reimburse them for their loss. If so, they may have no incentive to modify your mortgage.

Hope this helps.

All my best,
Alma
Alma Rose Kee, P.A.
Charles Rutenberg Realty, Inc.
813.244.9898
0 votes Thank Flag Link Mon Jul 27, 2009
A lot depends on your credit. If you walk away or do a loan modification it will effect your credit. I do not think there is a right or wrong answer here, it is a very personal decision. It is going to take years for the townhouse and condo market to fully recover.
0 votes Thank Flag Link Sat Dec 20, 2008
I don't know why they keep building, there were 1,500 new homes built in the past six months in Hillsborough.
Have you tried a loan modification?
0 votes Thank Flag Link Fri Dec 19, 2008
You should talk to an attorney about your legal options including completing a deed in lieu of foreclosure without recourse with your lender.
0 votes Thank Flag Link Fri Dec 19, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer