Question: I've been an investor for a little over a year. I own three single family homes, one in which I live and the others are for rent. I got into investing being very ignorant and ended up with some deals that are not performing. These properties are hurting me more than anything.
I've tried to sell but many people told me that the properties are overpriced and I was taken advantage of. Is there anything I can do besides sue? Is there anything I can do to get rid of these properties? If so, how can I find someone to help? I have learned a big lesson and now I am ready to make the best of what I have. I am struggling every month to make these payments. Is there a company that can help?
Answer: Forget about "companies" that can "help" -- people will only pay as much as the properties are worth -- and less if possible.
Who would you sue? The marketplace can and does change. As an alternative, why not consider some options: For instance, would any tenants want to buy? Can you rent rooms in your home to boarders? Can the properties be converted to other uses with higher values? If you sold at a loss, would that be better than your current situation? Would it make any sense to sell the residence and then move into one of the investment units? By any chance, is the residence financed with a purchase money mortgage in a state where you cannot be sued for a shortfall from selling the property at a loss?
Speak with an attorney for details.
Question: I "see" a woman aged about 25 to 30. She says she is from Texas and she wants my help. She says her husband drowned her. She just won't leave me alone. There was also a local boy named Josh. I capitalize his name out of respect. He has left. There was a woman named Karen, I am not sure where she went. Linda will not leave.
There are others that I don't talk to. One of the strangest things I ever saw was as I was washing dishes and a little girl, obviously from the early 1900s or late 1800s was there. When I turned around she asked me for a glass of water. I had been through other strange things, so I didn't think much of it. But when I turned back around she wasn't there. It was really scary. Now I am used to that kind of thing. In retrospect, that was nothing compared to what I see now. Seeing dead people is not much fun. The people I see now are okay, but they don't know where to go. They know they are dead but they don't know what to do. They come to me for help. What do I do?
Answer: I'm not sure this is a real estate question, but to the extent that it is there are what as known as "stigmatized" properties, homes which may have been the scene of a murder, suicide or where ghosts have been seen. The definition of a "stigmatized" property varies by state and many states have no rules regarding the issue.
Thus, if you're asking whether a home with ghosts can be sold without disclosure the answer is that you need to look at state rules. If you're asking how to address those you see and hear regardless of where you are, those are questions beyond the scope of this column. Speak with a counselor or cleric for further advice.
Question: In a multiple bid situation, could I put an offer in for say $125,000, or $1,000 over the highest bid, not to exceed say, $130,000?
Answer: Yes. What you're proposing is to make an offer with an automatic escalator clause -- and a bidding cap.
Escalator clauses are used in situations where a home has multiple offers. However, buyers need to use care. A cap is absolutely essential. Also, be wary: If there are two bids with automatic escalators they can just bounce off one another until the highest cap, or no cap, is reached. Before going further, ask your broker if he or she is sure that there are, in fact, other competitive bids.
Question: At this time I'm behind one month on my house payment. I would like some help on what I can do to prevent foreclosure. The reason for this is because I bit off more than I can chew. If you can give me any advice or someone that I can call please let me know.
Answer: First, you must immediately communicate with the lender, either directly or through an attorney. They may have programs in place to assist you. Second, consider listing the home for sale if this is something other than a temporary problem -- this may also encourage a lender to give you time to sell. Third, you may be able to hold off a foreclosure by declaring bankruptcy, but this is an awful alternative. An attorney can provide bankruptcy advice.
Question: I currently own a two-bedroom co-op apartment that's valued approximately $300,000. My credit is average and I have $15,000 cash to work with.
Right now I would love a purchase a three-family investment property for $595,000. How can I generate the cash to purchase this property but still keep my co-op since this is my primary resident? My income is $72,000 annually but I also live pay check to pay check since I am a single mom of two. I really want this property as an investment to help pay for my kid's college tuition.
Answer: Would it make any sense to sell the co-op and then live in one unit of the triplex? This way you could get owner-occupant financing plus two rental units to off-set your costs.
Does the rental property produce a positive cashflow? If not, how will you cover the bills? What about closing costs? Before going further, have a qualified real estate broker go through the entire transaction with you. You have the right idea, you need to see if this is the right property in terms of financing, economics, location, condition, etc.
Question: My ex-husband bought a house and the inspection revealed there was a leak in the above-ground oil tank which is in a basement.
Subsequently, he was told that it was fixed, and he bought the house. The first time he tried to buy oil for heat, he found out it wasn't "fixed" and the law states leaking oil tanks are not allowed to be fixed, and therefore real estate is not supposed to be sold with this problem and there could be a $25,000 fine
The company he signed a contract with to buy oil would not give him oil because of this problem -- the entire winter. It's freezing in our state, not to mention there being a threat of water pipes freezing.
The sellers had agreed to pay for a new tank and have canceled twice, saying they were looking for a better price. They told him not to put any oil in the tank as they were going to remove it. He didn't put any oil in the tank, and they did not show up as promised, now his furnace will not work -- still -- in the middle of winter. They called him today and now state they are NOT going to replace the tank, but have offered him $400 as compensation. It costs about $2,000 to replace.
Who is responsible? What is our recourse?
Answer: Did someone say the tank had been repaired? Is there a receipt for such work? Did you get an independent inspection?
The state or local environmental protection office may be able to provide specific information regarding what is or is not required in such situations. They may also be able to provide an inspection.
Question: I have home that I'd like to purchase, but the seller doesn't want to sell for two years because he has a prepayment penalty, so he giving us the option to lease for two years and than purchase. If we pay $1,200 a month and $600 goes toward the down payment, can the seller just spend that money and at end of two years give us a credit?
Answer: A lease purchase agreement is a complex arrangement and you should not go any further with this until you have paperwork prepared by an attorney of your choice. However, before you get to that point, speak with lenders. They may not give credit for money which is below a market-rate rental or money to buy which is not retained in an escrow account by the current owner. Ask how lease purchase credits are to be handled and show the owner, or have the lender show the owner, what's required.
How much is the prepayment penalty? In a market which is slowing in many areas, would not the owner be better off selling now? As to you, why lock-in a price now when it could be lower in the future? If the owner does not want to sell at this time you may be best off buying elsewhere or renting at a lower cost and saving your money.
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