Foreclosure in San Diego>Question Details

Iker, Both Buyer and Seller in San Diego, CA

I'm a landlord renting my underwater condo (>50% under) at a loss for almost a year, can't take it anymore. What to do? shortsale?

Asked by Iker, San Diego, CA Tue Sep 6, 2011

Help the community by answering this question:


Dear Iker,

When we Realtors discuss an owner's options, we need as much information as possible. Such as; how long have you been renting that condo and have you lived in that property two out of the last five years. If you answer yes to the last question, then you might be able to fall under the homeownership rules which are vastly different than the investor rules. Most of the legislation out there today is to help homeowners in distress and not investors.

No matter what your classification these are your choices: 1) continue feeding that negative alligator, 2) sell it or 3) let the bank take it back. By the way, Bankruptcy could help reorganize your assets, but normally it only stalls the inevitable. Since you state the property is upside down (underwater), you won't be able to do a traditional refinance. And, a loan modification is normally for homeowners still living in the property. Also, since you state you can't take it anymore then probably item one (1) above may not be a good fit.

That leaves you with only two options; and the latter one (foreclosure) will damage your credit for a longer period of time and will almost always guarantee the bank(s) will come after you for their loss (the difference from the loan balance and what they sell it for, plus fees). So, in my opinion, your best option may be to sell your property and there are several ways to do that; a traditional short sale or a lease option are two of them.

I assume you've used leases before, so adding an option to purchase wouldn't be that hard. Additionally, since there are so many people who have a down payment in cash and poor credit in today's economy, you could possibly sell the property to a family who would take care of your asset. You may have to use a long term lease to compensate for the amount of loss in value in order to break even or profit in the future.

Then, if you're truly tired of the management headaches that go along with leasing, you might want to just get rid of it outright by selling it in today's market; which would be a short sale. I'm a certified short sale specialist through Harris Real Estate University and have been selling properties short for the past several years. In fact, I helped one of my real estate co-workers sell their investment property short. Of course, there are no guarantees that it will sell but I'll do my best to accomplish the task at hand.

If you would like more information that pertains to your individual situation, please contact me at 619-741-8259 and/or I hope this answers your question and helps in determining your next move.

Additionally, I'm not an attorney or tax adviser, so please seek legal help in regards to those questions.
1 vote Thank Flag Link Wed Sep 7, 2011
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at You can check us out at I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
0 votes Thank Flag Link Thu Aug 15, 2013
Yes, defintly try the short sale route. If that doesn't work you can let it go to foreclosure without much besides credit repercussion as long as the loan you used to initially finance the property was a purchase money loan and it was owner occupied.
0 votes Thank Flag Link Mon Sep 26, 2011
Hello Iker,

Definitively you are better off doing short sale as your rental income does not cover your mortgage payment. There might be some tax consequences depending on your duration of ownership, deficiency amount, and so on. But anything but foreclosure is better option.

Please feel free to browse my blog on avoiding foreclosures at where I explain consequences, pitfalls, and other relevant issues when evaluating your options.

Good luck,

Daniel Choi
Nextage Capital Advisors
(213) 820-7509
0 votes Thank Flag Link Fri Sep 23, 2011
Hi Iker

I Just wanted to know if you hired any realtor yet to assist you with Short Sale or yet decided to move forward with it?

Vadim Agamirzoyan
Web Reference:
0 votes Thank Flag Link Wed Sep 21, 2011
Hi Iker,

I agree that a short sale sounds like a good choice for you, since this involves a non-owner occupied residence. Definitely speak with your CPA or financial adviser to learn about tax consequences, and find an agent who really has short sale skills and can negotiate on your behalf with the lender(s).

Best of luck,

0 votes Thank Flag Link Fri Sep 16, 2011
A short sale sounds like the thing for you, you get rid of the debt and avoid foreclosure.. learn more about it here:
0 votes Thank Flag Link Thu Sep 15, 2011
You can do a short sale. I've negotiated many, many short sales for investor owners whose rent does not pay the mortgage. Check with your accountant, however, about tax issues of selling a non-owner occupied as a short sale.
0 votes Thank Flag Link Mon Sep 12, 2011
Thank you all for your replies. I appreciate the advice given.
0 votes Thank Flag Link Mon Sep 12, 2011
Yes, short sale is the asnwer!

