Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hello people
here is the situation.. I'll try to be brief.. 3.5 years ago my husband and I invested $57K in pre-construction DUO condos in Hallandale.. With a promise to sell the apartment in 2 years and make a good profit.. Well, since than we divorced, I "inherited" the unfinished apartment, the construction took 3.5 years instead of 2, the market is in shambles.. Last year i was able to find a buyer and they put in a deposit and we all waited for closing.. Well, the new buyer defaulted last week, and the development wans me to close in 10 days..
my problem is I can't afford to pay $11K for closing and $2K every month until it sells at a much lower price.. it just doesn't make sense to me financially..
I might walk away and forget about $57K.. which is pretty hard.. I'm a single mom now...
My question is - can I write off that investment and at least get some money back in taxes?
Oh, I forgot to mention, I also invested $3.5K in marble floor upgrade and they wanted me to pay the other half of it in the closing.. If I walk away from this deal totally - do I need to still pay that half of the upgrade?
please help, it's pretty stressful holiday season for us here....
I live in Denver, but originally from Russia
Thanks for all your kind advice!!
Find a good CPA and a lawyer - do not rely on this board for such critical information. Good luck to you.
I already made an appointment with one, but it's going to be after the holidays. I'm just trying to get a vibe from floridians.. weather it' common issue.. Thanks though
I already made an appointment with one, but it's going to be after the holidays. I'm just trying to get a vibe from floridians.. whether it's a common issue.. Thanks though
It's relatively common. Not too sure about the exact numbers since those who publish numbers have agendas and tend to twist the numbers to suit their agendas, but anywhere from 20%-40% of subprime mortgages are defaulting or are danger of defaulting within the next two years, and Florida is one of the leading default states.
Reiterating the sound advice of consulting with a good CPA and lawyer, common sense says that if your income - whether from employment, business, or other passive investments - does not comfortably cover the carrying and other costs of the real estate investment, then dump it according to the business principles "don't throw good money after bad", "sunk costs", etc.
Common sense says invest in what is productive, in what you can most directly control. Unfortunately, the US ruling classes have unleashed on the population a monetary/credit policy that encourages and promotes irresponsible speculation under the guise of the "ownership" society and "investment".
Real investment is adding real value to the economy, not flipping each other burgers and overpriced, energy-guzzling houses that require energy-guzzling vehicles to get to somewhere that is probably just as unproductive.
In short, this whole real estate bubble debacle has been a waste of precious energy, and your predicament is just one example of that.
Would you still qualify for the loan on your income alone?
I think the good ppl here have given you some sound advice. Contact a real estate lawyer, they can tell you your options. Since it took longer than originally contracted you may have an out.
I cannot offer any valid legal or tax advice so please don't take this as such.
The situation you are in is quite common and there is widespread fear of massive defaults. You may want to use that to your advantage.
First, seek legal and tax advice. Look for the best. I have no recommendations but I am sure there are others on this board who might help.
Second, put on your realistic negotiation hat. Establish what you can afford and how you can afford it. If you can't afford the closing costs, propose that the developer take these on, or the bank. They don't want another abandoned property.
Second, figure out how you can maintain the investment - how much you can afford monthly, a strategy for renting it or selling it. Create a plan and don't worry about people who say it is not realistic.
One strategy might be (and I am only suggesting) to offer the apartment to Russian nationals who might want a vacation spot at a price they can afford. Get creative.
If you go to the bank and the developer with a plan which makes sense for you and prevents default and abandonment, you may find they are willing to listen and work with you.
Default will hurt your credit and your ability to buy in the future, not just on real estate but you will pay more for cars, credit cards and in some cases insurance. If you can avoid it, do so.
What you don't want to do is get bullied into either a settlement that you can't live with or a default until you have exhausted other options.
Again, the negotiation strategy here is develop the most realistic plan you can and hang tough. You may be surprised and really, what do you have to lose?
Oh, and do I need to add next time you invest, make sure you can handle the worst case scenario? Probably not.
