Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-29-2008, 10:10 PM   #21
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by FUEGO View Post
You probably have this under control, but make sure a judgment against you wouldn't adversely affect your law license. Particularly if you are applying via comity to a new jurisdiction. In my jurisdiction, the bar application requires extensive disclosures of suits to which you were a party, judgments you owe, financial disclosures, credit reports, etc.
Thanks, Fuego. I'll go to great lengths to avoid a judgment for a number of reasons. But I don't think it will affect my ticket, especially since a judgment on a note doesn't necessarily involve fraud, deceit, dishonesty, and all the other issues ethics folks watch out for. But it's an issue I'll try to avoid regardless.
__________________

__________________

Niko is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-29-2008, 10:12 PM   #22
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by Texarkandy View Post
Don't feel too bad - we have a recent transferee who lost approx 40k on a house in N. VA to move to our office here in E. TX
I don't feel to bad, I just want to get this behind us with as little damage as possible. Money is money. I just don't want it to get in the way of what's important.
__________________

__________________

Niko is offline   Reply With Quote
GI Joe
Old 10-29-2008, 10:31 PM   #23
Recycles dryer sheets
 
Join Date: May 2005
Posts: 287
GI Joe

Niko,

One other thought on doing this yourself. I currently have two young men that are, with their wives, renting from me. Both are veterans from the recent wars. They don't have children yet, and are both on the GI Bill.

Each is going to school, one in law enforcement and one in the construction trades. Each has income for housing and schooling.

One of these fine fellows I've had for two years now. Great tenants and I'm happy to be doing something for them because what I'm renting to them is prime.

Fortunately or unfortunately, we have tons of these guys looking for housing. So if you can find just one, well they are golden.

boont
__________________
boont is offline   Reply With Quote
Old 10-29-2008, 10:32 PM   #24
Recycles dryer sheets
 
Join Date: Sep 2007
Posts: 184
Quote:
Originally Posted by Niko View Post
I'm inclined to try managing myself. I know a handy man in the area. He does his own work on 8 or so rentals he owns. I suspect I could talk him in to covering mine too for a reasonable price.
He's your property management. Since he does his own he knows the ins and out of your area. Use him.

Quote:
Originally Posted by Niko View Post
How does one go about picking a "good" management company? Having gone to college in this town, I know of most of the management companies, but I have no clue which are best from a LL's point of view.
You'll have to ask around. Any real estate investment groups in the area? Any apartment associations? Attend a couple of meetings and network there to hit them up for references. Also consider asking at Discussion Board, they are a really knowledgeable group with lots of land lording experience. Ask for a reference in the state your interested in.
__________________
HpRyder is offline   Reply With Quote
Old 10-29-2008, 10:36 PM   #25
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by boont View Post
One of these fine fellows I've had for two years now. Great tenants and I'm happy to be doing something for them because what I'm renting to them is prime.

Fortunately or unfortunately, we have tons of these guys looking for housing. So if you can find just one, well they are golden.

boont
Thanks again, Boont. I keep thinking about getting a nightmare tenant. I guess I don't stop to think about the 90% of tenants who are good people.
__________________

Niko is offline   Reply With Quote
Old 10-29-2008, 10:37 PM   #26
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by HpRyder View Post
You'll have to ask around. Any real estate investment groups in the area? Any apartment associations? Attend a couple of meetings and network there to hit them up for references. Also consider asking at Discussion Board, they are a really knowledgeable group with lots of land lording experience. Ask for a reference in the state your interested in.
Thanks Hp. I'll check that website and ask around town. I do know a couple of realtors -- they'd probably have an idea.
__________________

Niko is offline   Reply With Quote
Old 10-29-2008, 10:45 PM   #27
Full time employment: Posting here.
 
