Hi, well I don know if you bleed for ten years or not. My first question would be how long do you expect to suffer. Borrowing long term fo short term expenses is the kiss of death in business(or your personal life). When do you have a repricing opportunity with rents and when is the current lease up?
However, it becoming cost prohibitive to hold the property. I dipped way into savings, and even gone into some debt to cover the cost of taxes on the property.
Most here know I just a wild and crazzzzy guy so hold on to your Yellow Air Max 90
I would sell the property ASAP! Things are going to get worse A LOT WORSE! There are literally millions of foreclosed homes that the banks are holding off the market. Foreclosures are going to explode in 2011. The housing bailout is just about to end. There is a HUGE inventory of houses that will have to hit the market at some time and will drive prices much lower.
If you lose the property your tenant will have 90 days to stay there after the sale. In light of that and the costs of moving, maybe they would now consider helping with the taxes in their rents.
You already said you at a loss on this deal. Do you actually have any equity? If you selling at a loss where the profit to split with an investor?
Look into a 1031 exchange for yourself with a non profit housing organization. Trade your way out. If the organization would not have the tax liabilities that are putting your property under, it may work for them. They may have a property that they would trade for yours, I know it might not be the best deal, but your ship is sinking!
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I would imagine Acorn is closed (LOL) but I sure there are others. I had a non profit which I was the Executive Director of, with a salary and bennies, and the properties were for low/moderate income housing. I could trade for dogs and make them work.
I assume you own the house, and its your IRA you considering. No, your IRA cannot have any dealings with you.
None of these things even considers the macro economic picture. THE USA IS BROKE! The debt is 91% of GDP and RAPIDLY rising. The government solution to this debt crisis is to borrow (print) more money by the boat load. Medicare is broke (even before the Socialist in Chief takes $500 Billion out of it to pay for socialized healthcare). Social security is broke. Freddie and Fannie are broke. Many states are broke. Many cities are broke. The government has essentially nationalized the big banks, the auto industry, big insurance, healthcare, student loans, etc, etc, etc. The country is literally insolvent and failing. If you got a loser NOW is the time to sell it.
Selling at a loss and ponying up the cash (or taking a loan) to cover the shortage may be your best bet. Some folks say here say they had success getting investor Nike Air Max 90 Moire Grey short sales to happen, but that would slam your credit. And, if you have other assets, the lenders won let you just walk away.
Rent to own doesn usually make for much of a higher rent. Plus, you be giving that higher rent back when they exercise the option. The property will have to appraise. If Air Max 90 Ultra Essential Blue
Realize the costs of selling real estate are at least 8% of the sales price. Probably more like 10 11% right now. If you put in a decent down payment or otherwise bought right, maybe you can get away without bring cash to the table. If you have to bring cash, you have to weight that against the monthly loss. With the real numbers, I evaluate the current net from a sale vs. your loan. Both right now, and projecting into the future. I look at the current monthly loss. I figure out where the monthly loss adds up to the loss to sell and see if it makes sense to try to hold on.
It sounds as if you have dropped rents to get it rented that this might be available to you, don know the property.
Does the city exempt non profit housing organizations from the taxes that are sinking you?
My feeling is we not going to see more big drops in prices, baring some big new crisis. We may be flat for a few years more and at some point we start seeing slow appreciation. I use 3% annual appreciation as a guess.
The only other suggestion as one you are considering, seller fina nce/wrp the deal, hopefully to the tenant. Tell them they need to pay more and you carry what ever equity you have. Amortize it so that you conserve your equity, but it has to cover the liabilities too. Hopefully you ahve something at the end.
you in a position to have to sell at a loss, that may still be true when they exercise their option.
Our advice would be more accurate with the details of the deal. If you really in the red (rent doesn even cover PITI) and you deep underwater, its probably a choice of taking the hit now or later. But without an understanding of the real situation, its hard to give specific advice.
I don know what kind of financing you have in place now, but I 100% sure its better than hard money. Hard money going to be 2 6 points, 12 18% (and NOT 2 point and 12%) and 60 70% LTV max.
As it is, with the downturn in real estate in the Chicago area (we had the property for about two years), in order to get tenants, we had to go lower on the price, in order to fill the vacancy. We been fortunate to have good tenants. Nike Air Max 90 Ultra Breathe
I a first time owner of an investment property. Challenge is that I did not figure in a senior tax exemption as well as homeowner exemption, which made the taxes look deceptively lower.
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