Need advice on selling

[Christy Snoke]

At the spry young age of 22 I bought my triplex in Ohio in 2005 for $69k and no money down as an investment to pay for college.  With the help of some family and friends, we renovated and filled the apartments within a few months and then tried to sell.  Couldn't sell but had an okay cash flow at the time so it wasn't a problem.  Fast forward to 2007 when we had a 100 year flood in the city and the market went down significantly.  Then 2008:(  After that no one wanted to buy a home in the flood plane and the market has been problematic, especially for multifamily unites.  The saga continues with my rental property and we are at a point of trying to make a decision, which could be a big loss for us considering our current financial state.  This past summer within a few days of selling the property, I was informed by the city that the house was in violation.  The previous owner back in the early 90's converted it into a duplex then a triplex but never had the zoning changed.  I went before the city counsel on two occasions pleading my case of the injustice.  I bought the house from Deutsche Bank with a clear title and deed.   I was required to change the property from a triplex to a duplex and lost the potential buyer. The buyer was willing to purchase the property at a price that would cause me to lose roughly $6000 compared to the 12-13k that I am looking at now. I have a buyer who is willing to pay $3,000 above appraised value, but it is still roughly $7,000 less than what I owe, not including the $4500 in closing cost. We do not have the money to pay off the loan or the closing costs at this point without putting it on credit cards or borrowing from my parents (closing cost amount). The woman who currently works with my loan has put in a proposal to the underwriters (or whoever they are) to see if they will accept the net proceeds (still not sure if that is before the closing cost or after) and I will continue paying the monthly amount until the loan comes due in July of 2016 in which I will have to come up with the final payoff. The buyer will not buy the house unless the loan is paid off and there is no lien on the house. I am waiting for activity to resume with the bank next week.

Currently, the value of my property is $55k and my loan is roughly $65. My income is still more than my expenses, but there is little left over to make the necessary improvements to increase its value. Furthermore, my current tenants are not helping things! Every year I feel like I come to a point that I have to make a decision. I’m relying on my dad to manage things while I’m here in Texas and has basically said that he would rather see me lose the house or go bankrupt than have to deal with it anymore (he has said this kindly). He will continue helping, but he is ready to be free from the property’s demands. My husband has asked me to get advice from others, but really just wants me to get rid of the place to free us from the hassle, no matter the cost. He did suggest a month or so back that we could  take a loan and put several thousand into it to increase the value and perhaps sell it where we need to. In a way I agree that we could do this, but the market is what it is and there are not a lot of multifamily homes to compare to right now. So, if we put money into it, would we really be doing ourselves a favor? I was thinking tonight that we could use some personal money (right now we have not put any of our own money into it, just what the house is generating) to do some minor improvements that may help it be more attractive to investors.

We also talked about leaving it as is, and look into refinancing when the loan is due in July. The woman I am working with said that with the current market, she thinks the bank will refinance but can’t guarantee anything. If we ride it out in hopes that nothing seriously goes wrong this winter, refinancing in the summer will free up some cash to put back into the property. (Anyone who buys it now will have an awesome mortgage and will generate cash unlike my current situation).

It has also been a thought to beg the bank to accept the current offer on the house and forgive the rest of the loan. The bank knows my situation, I’ve been in contact with them for the last 2 years. It will be somewhat like a short sale, but without the months long process. It is a big bank and I doubt very much that they would take pity on a minion like myself, but I guess it is worth a try.  

I am sorry that this is so long, but I feel like I am running out of ideas.  Thank you for your help.

[Rick H.]

Got lost. What do want, in one sentence?