Join Date: Nov 2005
Posts: 831
If I were in your shoes, I'd call both your lenders, carefully explain your situation, and ask for advice. I doubt that your story will be the first of its kind that they've heard. If they are smart, they will be looking for an equitable partial-lose/partial-lose arrangement rather than a win/lose or lose/win arrangement. I may be a tad idealistic, however. Good luck with this!
__________________
socca is offline   Reply With Quote
Old 10-29-2008, 10:51 PM   #28
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by socca View Post
If I were in your shoes, I'd call both your lenders, carefully explain your situation, and ask for advice. I doubt that your story will be the first of its kind that they've heard. If they are smart, they will be looking for an equitable partial-lose/partial-lose arrangement rather than a win/lose or lose/win arrangement. I may be a tad idealistic, however. Good luck with this!
In theory that is how it should work. But my experience has been to the contrary.

Even though I have two trust deeds, both are held by the same lender (but, unfortunately, have different investors). I've called my lender. The loss mit departments at most major institutions are overwhelmed right now with these types of calls. I haven't found a way to speak with any "decision makers." I can only speak with employees who basically have a script to read. That script says there's nothing they can do until I've tried selling my house for a while and am at risk of losing my home. Since I haven't listed my house and am current on my payments, they won't give me the time of day.
__________________

Niko is offline   Reply With Quote
Old 10-29-2008, 11:09 PM   #29
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
If I were you I would rent it out and eat the shortage of rent to mortgage payments until your wife is working--you say the move will result in better pay, and you can apply some of the better pay to the house payment shortage.

Then I would save every penny your wife earns once she starts working, until you have an amount equal to the shortfall in the sale price, and then I would sell the house for whatever you can get for it. Personally I would not expect a lender to make a deal with me--I have a feeling that those deals could follow you for a long time, in your credit report, etc.

Your house is just another investment that you have had the misfortune to lose money on. You wouldn't be giving the lenders extra money if you sold for a profit, so why should they absorb any loss? (Note these are generic questions not directed at you personally.)
__________________
Bestwifeever is offline   Reply With Quote
Old 10-29-2008, 11:35 PM   #30
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Quote:
Originally Posted by Bestwifeever View Post
You wouldn't be giving the lenders extra money if you sold for a profit, so why should they absorb any loss? (Note these are generic questions not directed at you personally.)
I tend to agree, which is why I am leaning toward what you suggest. Perhaps I'm a bit old-fashioned, but I also believe that one should honor deals made at arm's length, especially if one has the means.
__________________

Niko is offline   Reply With Quote
Old 10-30-2008, 05:51 AM   #31
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Quote:
Originally Posted by Niko View Post
How much do management companies typically charge? Is it a percentage of rent, or a flat fee? Why would there by a 60 day down time?

I actually think our finances could muster a 60 day down time. We have $5-6,000 saved now and could have $8-10,000 by YE. Moreover, I (already!) get a raise (7-9%) at my new job effective Jan 1. For a number of reasons that aren't relevant here, we should get a $4-5,000 tax refund in Feb/March. Finally, when my wife resumes working in August, we should have a net increase of $2,500-2,800/mo.
Usually the rate is something like 7-10% of the monthly rent (depends on services provided to some extent). Additionally, some percent of the initial monthly rental charges (maybe like 50% on a 1 year lease up to 100% on a 3 years lease). I said 60 days as a general "rule of thumb" as a time between tenants (cleanup, painting needed repairs, etc., and the major one is the rental market in whatever area; some are slower and some rent up quicker). It varies and can be reduced somewhat if there is a "showing clause" in your lease whereby the property can be shown to prospective new tenants while the old tenants are still there (usually within 60 days of the lease expiration) if they do not intend to renew. Most tenants and RE people are not going to like that clause - for obvious reasons (possible liability and/or loss of property through theft).

I did not see all the responses you got and just responded to you question first. Looks like you may have the situation under control now. Good luck on the new job.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 10-30-2008, 07:31 AM   #32
Thinks s/he gets paid by the post
simple girl's Avatar
 
Join Date: Sep 2006
Posts: 2,505
Quote:
Originally Posted by Niko View Post
Thanks for your input, SG. I'm inclined to try managing myself. I know a handy man in the area. He does his own work on 8 or so rentals he owns. I suspect I could talk him in to covering mine too for a reasonable price. How does one go about picking a "good" management company? Having gone to college in this town, I know of most of the management companies, but I have no clue which are best from a LL's point of view.

