This is a complex one, and I need immediate input, so I thought I’d post it here.
This is a semi-cry story, and its long; brace yourself.
In May of this year, my now ex-wife decided she would get a divorce. Mostly to take the money, the kids and the house. Due to that, I was out of the real-estate business for most of this year. In April of this year, I bought two REO properties in Toledo, Ohio - I live in Utah. I paid $7,000 for each. The person that sold me the properties claimed that he was going to property manage. I paid him $1,500 per property to do that. As I said, the divorce consumed pretty much all my time from May until November 4th when it was finally completed.
On November 5th, the city of Toledo sent me a Nuisance notice concerning one of the properties I bought. It basically said that I have to either fix the property or demolish it, or the city would demolish it for me and send me the bulldozer bill. Demolition bills typically cost between $10,000 and $15,000. The proceedings from my divorce require me to pay $1,160 per month in child support. On top of that, I have to cut my ex-wife a check for $19,071 by December 1st.
Upon getting the notice from Toledo to fix the properties, I wanted to skip the whole damn country and fly to Spain. Haha! I speak fluent spanish. A few minutes after I had that thought, I just told myself to buckle down and get the job done! So, I started calling the Toledo Real-Estate Investing Association. Within a few days, I had a solid general contractor lined up to fix one of the properties. He gave me an estimate of $6,000 to $10,000 to rehab one of the properties like it needs to be.
Once I got the city nuisance notice, I started to call around to find out what happened to the “property manager” that initially sold me the houses. Turns out that he was just a middle-man who bought the properties from another company and re-sold them to me. That’s fine; nothing wrong with that. I contacted the original company and came to find out that the “property manager” embezzeled $20,000 from that company and skipped town to somewhere in New York. Fortunately, I did purchase the properties and have title to them.
So, I began to call the utilities to get that next part taken care of. I came to find out that I had actually bought two duplexes instead of just SFH. Bonus. On one of the properties, I came to find out that there is an outstanding $3,025 water bill. Seems somewhere between January and April, the water had been left on and flooded the place before the city finally decided to shut it off. Not a bonus.
Despite all that, I listed the water damage property on craigslist and actually found a buyer for the property that was very interested in doing the fix-up work herself. I negotiated and she agreed to pay me $13,000 for that one on a rent-to-own at $280 per month until paid for. I am presently in the process of having her sign a lease agreement and put the property under a land contract for the sale.
The other property that is having the ~$6,000 rehab done on it, the contractor owns a dozen or more properties in Toledo that he rahabs and property manages. He says that he can do the same for this one and rent out both parts of the duplex, probably for $280 a month each side.
Oh, and the ex-wife and I had a “rental” property foreclose on us in July 14, 2009, and we are currently not making payments on the marital home (per the divorce stipulation) and she’s living in it while I am stuck in a 1BDR $575/month apartment. Don’t really know if that has any significance on any of this, but, like I said, this is a semi-cry story. Haha! :help
Oh, Oh! Chase Manhattan has our mortgage on the marital home. Due to us not paying on the property, they put a hold on all my accounts with Chase until I pay them off. So, on top of having a foreclosure on my credit, plus over 12 months of late payments on both 1st and 2nd’s, I don’t even have credit cards to fund any of this, much less loan possibilities of any type.
Ok, I think that’s it. So, presently, I have the ball rolling on both properties. I have the city lined up to get utilities on. I have rehab being done on one property, with parts on order. The guy doing the rehab is well known in the local REI Association and will double as property manager. It should be ready to be rented by mid- to late- December. I have a rent-to-own tenant buyer in the other willing to do all the rehab, since she will eventually own the house anyways. I have $19,071 check to pay to my ex-wife by December 1st, and I think I’m gonna tell her to stuff it and use the money to make these two properties function. I’ll still pay the child support.
I met with a bankruptcy attorney today and he said that my ex-wife truly screwed me over in that if I filed now, I would end up paying around $122,000 when it was all said and done. If her and I would have filed jointly, we would have paid the bankruptcy attorney $2,000 and been done with it all.
So, what is everyone’s ideas, suggestions, advice, criticism, tips, tricks, sorrow, pity, pain, remorse, wish me the best of luck? In the end, I’ve been around enough, read enough on these boards and elsewhere, been to enough guru seminars, can find the contacts and people to make the project happen, am intelligent enough and tenacious enough to get this done; I just gotta do it without having a catastrophic panic breakdown. Hahaha! :bouncemulti Still, I wanted to get as much brainstorming involved that I could as this is the first remote rehab/landlord I’ve ever worked. Thanks.
Dean