Your problem is who to choose. We are local agent doing 4-5 shortslaes a month.
Personal and professional...

Call Raymond Escobedo 858-268-1177 (Office)
Kareic Real Estate & Invesytment
0 votes Thank Flag Link Thu Sep 8, 2011
A short-sale is one of your options, but it's not the only one.
0 votes Thank Flag Link Wed Sep 7, 2011
A short sale is the best option at this point since it is not your primary residence. I work as a property manager as well as listing and buying agent. So I have seen every single angle of this equation, and can provide you with a solution to your financial burden. I would be happy to discuss this with you further as everyone's situation is unique.

Ken Schwartz
DRE# 01854235
KM Realty, Inc
3530 Camino del Rio North #101
San Diego CA 92108
Cell: 858.366.3093
Fax: 888.470.5928
0 votes Thank Flag Link Wed Sep 7, 2011
Hi, I am sorry to hear about your loss but ur in good company these days . We have been assisting our clientele for decades with 'underwater' solutions b4 short sale or loan mod became a household name!! Feeding oyur investment property from your savings to pay your mortgage payments on loans that don't come close to covering the current market value of your property gets old real quick! Does your tenant pay rent on time and in full? Do U have a default notice? Please contact Maureen at 760 622 6855 to discuss the options that maybe available with you if u want to at or call me anytime.
Web Reference:
0 votes Thank Flag Link Wed Sep 7, 2011
Short sale is the obvious answer. You may qualify for other, better options that may suit your particular case. Don't hesitate to contact us if you need help.
0 votes Thank Flag Link Wed Sep 7, 2011
Hi Iker,
As someone who deals extensively in property management and short sales, I think that I can definitely help you sort out this situation. There are a lot of variables that aren't mentioned in this question that I would need to know to give you the best advice for your situation. Please contact me at your convenience and I would be happy to discuss your options.

Hang in there! There are definitely options.

Sinead McAllister
McAllister Homes Real Estate and Property Management
0 votes Thank Flag Link Wed Sep 7, 2011

I come across a lot of people in your situation. They would like to do the 'right thing' and keep paying but just can't do it anymore. I was actually in a similar situation and had to short sale my own condo almost 2 years ago - now I help other people do the same.
This is the most common question that people in your situation ask me: "which is better, a short sale or a foreclosure."
I don't know if you have a 1st and 2nd loan, or a HELOC. If you have more than a 1st, then Senate Bill 458 makes doing a short sale a no brainer. It basically says that as long as a loan is secured by a deed of trust then they cannot come after you for the remaining balance if they agree to a short sale. 2nd's and HELOC will often want to come after you after the sale.

Other benefits include:
• Allows you to live mortgage free during this process, giving you time to save up.
• No “Foreclosure” damaging your credit for 7 years.
• There are NO out of pocket expenses to you. The bank pays for all expenses and commissions.

Whether or not you let it go to foreclosue or do a short sale, you still have the IRS to deal with. There are ways around that - like if you've occupied the property 2 out of the last 5 years, or if you can show insolvency at the time of the sale. This is where you MUST consult a real estate attorney and CPA.

Call, Email, or text me if you have any more questions about the short sale process.

Joe Rennick

Cell: 619.302.9139
DRE Lic #01871454
0 votes Thank Flag Link Wed Sep 7, 2011
Yes, short sale is the answer and I have closed 100's of these. I may be able to save your condo by going a different route if you qualify. Dana Rosas
Web Reference:
0 votes Thank Flag Link Wed Sep 7, 2011
Dear Homeowner

