Investor · Dayton, OH · Member since 2015 · 73 posts · 25 votes
I have a friend who purchased a condo at the height of the market. Purchased for $70k and 6 yrs later has paid mortgage down to $63k. She has since gotten married and moved into her husband's house. She has tried to sell 4 times, with 4 realtors in the past 6 yrs or so. Hasn't sold so she continued to rent it out. It's in good shape with no major repairs, is clean, but needs updated. Top market comps would be $80k, but she has no money to bring to closing and no money for updates. She's been renting it in its current condition at a lower $700/mo just to rent it out quick and break even on her mortgage each month, BUT she continues to have renters move out before their year lease is up. If the condo was remodeled she would have no issue getting $900-$1000/mo BUT she has no money to remodel. She wants out and done. What are her options? Come January she will have no renters, no way to cover her mortgage payment, and will have a hard time selling it at $63k + realtor fees to break even.
Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
10y
@Andrea Castor She doesn't have any options without taking some sort of hit. There is no magic wand, no amazing realtor who is going to make this sell the typical way at a price that will leave her whole. Besides trying to sell it on her own to be able to reduce the price to her break even point, her options are:
1. Let it go to foreclosure. Big hit to credit.
2. Short sale. This is where the bank lets you sell for less than what the property is worth and usually write off the difference. Again, hit to the credit, its a long process, and may not work.
3. Sell subject to her current mortgage. The puts the house into a trust with the buyer as beneficiary. She has to trust that they will make the payments. The loan stays in her name. Her interest rate has to be good enough to make this attractive to someone.
4. Continue to rent it out. Time, stress, and still involved with the property.
I'm a big believer that price sells the property. If there were a magic way to get a lot more for a property without changing a thing everyone would be doing it. It simply has to be priced right for the condition it is in.
Real Estate Broker · Milwaukee, WI · Member since 2014 · 338 posts · 129 votes
10y
She could hire a property management company. Probably cost some where in the $70 a month range. She wouldn't have the day to day task of dealing with the property and could wait for prices to get where she can break even after realtor fees, closing cost, etc.