Andrew Vitch

Benny,
I am a landlord and there are tenants who I have who have had bad credit experiences. I believe that applicants are on the way up or on the way down. Prove to your landlord that you are on the way up. How recent has been your late or bad payments? Have you made arrangements with your creditors to settle up on past debt either with a write off or some type of payments? Be honest with your landlord. Tell him upfront.
Andy - Sun May 4 2008, 08:59

Ann,
I don't know what Carlton sheets are either, but I am a real estate investor and I have created a very nice living and tremendous wealth from properties. And, I have never put any money into any property that I purchased. Today these properties are worth millions and I owe much less in mortgages.
Compare that to taking your money and buying stocks or mutual funds (which I also do). It is much harder to accumulate wealth in the stock market because with a mortgaged property, you have the bonus of leverage. In other words, say you buy a $300,000 property which you determine is UNDER VALUE and at a good cap rate (I'll explain caps next) and you rent it out to tenants. Maybe you put down $50,000 on the property (remember I never put down anything). If the property increases in value by 3%or $9,000 and your mortgage declines in value $5,000 over the course of a year of tenant payments, your return is actually 28%! That is $14,000 divided by your $50,000 investment. That, Ann, is the power of leverage. What was Andy's return on his properties you ask? Try infinity because I borrowed the whole thing. It is like I made money from nothing.
The biggest problem that investors in property get into is they do not do any financial analysis when they purchase. Judging a property by a Cap Rate is a good tool to use. The Capitalization Rate is the Net Operating Income (NOI) divided by the Total Purchase Price. NOI equals All Rents minus All Expenses EXCEPT the mortgage. All Expenses is insurance, realty taxes, electric, gas, water and anything else you must pay for to operate your property (like advertising or lawn cutting, etc). I buy at cap rates only of 10% and higher. I even bought the resort I own at a higher cap than 10%. And, the higher the cap the better.
So, Ann, if you had bought a property in 1988 at a 10% cap rate and it only appreciated by $4,000, you would have still made a good return because your tenants would have paid the mortgage down quite a bit and you probably paid yourself a management fee out of the income.
That is why Real Estate is a great investment. Do your homework. Buy properly. Hold for 10 years. You'll make money even if the property doesn't go up in value and if it does, you'll make even more. - Thu May 1 2008, 19:41

Toni,
Your situation needs more clarification to give you the best advice possible. If I can suggest, please put more detail in another question. Where are the homes? Are these single family or multi family? What is the total mortgage on each and insurance and taxes. If these are multi unit, what are your annual costs for electricity and gas? Now, what is your income on each?
Does upside down mean per month in cash flow or that they are worth less than the mortgage? To be honest, I wouldn't be so concerned about the mortgage being worth more than the value if you are close per month on your cash flow.
Yours is a problem that happens too often so don't beat yourself up over it. It is also a great lesson for other investors to take note of. As a real estate investor, there is far more security to buy for income than there is to buy for appreciation. And, if you are buying for income, you only pull the trigger when you will be positive. So appreciation is a bonus and a drop in value is irrelevant.
I'm sure the community can give you much better advice if you give the specifics. Maybe you are best to sell 2 and keep 2, but, please do yourself a big favor and give us more information on each property so we can better help you. - Thu May 1 2008, 03:35