As someone else mentioned, I would ask around for opinions from the local community, if you can get them. I think it is really tough to know ahead of time how good your mngmt company will be. Ours does a decent job, but it's not stellar. They took a LONG time to fill the unit the last time. They have had repairs done without contacting us first - we just get a bill (we question the costs/charges). They have taken forever to fix accounting errors, and we have to pester them to get resolution. When we ask for something to be done at the property (like an inspection), it seems to take forever to get it scheduled and completed.

We couldn't find a regular realtor or handyman to show the property and manage it for us, otherwise we would have gone that route. I'd say if you trust the handyman you have in mind, you may be better off than going with a big mngmt company where you may be one of many clients. Plus, you are a RE attorney, so you can write up your own leases, etc. Sounds ideal to me!

P.S. Don't forget to change your homeowner's insurance to a landlord's policy, plus, if you don't have one, you may want to get an umbrella policy, too, for the extra liability protection.
__________________
simple girl
less stuff, more time

(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
simple girl is offline   Reply With Quote
Old 10-30-2008, 08:08 AM   #33
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Quote:
Originally Posted by Niko View Post
I have offered a deed in lieu, but they won't consider it until I've had it on the market for a long time and I'm in default. Even if I market the property and am in default, the DIL is problematic with two trust deeds. My fear trying settle up with #2 is that the will not settle for peanuts once they see my earning potential. They may take their chances in court knowing that I am not judgment proof.

Talk to a bankruptcy lawyer. In the past, I have successfully done this even when there are two mortgages/trust deeds on the property.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 10-30-2008, 11:31 AM   #34
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Problems is "any" sale - short or conventional - will take MONTHS. I just pulled one off the market after holding it vacant for a YEAR ... yikes! At $1600/month and the house will need to be vacant (add in utility costs) to be sold ... this is not a pretty option. Rent it out, eat the negative cash flow until the market improves. Probably better to bleed slowly in this situation.

Try renting with the option to buy ... you should be able to cut the negative cashflow about in half (by crediting it to a down payment).

That's my 2 cents.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Options
Old 10-30-2008, 05:03 PM   #35
Dryer sheet wannabe
 
Join Date: Sep 2008
Location: San Antonio
Posts: 14
Options

Take your time and think it thru carefully. Remember that if you plan to buy a house in your new location you might have to be in really good financial condition to qualify for a new mortgage. I dont think it will be as easy to get into a new house. Getting into a house over the last few years has been very easy by comparison.

With gas prices coming down so much you might consider a two hour commute for a short time until things settle down. Your family might be able to ease the commute if feasible so as not to make it daily one.

Renting looks like it might be your best option. With the economy in turmoil renters might be easier to come by at least until you can get out of this house. There are many advantages to renting real estate. You can write off a lot of stuff. Find a tax guy to help you out. You may be able to offset some of your new salary increase or at least the tax burden with the rental.

You want to sit down and talk to your wife about delaying school just until the house is sold. Another income may help you get out of it faster.

You have a lot of options and decisions to make. Just take your time and think it thru carefully. You dont need to end up with more debt. That basically negates your raise...
__________________
Texican is offline   Reply With Quote
Old 10-30-2008, 09:11 PM   #36
Full time employment: Posting here.
 
Join Date: Oct 2006
Posts: 898
Seems like you can finance the negative cash flow from current savings and the security deposit you might take for a rental, for at least a year, easily. I'd check with an accountant to determine how much in tax savings you might get from depreciating and taking a loss on the rental unit, if possible. It could be that if the negative cash flow is tax-affected, you're actual "loss" is not that great for this year. If the rental market could bear future increases for your property, you might be able to hold on to it for a while, without badly twisting in the wind.
__________________
Someday this war's gonna end . . .
ChrisC is offline   Reply With Quote
Update
Old 06-20-2010, 03:00 AM   #37
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Update

I thought I'd update the group, nearly 2 years later, on how all of this played.

