The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

REAL ESTATE Short sale then Foreclosure...

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
Well...Here i go again planning on moving.:nonod: I just moved to this current home last year. Sad to say i cant afford it any longer and i've exhausted my equity line. I should've seen this coming. I kept getting money out to support and pay my mortgage to keep up with this home and my family. Finally decided to let go and move and just rent??? You guys tell me if this makes sense. My payment on my mortgage is $2900 first and second combined P&I 30 year loan on first and 25yr i think on second. Cannot refi since i just bought it last year and it cost less than what i owe on it now. Finally found our home that's perfect for us with great location, nice neighborhood area, good school, close to family and not too big of a home for us 2200sq ft home. I love this home!:smxD: Only thing thats wrong is the financial part.:nonod: Does it make sense to rent like around $1500 to $1700 and and save the rest of money for other things? At least this way i wont have to pay property insurances, taxes etc... I figure rent in 3 yrs for $2900 = $104400! If i rented $1500 for 3 yrs = $54000! If i did this i would save $50400! Thats money i can use for other venture such as business, investment etc... Maybe then i can live below our means and hoping i can come up with something that will give me all the money to even possibly purchase my home in cash! Does this make sense you guys and gals? What are your opinions?

My plan is try to put in market to sell it while we're moving this month probably? I wouldn't make payments anymore... So i guess no payment for october, november, december while its on market trying to sell. If it doesn't sell then bank will do foreclosure for non payment january time since i'm not in the house anymore. I never thought i would do this but i have no choice. I have great credit and now it'll take a huge blow suddenly! I'm thinking i wont be able to buy a home again for investment the proper way in 5 or so yrs! arghhhhhhh.......... There goes my part of leverage down the drain!
 

Don't like ads? Remove them while supporting the forum. Subscribe.

hakrjak

Bronze Contributor
Read Millionaire Fastlane
Sep 15, 2007
1,978
142
88
Colorado Springs
This is the second home you've posted about here that you've gotten emotionally attached to. It sounds like you've overpaid, and overspent your budget -- and now you're in big trouble.

In this market you're going to have a hard time selling, and the rent isn't going to cover the mortgage payment -- So you're going to bleed for awhile either way. Question is which would be less painful?

If you move out and rent this house, you need to move into a 500 sq ft apartment for awhile just to be able to afford all these negative cashflowing properties you have. That's a bitter dose of medicine to take :(

- Hakrjak
 

nomadjanet

Contributor
Aug 28, 2007
310
55
26
TX
Pardon me but why would you refi to make the mortgage payments? If you can’t make the current mortgage payment what would make you think you can make an additional one? Only about 25% of your income should be for your main residence if you want to be able to have a life & do some investing. Is your combined household income 11,600.00 a month clear? If not you can’t afford this house there is no maybe or what if there just is you can’t afford this house. Earn more or spend less or both.
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
Its time to retreat and regain myself. Will rent somewhere around $1500 rather than be paying $3000. In 5 years i will come back again and be in a better and educated situation. Just looking forward to the future of all this for my family. I'm taking a dive for now and take the blow from all this. :smxB:
 

Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
211
49
Talkintoy: Not sure if you're married. If so, is the house in the name of one of you (not both). Hopefully so... because if that's the case, only one person gets their credit rating trashed.

My husband and I ALWAYS ALWAYS ALWAYS buy property in one of our names only as sole and separate (necessary wording for community property states). That way only one person's credit rating takes the hit for the loan and if (god forbid) everything went down, only one person would have a credit problem. I've counseled people through my website on how to go through that - if they've got the properties bought right (one name only), keep one person's credit rating intact for the next deals.
 

reipro

Contributor
Sep 27, 2007
156
44
36
51
Lincoln, NE
Talkintoy,

There are other options to look at here. How much is the payment on your first mortgage? Can you afford just the first? If you can then do not pay the second only pay the first. The odds that the second will foreclose since there is no equity left in the proerpty is very slim. Once your second has gone 6 months with out a payment the bank is forced by FDIC rules to charge the loan off. This when it is a great to to get them to take less than what they are owed.

I hope this helps!
 

8 SNAKE

Contributor
Aug 15, 2007
239
44
25
Midwest
Does it make sense to rent like around $1500 to $1700 and and save the rest of money for other things? At least this way i wont have to pay property insurances, taxes etc... I figure rent in 3 yrs for $2900 = $104400! If i rented $1500 for 3 yrs = $54000! If i did this i would save $50400! Thats money i can use for other venture such as business, investment etc... Maybe then i can live below our means and hoping i can come up with something that will give me all the money to even possibly purchase my home in cash! Does this make sense you guys and gals? What are your opinions?

