What options do I have??

Question

I am 66 years old & want to retire. I have 3 properties. I own one free and clear. Number two I owe $64000. & it's worth about $80,000. Number three I owe $91,000. and it's worth about $85,000. They are all in a gated, 55 + community in Fl. with a maintenance fee of $300. a month each. None are rented but number 2 & 3 have been for sale for 2 years. I can retire if I can get rid of number 2 & 3. I have tried to refi but the mortgage co. won't talk to me because I'm not late on any payments. I work and live in N.C. for the co. I have worked for for 34yrs. The only thing I owe is the houses. How do I get rid of these houses or come up with a strategy so I can retire and go home???? I have worked for the past 3 years to make the payments on these houses so I have "done the right thing for 3 years". Got any suggestions????

Cheryl C. · Answer

I share your misery.  I have 3 places in Naples.  I bought awhile ago and they are free and clear.  2 are keepers.  I is a dog - over 55, high fee's and so many stupid rules and restrictions.  I wanted to sell it in 2004 and 2005 but my husband didn't.  Well, it's down 300K from peak and sitting on the market.  I only bought it because it is (was) adjacent to my parents place and I listened to their advice!

I knew better, even way back when.  Water over the dam.  I plan to slash the price and get rid of it.  I'll take the cash and 1031 into something up in DC.  You win some, you lose some.

Rob Gillespie · Answer

Sell them on owner financing. They should move very quickly. You will need to read the rules in the association on how to structure the deals. Some places will not let you rent the units with the option to buy, so you may need to use another instrument. If you think this is the rout you wanna take, come back and ask more details. I am sure we can get you through this so you can retire! Good luck!!!

Jon Holdman · Answer

If 2 & 3 have been for sale for two years without any offers, they're overpriced.  Unfortunately, what might have been an acceptable price two years ago is overpriced right now.

Do you have the assets to bring cash to the table to pay for any shortage?  If so, and it sounds like you do, then getting a short sale or getting a bank to accept a deed-in-lieu is a long shot.  Worth a try, but they will view these properties as a bad investment and expect you to take the loss.  Unfortunately, real estate has a characteristic stocks and bonds do not -- you may have to pay to sell.

I would certainly get rid of two and three and maybe even one unless you're planning on moving into it.  Number 1 is free and clear and selling it may give you enough cash to cover the shortage on the other two.  The first step is to get a realistic assessment of what they might actually bring in a sale.  Then you can evaluate you net profit (#1) or loss (other two) and know where you really stand.

Why aren't these rented?  Are the not rentable?  I do see an issue with the gated, 55+ community.  I'd be reluctant to own such a property unless I planned to live there just because it limits your pool of buyers or tenants.

Carolyn Hancock · Answer

I invested in the rental in 2005. At the time I already had 2 other rentals and they were constantly rented. I didn't have any issues until 2008, just like most others. I have gotten a letter from Chase asking me to call them & have "detailed financial info. available" I have almost $10,000. saved & I sure don't want to give it to them. Will they find it in a savings account???

Bienes Raices · Answer

I think it would cut down on your pool of renters in a major way...

A friend of mine inherited a condo in a 55+ community in Las Vegas a couple of years ago and the lawyer in charge of the estate had quite a bit of trouble finding a buyer, but eventually he did. I don't know if the mortgage was upside down or if it was just the terrible market.

Carolyn Hancock · Answer

Up date & new question. I am letting #3 house go back. You are right, no one would work with me until I missed a couple payments. Chase "said" they would work with me to surrender the house. I will see...it sounds too easy.
My son said he wants to buy house #2 from me & I will rent from him. In round figures I owe $64 & with 30%down he would owe about $44,000. What is the best way to go about the sale, an attorney to over see the whole thing?
Both of these houses are listed with an agent so he would have worked to sell these for 2 yrs for nothing, but I really can't afford to pay several thousand either. Your views, please.

George P. · Answer

it's the first time I hear that someone is buying rentals in 55+ community.

Carolyn Hancock · Answer

A little more back ground. 
House #1 I had built for my Dad to live in after my Mom's death. I paid it off with some of the profit from one of my flips.
He went in to long term care & I started renting it with the thought I would move in when I retire. I still plan that. It had been renting well until the bust in 2008. Now it only rents as a seasonal but since it paid for that keeps it a float. The house is 16 yrs old. Has new roof and AC in 2010. 2/2/1

House # 2 I bought with a 1031 after a flip sale. That is the house I lived in, when I retired for 6 months. I loved the house when I saw it as an investment. It was rented until a month before I moved in. When I had to go back to work
to support house # 3 I left all my personal things there because I intended to move back in 2 yrs.(after I had gotten rid of # 3...dream) I rented it also as a seasonal 3 times, to help with the cost. I would like to rent # 1, full time, so I can afford to live in # 2 for about 3 or 4 yrs. I bought it for $113,000. I owe $64,000. and it would sell for maybe $77,000. This house is 15 yrs old. has new floors, remodeled kitchen and baths. 2/2/2

House # 3  I bought as an investment only. It had been rented since I bought it. The last 2 yr renter I lost $300. a month but at least it was rented while for sale. As the rental market is now I can't rent it for my monthly nut. 
I paid $150,000. I owe $91,000. I talked to Chase & they tell me it's worth $85,000. It looks like doing a deed in lieu may be my best bet. It is 15 yrs old, good shape, just needs up dates. 3/2/2

Thank you all for your feed back.

Mike G. · Answer

Seems like you can either rent out those two houses or sell them.  To just hold them and dump money into them seems like a mistake.  I doubt they are going to appreciate in value anytime soon.  The fact that they've been for sale for two years means that sadly, they are probably not worth what you are asking for.

Carolyn Hancock · Answer

Thank you. I started to do this 3 yrs ago but I'm old school of if you get yourself into it, you get yourself out.
I have flipped 5 houses over the past 10 years and made a very good profit now I feel like I'm  walking away from all that work but I guess you are right,,,,,,
I need to cut my losses. I don't know where to start. I guess just to stop making payments on house # 3. I'm
the kind of borrower the banks love...I work to pay them.
Thanks for your insight.

What options do I have??

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