My wife and I decided to rent out our place for a while to see what the market did. We found renters who paid $1045 (near the upped end of my estimate) per month. They were good renters who stayed there from December 08 until April 09, when they decided to leave early. We negotiated an "early termination" fee that, frankly, both of us were happy with. They were happy because they wanted to buy another house, and I was happy because I wanted to sell the house that summer and the early fee let me put the house on the market before the summer rush while still covering my mortgage a while longer.

House hit the market, I believe, in late May 09. Had an accepted offer by mid June. Closed around mid July 09. All things considered, we got lucky with the sale process.

In the end, we had to bring $30k to the table to pay off the loans. Rather than walk away or seek a deed in lieu, as I proposed earlier, we paid it all. About 40% came from our emergency fund, 35% from my Roth IRA (penalty free distribution of prior contributions), and 25% from a 0% credit card offer, which I have since paid off. This hurt, but in retrospect I'm glad I chose this route rather than trying to walk away or pay less than I owed.

The whole experienced soured me greatly on real estate ownership, though I shoulder the blame on this one for financing 100% in 2006, at the height of the bubble. Lesson learned. If that's the most expensive lesson I learn in my life, then it's all down hill from here!
__________________

Niko is offline   Reply With Quote
Old 06-20-2010, 06:14 AM   #38
Recycles dryer sheets
 
Join Date: May 2007
Posts: 148
Quote:
Originally Posted by Niko View Post
I thought I'd update the group, nearly 2 years later, on how all of this played.

My wife and I decided to rent out our place for a while to see what the market did. We found renters who paid $1045 (near the upped end of my estimate) per month. They were good renters who stayed there from December 08 until April 09, when they decided to leave early. We negotiated an "early termination" fee that, frankly, both of us were happy with. They were happy because they wanted to buy another house, and I was happy because I wanted to sell the house that summer and the early fee let me put the house on the market before the summer rush while still covering my mortgage a while longer.

House hit the market, I believe, in late May 09. Had an accepted offer by mid June. Closed around mid July 09. All things considered, we got lucky with the sale process.

In the end, we had to bring $30k to the table to pay off the loans. Rather than walk away or seek a deed in lieu, as I proposed earlier, we paid it all. About 40% came from our emergency fund, 35% from my Roth IRA (penalty free distribution of prior contributions), and 25% from a 0% credit card offer, which I have since paid off. This hurt, but in retrospect I'm glad I chose this route rather than trying to walk away or pay less than I owed.

The whole experienced soured me greatly on real estate ownership, though I shoulder the blame on this one for financing 100% in 2006, at the height of the bubble. Lesson learned. If that's the most expensive lesson I learn in my life, then it's all down hill from here!
For what it is worth, it sounds like you guys are people of integrity. Congratulations on getting out of this situation. I think what goes around, comes around---you are due for better things next time you venture into the RE market.
__________________
stephenandrew is offline   Reply With Quote
Old 06-20-2010, 08:13 AM   #39
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
What's nice is: with your credit intact, you can buy back in at a much lower price in a better city and re-coop to loss when things improve.

A short sale or walking away would have left you on the sidelines for a long time.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Old 06-20-2010, 08:26 AM   #40
Thinks s/he gets paid by the post
73ss454's Avatar
 
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,378
With all the people I know ripping off the banks with phony claims on real estate it's good to see you stand up and do the right thing. If the worst thing that happens in life is a loss of 30K on a real estate deal then Life is Good!
__________________

__________________
73ss454 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
The REAL Real Estate Appreciation Rate honobob FIRE and Money 158 06-21-2009 09:46 AM
Real Estate - what should we do? cj Life after FIRE 50 12-17-2007 12:01 AM
Real Estate Agent in Down Real Estate Market TromboneAl Other topics 4 06-09-2007 11:20 AM
What Real Estate Bubble? Art FIRE and Money 76 11-09-2006 03:33 PM
Real Estate mangodance FIRE and Money 12 06-27-2005 09:36 AM

 

 
All times are GMT -6. The time now is 06:28 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.