Your numbers here are seriously flawed. Your "projected" savings of $50,400 is based on the fact that you're actually making the $2,900/month payments that you have now. Based on your post, you're not. You're borrowing money you don't have to pay a mortgage you can't afford.

Best to start from square one. Work out a budget and figure out exactly how much you can really afford, then start shopping for a property to meet your needs.
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
Talkintoy: Not sure if you're married. If so, is the house in the name of one of you (not both). Hopefully so... because if that's the case, only one person gets their credit rating trashed.
Yes married. :) 1st and 2nd home was in just my name and our current home is in both of us. I should've just put myself only again, but i thought this was it for us in moving since house, location, etc... is perfect. :nonod: Its just the damn mortgage.

Went to real estate yesterday to sell all the home and felt really bad specially the prices i had to sell the homes that we thought was really our home but our lives changed as we learned the area more and more.

I meant no harm to my family, but i feel that i failed them. The only thing thats making me strong is looking toward the future for better things and possibly more than what we have now.

I bought our first home so we can have a home and not waste our rent money. It was also affordable even it was 1 1/2 hours away from my work. I suffered this for better future for my family and saw an opportunity (i thought) to buy a Brand new home at 100% no money down financing and refied the first to that ticking time bomb loan. New home area division built and location took a dive so then it was time to move on. Mostly became investments instead of family homes. It was like a ghost town with yard all messed up. School system was bad i noticed since my kids are growing up already and one was in High School. My kids didnt feel comfortable going out having fun with friends since it was mostly hispanic in area and school. (Nothing against hispanic). I knew how they feel since i went to school and area of mix race. They were just more comfortable being around thier race for some reason. Maybe i need to take them back to our country and culture so they can learn where they came from.

So then i took advantage of the market last year 2006 to be in a better location, area, school etc... 2nd home was refied to that loan time bomb once again and did 100% financing on current home but with your typical 30 year homeowner someday loan. It was a great rate 30 year loan. But i thought if i cant even keep up with it in a year what makes me think i can stay that long to make it? It would take at least 10 to 15years to start seeing that money go in the house.

Everything was so nice and it was a relief to get my family out of that city. Then as time moves on i notice we're beginning to sink getting burried since the money that i cant make it in our current home and lifestyle was coming from equityline from 1st(maxed out $64k) and 2nd home (almost maxed out also $18k left from $53k) and needed solution quick. I guess it started when we moved in 2nd home and also moved job to area so i didnt have to commute. My job as a car salesman took me down as i was making commision only. And the owner was the one making all the money cutting all my commision from back end stuff from dealership operation. They gert thier big cuts first then whats left they give me commision on just like the government. If I don't sell no money. :nonod: I should've not let it get this far but oh well i can't go back now kicking myself. Only thing i can do now be angry and use this against me to puch myself and educate myself (from you guys) Get help (from you guys) be strong (like you guys) successful (like you guys) :) and gals (nomadjanet, Diane Kennedy etc... of course) :)

Let me know if I did the right thing to sell all my properties now even its short sale to take the lost. Thats the only thing lurking in my head is if i made the right decision. Dont want to kick myslef again in future.

Thanks again!
 

nomadjanet

Contributor
Aug 28, 2007
310
55
26
TX
Best to start from square one. Work out a budget and figure out exactly how much you can really afford, then start shopping for a property to meet your needs.

Talkintoy, I agree with Snake, determine what you do based on your budget. I am sorry if my previous post seemed harsh. I just think that many people do not understand how much of their income should go to personal housing. Banks allowing people to borrow so much more than they can afford has given many people a false idea of what they can afford.
If you feel your current employment is a bad situation, perhaps you can find some other method to earn money.
As far as your kids going to school; it is difficult when you feel that your family is unhappy but if they are teenagers, it is also true that they can be moody anywhere. My kids are Anglo they went to school in an area that is 80% Anglo upper middle income in the suburbs & they complained about it all the time that it was to "redneck".
You can be happy any where or sad any where. I went to 11 different schools before I graduated from high school & found a way to be happy at all of them. Teaching your kids that adversity happens and it is how you handle it that makes you who you are is the best lesson you could ever give your children.

Good luck & I'll be rooting for you.
Janet
 

8 SNAKE

Contributor
Aug 15, 2007
239
44
25
Midwest
Let me know if I did the right thing to sell all my properties now even its short sale to take the lost. Thats the only thing lurking in my head is if i made the right decision. Dont want to kick myslef again in future.

Thanks again!

