All Forum Posts by: Steve M.

Thanks for the reply. Deployments and transfers killed me with the low income. I was fine for the first 7 years - made it through the initial downturn without issues. All properties were purchased as cash flow properties, but the money is gone and I can't make the necessary repairs to get the increased rent - plus the neighborhoods have taken a turn for the worst - perfect storm.

However, the SFH homes are fine. The wife and I list, screen and place tenants while stationed across the country - no issues at all (knock on wood).

All the properties are financed through various lenders. A few (4-plex and chalet) have HELOCs

I'm working with a local short sale attorney for the sale and have started the dialog with Bankruptcy attorneys as a back up. Not looking for legal advice, maybe just to hear from someone who has gone through something similar that can give me tips.

I have been investing for 10 years - learned a lot, but made mistakes. I'm now looking for answers to a complicated problem.

Properties are in mostly in VA. I'm Active duty military - 22 years and have been transferred out of the area.

I have 10 buildings; 3 SFH (my previous residences), 4 duplexs (low income), a 4-plex (low income); a 12 unit apartment building (low income); and a vacation chalet (daily rental)

* I manage the SFH myself - no issues good tenants, low repair cost and posituve cash flow.

* Vacation Chalet - negative cash flow, slightly under water (due to HELOC I used to float low income properties). May short sale soon.

* Others having significant issues in the last few years, neg cash flow, underwater, deteriorating etc. Caused by a series of bad PMs, bad contractors, bad tenants. I have fired 3 PMS over the years - the last PM stole nearly 75K - court case pending.

In June I decided to get rid of all the low income properties (except 1 duplex that has great cashflow for years). Working short sales now. I have had contracts on 3 along with bank approved prices - two buyers have backed out at the last minute and I'm waiting to hear from the buyer on the 3rd. No offers yet on the others. I have received a second low ball offer on the first house and have resubmitted to the bank. I have a attorney working with the banks for approval.

I stopped making payments on those that I'm short selling to trip the bank requirement for missed payments. 5 months behind on the 4 plex; 2 months behind on 3 duplexs (may pay next months to keep from going over 120 days); 1 months behind on the 3rd duplex. The 4th duplex and 12 unit building I'm current because they may be regular sale. Current on all others.

Over the past years I have drained most of my savings (I have 28K left). I;m lucky because I have a good job and will have retirement, but need to eliminate the toxic properties.

My current low income PM is doing OK - I get enough rent less her fee to cover about 70% of the low income mortgages - but they have to go and is a slow drain -plus stressing me out!

Obvious solution is short sale but I don;t know if this will work before I run out of time and money. I don't have the money to make major repairs or upgrades for new tenants - so that is not an option. So what are my other options? Do I file Ch 13 and keep the good properties that have equity and cashflowing so I have something for retirement? My other personal debt is manageable - and I'm not behind on any of my personal debt...it just these5-6 bad properties.

Suggestions?? Thanks for taking the time to read.

A good wife certainly helps with the load :)

At 3.25% you shouldn't have a problem getting a cashflow property. In military towns - a good school district and proximity to the base are key. My wife always reminds me that it is the military wife that picks the rental...so keep that in mind when you pick location and do upgrades.

Been there done that - will do it again. Like you, I'm AD too w/21 years service. I have done this 4 times with homes I've actually lived in (plus was able to buy additional properties). Like it was mentioned above - I have them coast to coast. Considerations:

* Buy with cashflow TODAY. Property values may go up and down, but the swing in rents aren't as steep.
* Your PCS time, 3-4 years, will be plenty of time to season the BAH rates for your future tenants.
* Market early to military members
* You can be your own property manager - even from a distance with these "class" of properties. My wife and I managed homes 3000 miles away. IF you get the right tenants, set up direct deposits and screen well. We had to use a 3rd party agent once to place a tenant (show the place etc).
* Get the worst house in the best neighborhood (good schools etc). I wouldn't look for a full rehab, but outdated, needs paint, landscaping etc. Those are pretty simple weekend projects that you can do while working full time. I love unfinished basements.