All Forum Posts by: Thomas C.

I have owned one condo prior to the boom I bought in 2003 and sold it in 2006 for Double what I paid for it. I made over $125K + after all taxes and fees and thought wow this is awesome!

That was a "once in a lifetime situation" that I don't see repeating any time soon, at least not in my lifetime.

I have another one I bought pre construction in NC in 2004 and it rents well and does cash flow positive, but the HOA fees keep going up and I later found out the whole complex was built with a cheap roof, siding, and windows and even though its only 8 years old I am starting to get assessments (extra money I have to pay for repairs as a group) on items that should still be good for years.

I want to sell it but I have a tenant with a year lease in it, and plus I am pretty sure I would not be able to get more than maybe 20% more than I paid for it in 2004. I only owe about $70K on it so I may keep it for a while.

If you get the right price and the building is very solid, you may be OK.

It takes a lot of looking to do it. Maybe a 4 unit apartment complex may work out better if you find the right one?

With the down housing market I hear rentals are up in a lot of places.

Real estate is local. Location is very important also.

Anyway, that is my 2 cents from my own experience with 2 condos over the last 8 years....

Best of luck to you!

I am curious that if I have a perfect payment history with Wells Fargo and its former banks since 1990 why would they go out of their way to "randomly check my credit score" and say because of the housing market falling out of my control and having to proceed with 2 short sales, that it would have any bearing on my repaying any money on a HELOC from Wells Fargo?

Also the fact that my home is paid for and worth easy today $250K or so as backing versus say $100K (40% of its value) and my DTI is about 32% currently?

What "Prompts" any bank to "randomly check as they say" a persons or customers credit score?

I also have not yet or do I know for sure that I will receive "any debt forgiveness" from Bank of America nor Chase, just making an assumption that MAY happen? They may come after me for the difference in my loan amount of $140K and the sales price of $80K on the first property and who knows on the second since its still for sale?

Does anyone know or have anyone else been through a fully completed short sale and what happens with it all to the very end? Taxes etc?

Yes, Matt I had a shirt and tie on :-) But thanks for noticing, wink wink ;-)

Joe, I had no other viable options. These are not my home where I live, they are investment properties to earn money from .

I also tried to rent the properties. The first 4 bedroom house was getting $1350.00 per month in 2007 then dropped to $895 in 2010 then I never could get any tenant at any price. I paid $170K for it in 2006 with 20% down and the note on it was about $1,100 so it was cash flowing $150 a month in a growing area (so I was told by the seller) which never came to pass.

After paying the note on it for $1,100 a month on it with NO tenants for over a year I listed it for Sale at the $141K I owed on it and after 6 more months got no offers. So with having paid over $19,000.00 + on mortgage payments I called Chase and they suggested a short sale. So I hired Short Sale Carolina to move it and it took 6 more months and it went for $80K. Trust me I did all I could do to keep it but was tapped out.

On the townhouse located in Calloway Glen in Charlotte (bought from the same company that folded Convergent Acqusitions) it was a 3 bed 2 bath for $160K in 2007, rented it then for $1,250 note was about $1,050. Rents dropped as low as $800 then it also went vacant for 8 months. During that time I even refinanced it for the closing cost of $3800 to drop the rate to 6.5% and right after that my management company (Park Ave Properties) could not find any tenant. They put a section 8 tenant in there at $795 a month and she stayed 4 months and only paid for 1 month. It took 3 months to evict here.

She left the place a wreck, so I paid to repair it and they never could find a tenant for it. I payed the $1,050 note on it for almost a year, and I am still paying the HOA Fee's each month at $135.00 per month on it now.

I called Bank of America and they said "Either pay us the $136K you owe on it, let us Foreclose on it or you can apply for a short sale. That is what I had left as an option after paying about $13,000 in mortgage payments with NO tenant in place or other income coming in.

This townhouse in Calloway Glen in Charlotte is a very nice 3 bed 2.5 bath with his and her sinks, and a 1 car garage end unit. Nicest largest unit in Calloway Glen and is up for short sale today accepting offers. So far one offer at a LOW $67K with $136K owed. Comps are about $80K to $100K today from my internet search but I think this complex has about 10 for sale now, but not as nice as ours. So no telling what will come to pass.

Note: On a good month our other 4 properties total only cash flow about $600 to $800 total a month if we don't have vacancies or repairs etc. So no extra money to "prop up" these sinking properties and I did not get any bailout from the government either.

Our house hold income from our jobs is a little under 6 figures a year and my credit score was near perfect! 815 was our middle. Now I am sure its in the low 600 range and Wells Fargo says it will take 7 years to "cure" this with them.

Just trying to figure out what happens now with the taxes or capital gains on any bank debt forgiveness etc on these 2 properties and how to move forward and keep making money in Real Estate?

Again I thank each of you for your suggestions, support and feedback, constructive or otherwise!

[i]Steven Hamilton II

In regards to your capital gain statements. You will treat the FMV of the home at time they took it over plus the amount of the loan cancellation as the sales price on Form 4797 when the bank actually sells the property.

In regards to your capital gain statements. You will treat the FMV of the home at time they took it over plus the amount of the loan cancellation as the sales price on Form 4797 when the bank actually sells the property. [/i]

Steven, Thanks for your response, but I am new at this (at least a short sale) and 90% of what you said went over my head could you please break it down for me in simple terms?

Also one posted said did I "expect to have 0 negative effect".

Just to add some more specific details to my saga, here are the facts:

Well on the 4 bed 2.5 bath 2 car garage Charlotte NC house I paid $170K for and put down 20% CASH with closing it was about $40,000.00 I lost up front.

Short sale don 1/12/12 for $80K Net $70K on a owed amount to Chase for $141K. I paid $170K pre construction in 2006.

On the pre construction, 3 bed 2.5 bath 1 car garage Townhouse in Charlotte NC, I paid $160K for and put down 20% CASH and with closing it was about $35,000,00.00 I lost.

This one is still in motion with Bank of America and has an offer of $66K on a $136K loan that I paid $160K for in 2007.

So to me losing $75,000.00 CASH in 4 years, on top of a short sale is not a 0 negative effect.

NOTE: At least I have 4 other properties in NC that are cash flowing a few hundred dollars a month and rent well for the area market. Thank God! ;-)

I greatly appreciated all the wonderful feedback, Thank you all!

Nathan and Brian,

Thank you both so much for your post. They both made good points and made me reflect and think. "Take your medicine" "Soldier on" ... good words of wisdom. So Kudos for that.

I was always used to being the most handsome guy at any party in the world (at banks) now I am the ugly duckling and its hard to take. Trying to figure out the best way to fix it?

What other viable options do I have to get money to:

1. Pay the capital gains on the about $150K in debt forgiveness from Chase and Bank Of America? I "assume" I will get a 1099 for the lost money or the difference between the amount we owed and what was left after the short sale?

To be honest this is my first short sale so I really don't know what to expect?

2. Get more money for investing in good rental properties since there as so many deals all over the country?

Thank you in advance for your expert input and advice.

Thomas

I am very upset at Wells Fargo Bank. We had been with the former banks Wachovia etc. since 1989 and NEVER had any late payments on anything!

Now Wells Fargo Bank - CEO John Stumpf recently received $25,000,000,000.00 Billion in Bailout Money and has closed our Home Equity Line of credit which was at 2.25% of $100,000.00 (with only $22K owned on it) against our paid for home valued today at $275,000, just because of a short sale on 2 investment property in NC we bought in 2006 and closed on in 2007.

Is this right? I have talked to 4 or 5 "Executives at the Bank" ie: Kathy Crowder, Debbie Clausen, Patty Harvey, Leslie Murdock and a few others who all read from the same script saying... we appreciate your many years with the bank but it will take 7 years before the 2 short sales "drop off your credit report and we can re-open your line"

It is Bull! All they want to do is to open a new HELOC at some out of this world rate of 12% or so is all. Wells Fargo and John Stumpf CEO, likes to kick you when you are down, even though they took $25 Billion in government bailout money which was mine and yours Taxpayer dollars. Unreal?

The housing market dropped 50% and the rental market went down 30% to 40% around Charlotte NC. After almost 4 years of loosing money on 2 properties there and not having tenants we had to short sale them both. One was sold in Jan and if Bank of America approves maybe the other one will be gone in March 2012. Each property is bringing in about 50% or so of what is loaned on it?

As this is my first short sale ever......So what happens now?

This wrecked our credit score from 815 to 630 (Last time I checked it)

John Stumpf the CEO of Well Fargo Bank took $25 Billion Dollars of BAILOUT MONEY and then don't want to lend to people who are able to pay it back. This is why the country is in so much trouble! God Help Us!

If something like this has happened to you then, What advice "if any" do you have for me?

John Stumpf, CEO of Wells Fargo HITS THE JACKPOT with $25 Billion in Bailout Money - Now what are they doing with it? shhhhh we want tell you?

http://www.cbsnews.com/stories/2009/02/09/eveningnews/main4788018.shtml