I'm a bit confused by your posts. Have you already sold all of your properties or are you just thinking about doing so? Each post that I read seems to indicate one, the other or both.
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
I'm a bit confused by your posts. Have you already sold all of your properties or are you just thinking about doing so? Each post that I read seems to indicate one, the other or both.
Sorry about that...I'm confused also.:) All this things going on at sametime and I don't have much time to actually look at them to see where we're at. Too much time at work i guess.

The sign for all the homes were put up today. First day to try to sell. :nonod:
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
Your numbers here are seriously flawed. Your "projected" savings of $50,400 is based on the fact that you're actually making the $2,900/month payments that you have now.
Actually that's what my mortgage is currently on my home now. Times slow at work i had to get more money to cover my expenses monthly. Thats where i get it most to cover is from equityline from other homes.
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
How much is the payment on your first mortgage? Can you afford just the first? If you can then do not pay the second only pay the first. The odds that the second will foreclose since there is no equity left in the proerpty is very slim. Once your second has gone 6 months with out a payment the bank is forced by FDIC rules to charge the loan off.
My first is $2210. The second is just regular loan and not from equityline. The equitylines came from 1st and 2nd home. My second is just regular loan since i had 80/20 loan. Isn't better to not pay both and use the money to pay back my other debt instead since its headed that direction anyways?
 

randallg99

Bronze Contributor
Aug 9, 2007
1,390
179
92
NJ
you didnt fail because you live and learn.... now you understand how evaluating numbers is much more important than becoming emotionally attached to the property... But I am afraid you havent learned this lesson yet since you still have fond attachments for the property and rentals from another thread...

learn from your mistakes and move on... a lot of tools are in front of you to enter the fast lane.

btw, try to steer clear of any references to ethnicities or backgrounds... I am sure you offended more than one person here...

good luck
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
But I am afraid you havent learned this lesson yet since you still have fond attachments for the property and rentals from another thread...
First time going through this...I bought them homes before to live in and not really for investing it just became that after we moved out from them.

btw, try to steer clear of any references to ethnicities or backgrounds... I am sure you offended more than one person here...
My apology to anyone that got offended. Meant no harm about the references. Just better location was more needed to explain instead.
 

8 SNAKE

Contributor
Aug 15, 2007
239
44
25
Midwest
Sorry about that...I'm confused also.:) All this things going on at sametime and I don't have much time to actually look at them to see where we're at. Too much time at work i guess.

The sign for all the homes were put up today. First day to try to sell. :nonod:

If you're in a negative equity position with all of your homes, how will you be able to sell them? Won't you have to bring money to the table at closing to satisfy the loan balances?

I wish you the best of luck, because this sounds like a tough situation for you.
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
If you're in a negative equity position with all of your homes, how will you be able to sell them? Won't you have to bring money to the table at closing to satisfy the loan balances?

I wish you the best of luck, because this sounds like a tough situation for you.
Thanks for the luck as i will need it! :) Short sale is when bank accepts the offered price than currently owed to satisfy the loan.
 

8 SNAKE

Contributor
Aug 15, 2007
239
44
25
Midwest
Thanks for the luck as i will need it! :) Short sale is when bank accepts the offered price than currently owed to satisfy the loan.

Yes, but has the bank already ok'd the short sale? I don't think you can decide to do a short sale yourself, since the bank is the one holding the note (and owed the money).
 

Talkintoy

Contributor
Oct 4, 2007
153
26
27
California
Yes, but has the bank already ok'd the short sale? I don't think you can decide to do a short sale yourself, since the bank is the one holding the note (and owed the money).
I have to get an offer first then i'll send to the bank and if they take it then its a short sale. At least i tried to sell it, if no offer then its goes to foreclosure as i cannot afford to make the payment anymore.
 

8 SNAKE

Contributor
Aug 15, 2007
239
44
25
Midwest
I have to get an offer first then i'll send to the bank and if they take it then its a short sale. At least i tried to sell it, if no offer then its goes to foreclosure as i cannot afford to make the payment anymore.

Ok, now I understand what you're doing. I hope everything works out well for you. It sounds like you've learned a lot in the process and will come back better than ever once this is behind you.
 

Sponsored Offers

  • Sticky
MARKETPLACE Fox Web School "Legend" Group Coaching Program 2020
Price is going up to $3,000 on Jan 1st. We went through the cost of running it over the last...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
If you read the last message then you know I'm removing my courses from Udemy next month. You...
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
PS. what do you think about the idea of setting up live Busking experiences on Air BNB? I could...
  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
Hi Mj, I just bought it. And reading it. I think is a great idea to write using the stories to...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Just got off the phone with @LightHouse. Having just a 45 minute conversation with him has...
  • Sticky
MARKETPLACE Kill Bigger Incubator
@Kak Thanks for the reply. Whats interesting is that I have an idea that's been cooking which...



Forum Sponsor

sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom