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Old 12-28-2007, 12:24 PM
 
5 posts, read 30,023 times
Reputation: 13

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I have 2 properties in Florida that are worth less than their mortgages; I bought one in 2005 for 310k, with a mortgage of 270k. the mortgage payments and the PMI are almost 3k a month. its rented our for $1300 a month, making me in the red $1700 a month. The other property is no better. similar houses are selling for $175-220k. At this burn rate, I may not recoup my investment for years, if ever. I am current on the mortgages, but it is tough going.

My question:

Has anyone done a short sale with their bank, and kept the house? does this need to be done discreetly, using an LLC to fund the short sale, so the house moves from my asset to an asset of the LLC, which then secures a lower mortgage?
Is there any advantage to do this?
Please, no nasty comments, I am looking for information, so I can cut some losses here.
Thanks for reading, and thanks (if you post a response).
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Old 12-28-2007, 12:28 PM
 
69,372 posts, read 53,591,148 times
Reputation: 9357
Quote:
Originally Posted by powman View Post
I have 2 properties in Florida that are worth less than their mortgages; I bought one in 2005 for 310k, with a mortgage of 270k. the mortgage payments and the PMI are almost 3k a month. its rented our for $1300 a month, making me in the red $1700 a month. The other property is no better. similar houses are selling for $175-220k. At this burn rate, I may not recoup my investment for years, if ever. I am current on the mortgages, but it is tough going.

My question:

Has anyone done a short sale with their bank, and kept the house? does this need to be done discreetly, using an LLC to fund the short sale, so the house moves from my asset to an asset of the LLC, which then secures a lower mortgage?
Is there any advantage to do this?
Please, no nasty comments, I am looking for information, so I can cut some losses here.
Thanks for reading, and thanks (if you post a response).
Dont know about the short sales to oneself, but I have seen people show up at a sheriff sale, and buy their own properties back.

Looking at the finances, I'm not sure I'd even want to keep the two properties you've mentioned, not if thats all the rent one can get. Why hold onto any property where your eating money monthly.
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Old 12-28-2007, 11:52 PM
 
Location: Tucson, AZ
529 posts, read 2,089,493 times
Reputation: 326
Quote:
Originally Posted by powman View Post
I have 2 properties in Florida that are worth less than their mortgages; I bought one in 2005 for 310k, with a mortgage of 270k. the mortgage payments and the PMI are almost 3k a month. its rented our for $1300 a month, making me in the red $1700 a month. The other property is no better. similar houses are selling for $175-220k. At this burn rate, I may not recoup my investment for years, if ever. I am current on the mortgages, but it is tough going.

My question:

Has anyone done a short sale with their bank, and kept the house? does this need to be done discreetly, using an LLC to fund the short sale, so the house moves from my asset to an asset of the LLC, which then secures a lower mortgage?
Is there any advantage to do this?
Please, no nasty comments, I am looking for information, so I can cut some losses here.
Thanks for reading, and thanks (if you post a response).
You're asking if you can "cut your losses" as if you aren't trying to wiggle out of a bad situation. And by "discreet", I assume you mean by less than honest means. Sound about right?

If you want to cut your losses, short sale the home. Think of your loss as a lesson learned. This is not a "nasty" comment, just an honest one.
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Old 12-29-2007, 08:41 AM
 
1,234 posts, read 1,029,229 times
Reputation: 452
See if your bank is willing to allow you to cram down the loan amount. I have heard of this being done. Not to sure as I believe that it would take an alert lender to allow this. However, amazing things are happening in the lending arena these days. You might be surprised at what they can do. If you default, they have the losses, expenses, and hassles of recovery and sale anyways. They may work your loan down to current market value. I would try this first. Call them and ask. If they will not help, perhaps a local attorney can negotiate a better deal for you. This path avoids Fraud and related headaches. Good Luck and let us know. Happy New Year......OT2
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Old 12-29-2007, 07:40 PM
 
Location: San Diego CA
1,030 posts, read 1,995,734 times
Reputation: 608
Quote:
Originally Posted by oldtimer2 View Post
See if your bank is willing to allow you to cram down the loan amount. I have heard of this being done. Not to sure as I believe that it would take an alert lender to allow this. However, amazing things are happening in the lending arena these days. You might be surprised at what they can do. If you default, they have the losses, expenses, and hassles of recovery and sale anyways. They may work your loan down to current market value. I would try this first. Call them and ask. If they will not help, perhaps a local attorney can negotiate a better deal for you. This path avoids Fraud and related headaches. Good Luck and let us know. Happy New Year......OT2
I agree with this approach as well.
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Old 12-29-2007, 09:09 PM
 
49 posts, read 112,381 times
Reputation: 19
A short sale is when the bank will let you sell the house for less than the mortgage and discharge the differences. Current tax laws consider the discharged debt as taxable income.

One question. Why would you pay $300k for an investment property that only rented for $1300 per month?
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Old 12-30-2007, 08:26 AM
 
6 posts, read 15,362 times
Reputation: 9
If you want to use a short sale, you might need to let a member of your family who is not on the title of the home buy it. For future investment properties always find out how much you will rent the property for before you buy it. I know some real estate agent put you into that mess because he wanted to earn a commission and did not care about you.
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Old 12-30-2007, 03:42 PM
 
Location: NE Florida
17,835 posts, read 29,403,652 times
Reputation: 43270
"If you want to use a short sale, you might need to let a member of your family who is not on the title of the home buy it"

I would do some research to make sure this would not be a "straw purchase"
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Old 12-31-2007, 01:39 PM
 
1,234 posts, read 1,029,229 times
Reputation: 452
Sometimes it is not just a question of legality. There is an ethical reality also involved. Intellect suggests moral, ethical and legal solutions. Imagine if we all just decide to......OT2
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