Quote:
Originally Posted by akvatrail
Hello people
here is the situation.. I'll try to be brief.. 3.5 years ago my husband and I invested $57K in pre-construction DUO condos in Hallandale.. With a promise to sell the apartment in 2 years and make a good profit.. Well, since than we divorced, I "inherited" the unfinished apartment, the construction took 3.5 years instead of 2, the market is in shambles.. Last year i was able to find a buyer and they put in a deposit and we all waited for closing.. Well, the new buyer defaulted last week, and the development wans me to close in 10 days..
my problem is I can't afford to pay $11K for closing and $2K every month until it sells at a much lower price.. it just doesn't make sense to me financially..
I might walk away and forget about $57K.. which is pretty hard.. I'm a single mom now...
My question is - can I write off that investment and at least get some money back in taxes?
Oh, I forgot to mention, I also invested $3.5K in marble floor upgrade and they wanted me to pay the other half of it in the closing.. If I walk away from this deal totally - do I need to still pay that half of the upgrade?
please help, it's pretty stressful holiday season for us here....
I live in Denver, but originally from Russia
Thanks for all your kind advice!!
You live in Denver and have a condo contract in Florida? Stating the possibly obvious, be sure your legal advice is from a Florida lawyer. Laws vary from state to state.
I would delay closing, putting it this way- you guys promised closing a year and a half ago, when the market was still somewhat hot. By delaying construction, you dropped me into the bottom of the market and abrogated your obligations. If you don't want me to sue, then we need to delay the closing for at least six months. Will it work? Possibly not, but what do you have to lose? My bet is the developer doesn't have anyone waiting in the wings to buy your condo.
I bet you will lose a substantial portion of that $57K, no matter what you do, unless you move in, get out of Denver, and wait the market out for at least three years. Depending on your situation, that might be your best option. Short of that, you have to find a buyer. Chop the downpayment to $30K and you might find some interested ones. Losing $27K is a lot better than losing $57K.
Politics and real estate bubbles aside, your only job is to get out of your situation with a minimal loss, and no ongoing burden. If the developer states it won't delay closing, making the initial moves of following through on a suit could bring them around.
If they don't delay the closing, I would probably choose to default rather than assume the burden, unless I either had the intent to move in or had a buyer pre-qualified and ready to buy immediately after closing. Hopefully, the developer or condo association doesn't have to vet anyone you propose as a buyer. If they do have to approve your buyer, I'd run away from the closing, not walk.
You live in Denver and have a condo contract in Florida? Stating the possibly obvious, be sure your legal advice is from a Florida lawyer. Laws vary from state to state.
I would delay closing, putting it this way- you guys promised closing a year and a half ago, when the market was still somewhat hot. By delaying construction, you dropped me into the bottom of the market and abrogated your obligations. If you don't want me to sue, then we need to delay the closing for at least six months. Will it work? Possibly not, but what do you have to lose? My bet is the developer doesn't have anyone waiting in the wings to buy your condo.
I bet you will lose a substantial portion of that $57K, no matter what you do, unless you move in, get out of Denver, and wait the market out for at least three years. Depending on your situation, that might be your best option. Short of that, you have to find a buyer. Chop the downpayment to $30K and you might find some interested ones. Losing $27K is a lot better than losing $57K.
Politics and real estate bubbles aside, your only job is to get out of your situation with a minimal loss, and no ongoing burden. If the developer states it won't delay closing, making the initial moves of following through on a suit could bring them around.
If they don't delay the closing, I would probably choose to default rather than assume the burden, unless I either had the intent to move in or had a buyer pre-qualified and ready to buy immediately after closing. Hopefully, the developer or condo association doesn't have to vet anyone you propose as a buyer. If they do have to approve your buyer, I'd run away from the closing, not walk.
Thank you for your sound advice.. I'm going to see an attorney tomorrow, and find out what my options are..
Thank you all!!
Спасибо
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It's Time To Negotiate
