foreclosure on rental property

[Ntrouble]

What is the name of your state? Tennessee

I have 3 rental properties (single family homes) and have been struggling to keep renters paying. Evicting takes a while, then there's cleanup and finding a new renter. I've had too much of this lately and I am not able to keep going.

I'm current on all mortgages right now, but by the middle of July I won't be. What are some options? MY preference would be to give the deeds back to the banks. They were all financed at 80% of the appraised value about 3-4 years ago. I'm not looking to get any equity out.

My personal home is valued around $280k, has a first for $142k, and a second for 100k. I would like to leave that alone.

If I understand bankruptcy, all of my assets would be under evaluation of a trustee to decide what happens. I don't care for that. In foreclosure, the banks could only take the rental homes (good), but could come back on me for the difference between what I owe and what they sell them for (bad). I would have no control over the sale and the banks have no real motivation to get the most out of the sale.

I don't know what to do. My credit is perfect. I've never had any issue like this before. I have zero credit card debt. I really don't want to lose my house. If I have to start my credit history over, then I'll live with that and learn from my mistakes.

I'm trying to evict people right now and will be trying to find new renters. I just don't think I'll be able to do it in time and then it's only a band-aid. I've been trying to sell the homes also, and I sold one (my fourth rental) over a year ago to an owner-occupy. But no luck since.

The homes I own are valued between 67k and 80k. Advice? Thanks.

Rob

[lcannister]

They were all financed at 80% of the appraised value about 3-4 years ago. I'm not looking to get any equity out.

Reality is you PROBABLY have no equity even taking into account the 20% down. Have you even talked to the bank concerning this issue to see if they will consider deed in lieu or a short sale on the propertis.

Why did you buy these properties and then not carry through and set an appropriate rent to cover you expenses each month? And if the market will not bear a greater rent then why did you buy something that is usually considered and INVESTMENT?

My personal home is valued around $280k, has a first for $142k, and a second for 100k. I would like to leave that alone.

Is that second to purchase these properties? Realistically, yes again, you do not have any equity to play with in your personal residence either.

See if you can find an investor that will give you exactly what you owe on the properties or even throw in a few thousand yourself in the deal to pay off the properties and learn a big lesson just as the rest of us have at one time or the other in our financial lives.

What assets are you trying to shelter that you THINK might be at risk in a BK?

[Ntrouble]

Originally Posted by lcannister

Reality is you PROBABLY have no equity even taking into account the 20% down. Have you even talked to the bank concerning this issue to see if they will consider deed in lieu or a short sale on the propertis.

I'm just now learning about what my options are and I just read about deed in lieu and short sales yesterday. I'm not sure how to go about talking with the bank. I want to make sure I do it right so as to not hinder the outcome.

Originally Posted by lcannister

Why did you buy these properties and then not carry through and set an appropriate rent to cover you expenses each month? And if the market will not bear a greater rent then why did you buy something that is usually considered and INVESTMENT?

I never said that the rent was too low. When the renters are paying, it cash flows fine. I've had a string of renters not paying and it takes some time to evict people. That, coupled with an ill-advised investment (the 2nd on my personal home) has put me in a very tight spot.

Originally Posted by lcannister

See if you can find an investor that will give you exactly what you owe on the properties or even throw in a few thousand yourself in the deal to pay off the properties and learn a big lesson just as the rest of us have at one time or the other in our financial lives.

I would love to do this. I haven't been able to find anyone yet. It seems that investors would rather wait until you go bankrupt and buy the house in a foreclosure.

Originally Posted by lcannister

What assets are you trying to shelter that you THINK might be at risk in a BK?

Think is the key term. I don't know what's at risk. That's part of my question. I have some equity in my personal home and in my truck. If I have to go the route of foreclosure or bankruptcy I would like to leave my personal items alone and just deal with the rental property. But I've never been in any financial trouble before and I have no idea how all of this works.

Thanks for your help.

[lcannister]

You have little or NO equity in your personal residence based on the info you provided.

If I have to go the route of foreclosure or bankruptcy I would like to leave my personal items alone and just deal with the rental property

I think, note I said think, that if you had set these properties up properly you could have limited your liabilities in case what has happened happens.

Sorry, reread your post and you state you are current on the mortgages which gives you few options right now except to lower the prices and come to the table with a little cash if necessary to get them sold.

Can you refinance them over a longer period of time?

[lcannister]

WHILE you are still current see an Atty and see if you can set these properties into an account where your personal assets are not at risk.

[Ntrouble]

Thanks for the info. I am current right now, but won't be for long. The properties are deeded under my LLC name, but the loans are personally guaranteed. I'm not sure how much protection that gives me or not. What type of an attorney should I contact? I've never dealt with anything legal or financial like this. Thanks again.