To answer your question short, YES the shortsale is your best option in your case for several reasons.
First of all the condo is not your primary residence, but you can still qualify for a shortsale.You wouldnt be eligible for HAFA program to receive $3000 cashback. If you are at loss on your condo there is no point of keeping it and continue dumping money into the hole and waste time and money.
Other option would be a foreclosure, but you really dont want to go that route especially if its an investment property, you might get 1099A after foreclosure and could be liable for taxes. You might want to read my recent blog about that issue…
Also please keep in mind that if you are still making payments and have not missed any and if you do care about your credit, you might want to consider continue making payments and complete the shortsale while not in default so you have ability to purchase another property right after the sale!! This is a very important aspect and you need to seriously and carefully plan the process.
I deal with a lot of Investors that buy my own shortsale listings right before it even hits the MLS and you as a Seller can benefit out of that by avoiding showings and scare away tenants. Its very important to keep your tenants happy and not to be worried about the property getting foreclosed or purchased by someone else and they will have to vacate the unit immediately.
Also when interviewing agents to hire to do you shortsale it is EXTREMELY important to know the following;
1. Is the agent a full time realtor?
2. Does the agent have enough experience with shortsale transactions
3. Who will be negotiating a shortsale transaction
4. Is the agent CDPE? ( Certified Distressed Property Expert )
5. What is the success rate for that agent to complete shortsales

There are many other discussions about the shortsale that are very important so please consider to call me for a short quick meeting.

Good luck to you and I wish you best luck in making a right decision. Its always hard to make that very first step in shortsale!

Vadim Agamirzoyan
Certified Distressed Property Expert
5555 Jackson Dr #150
La Mesa, Ca 91942
(855)306 HELP 24hr Hotline
(619)962-1747 cell
Web Reference:
0 votes Thank Flag Link Wed Sep 7, 2011
To fully understand the tax repercussions of a short sale or foreclosure I recommend contacting Fred Karma with Financial Account Service - 951-719-1515. Fred has dedicated a division of his company to specifically help clients in a distressed real estate situation understand all the tax rules of debt forgiveness. Go to his web site at These guys are the Southern CA experts in this area.

Bill Provost
Vintage Mortgage Group
Loan Consultant
760-282-4415 Direct
Follow my blog –
NMLS # - 101876
CA DRE License # 01867503
WA DFI License# MLO-101876
0 votes Thank Flag Link Wed Sep 7, 2011

Short sales on non-owner occupied properties are less cut and dry and than on a primary residence. I would recommend talking with someone that handles exclusively short sale negotiation and knows exactly how to present the short sale package to the bank to make sure it is done right the first time. I would recommend calling Jacalyn Blank at Short Sale Solutions: (866) 593-7755 or jblank [at]

Don't worry- you can get help to get out of this situation.

Best of luck to you.

0 votes Thank Flag Link Wed Sep 7, 2011
As Rene has explained very well, you do have options one of which is a short sale. As Rene explained, you will need to seek guidance from your accountant, attorney and develop a strategy that goes in the direction most beneficial for you. I believe you have already realized the absolutely worst thing to do is nothing. Act now while options are still available.

Every situation is different just as yours will also be unique. I would recommed working with a real estate professional who has successfully closed on short sales AND works with investors. This individual will have the tool set and agility to create the startegy of greatest benefit to you.

Finally, you must provide the needed docmentation immediately. Your team is working on your behalf and nothing undermines their efforts more than faulty or missing documentation. You will be entering the wild, wild west of real estate where rules are an illusion, outcomes random and committment to the goal, essential. You would be well advised to embrace the best outcome is the one where you incur the least damage. You will not emerge from this situation without being nicked. You team will help you identify the least worst option to pursue.

Best of success in your coming important decisions.
Annette Lawrence
ReMax Realtec Group
Palm Harbor, Fl
727. 420. 4041
Web Reference:
0 votes Thank Flag Link Wed Sep 7, 2011
I recommend you contact your lender first prior to doing a short sale. Most federal loan modification programs don’t apply to non-owner occupied properties or investment properties however, you may still be able to get a loan modification if your lender has an “in house” program. Lenders often still have an interest in modifying investment property loans, but the process is a bit more difficult but you could certainly try! Hope this helps!
0 votes Thank Flag Link Wed Sep 7, 2011
Contact someone who knows what she is doing and can give you the correct response, Diane Golde is an expert in this field and has helped many people like yourself get on the right path. Her councel session is free and worth your time. (760)594-4344. Nothing to lose, a lot to gain. Good Luck!
0 votes Thank Flag Link Wed Sep 7, 2011
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