Advice on a horrible situation

[Larry Spradling]

Two years ago, I was brand new to real estate and transferred my IRA to a self-directed IRA. I was introduced to a company called Growth Equity Group that specialized in turnkey rentals for folks like me who had IRA funds to invest. I thought I knew enough to move forward, but clearly didn't ask enough questions or exercise enough caution. I received a letter last month from the mortgage company stating that my loan was going to go into default if I didn't make the last 4 payments. Turns out that the tenant wasn't paying rent and the property manager didn't bother to let me know what was going on. I got that straightened out and then started digging more into the property. After running the numbers, my monthly cashflow is NEGATIVE 22.00 a month. I talked to the property manager about selling the property so they sent me a market analysis that shows the average comp is $40,000 to $50,000. I paid $100,900 for this home two years ago. I owe $62,000 on it. This is so upside down that I don't know what to do. Would greatly appreciate some advice. What I don't need is a lecture. This is my fault as I knew just enough to be dangerous and now I'm paying for it. At this point, negative $22.00 a month seems less costly than taking a multi-thousand dollar hit by selling it for signficanly less than what I bought it for. Am I right in this thinking? Are there other options I should consider?

[Joseph ODonovan]

@Larry Spradling Just to clarify, the turnkey provider is out of business? Does your PM have any relationship with Turnkey? Why didn't your PM notify you that your tenant was not paying rent?

Based in the info you provided, I would immediately fire PM. Can you self manage the property? If so, do it now! You need to be hands on with this. By self managing, you will probably cash flow positive. If the PM's market analysis is truly accurate, then selling it would create a $50K loss. That being said, you should do your own market analysis as I would not trust the PM's data.