Is my Investing career over?

This is my first post here…
When the market was up I bought three houses out of state in NC…Im in Ca.
I also bought a condo in Knoxville, and a condo in Miss.
I already had two triplexes in Ca. and two houses in Ca. which I still have.
Now that the market has turned I cant sell anything, I have had two vacancies since June, and Ive been on disability since June.
I cant refi. my residence, I am facing a hard money loan, and I am seriously considering forclosing on some of the out of state properties.
Has anyone faced this kind of scenario and gone through it to end up in a better position than before, or am I screwed??
Thanks

Of course you are not screwed. What is your exit strategy? Are you trying to rent these properties or are these flips?

All of my properties are rentals.
I am really sorry that I bought out of state and I would never do it again.
I didnt anticipate the current market, so my strategy was to hold for a year or so and sell. I dont mind holding on to the local stuff, but I dont see any turnaround for the out of state stuff for many years, and I am losing money every month on these, which is why I am looking at possible deeding them back to the lenders, which could ruin me for future investing.

Hate to say it but the hardest investing mistake to fix is buying a property wrong. Can’t go back and change the price.

How much money are you losing each month on each property?
What are the values of each property?
What are the mortgages of each property?

I have two vacancies which cause me to lose about 2K month.
I cant sell the properties for what I owe. :banghead

Foreclosures won’t end your career, but they will hurt your personal credit. You can still buy/sell using sub2 and lease option.

Have you contacted the renters in your out-of-state properties? They might be willing to L/O from you.

Thank you everybody,

The listing agent mentioned a poss. lease option on one of the properties.

Does anyone have any predictions as to when the markets will start turning around?

Dont beat yourself up… My goodness all you need is a deal or two to turn your life around… Just this last week I contracted to purchase a house that looks like I will make 100k without using my credit or cash. Although I did invest 500.00…

Cheer up… Good times are coming… Just learn to buy property without credit or cash and youll be fine…

Michael

I’m all ears, Micheal… :help

What part of california are you from?

I’ll take it, Thank you.

I live 30 minutes from there.

Have you thought about lowering the rent price on the out of state properties for a year. Sure they won’t give you a positive cash flow, but they’ll give you something. A small loss is way better than a huge one.

One of the vacancies was due to an eviction…it hasnt actually been vacant since June, but I havent rec’d rent since June.
It took about 3 months to get them out.
I just dropped the rent on that one.
The other one is a condo…there were so many vacancies in that condo complex that property management put us on a list to be rented…I am still waiting for “my turn”.

Re: the condo. It is against federal law for your PM to tell applicants that there is only one unit available when there are multiple units. They are required by law to tell about all the open units and to show them all, or at least show all that the applicant wants to see.

I suggest that you upgrade your condo so it is better than the rest of them. Then, if there is one applicant, they will take your unit instead of one of the other identical ones.

If your manager won’t show your unit, you need to fire him and get another manger who will show.

And, by the way, if your PM is steering tenants to specidfic units, not only is he commiting a crime, but YOU can get sued over it, too, because he is your legal representative and the courts will make the assumption that he is carrying out your orders.

Tatertot,
That condo association is a cesspool of unethical activity.
Someone was fired for taking bribes to move units up “on the list”…the concept of a list sounds wrong to me, but it appears that all of the owners have been abiding by it…I dont know, its a mess.

Welcome to the Forum.

I’m sorry to hear that you are on disability. Is there any way that you can continue to work without aggravating your disability? Can you afford to continue on disability?

When making your decision to sell, just remember that these properties will sell for a lot more when the pessimism of the day has subsided. Also, calculate holding costs in negative cash flow versus a reduction in ask price now. Sometimes monthly negative cash flow can be offset by tax depreciation and write offs and principal pay down on your mortgage notes.

If your units are not renting, lower the rent 5-10% per week until they do. If your property manager is not doing his job, find another one. …“list to be rented”? …“waiting for ‘my turn’.”? The property manager is either making excuses or thinks your unit is too much hassle, or your rents are too high. Even if he does not like the unit/terms he should let you know this, not give you this kind of nonsense. You don’t need to use the property manager that everyone else in the complex is using, find a good one.

Get out of your hard money loan. Given that you have both negative cash flow and a hard money loan, you seem to have a problem with you initial strategy. Go back to your business plan, and modify it. Use the search feature on this website to search “cascading debt reduction” and “investing out of state.”

I would take a hard look at all of your financing. Perhaps infusing more cash would result in better terms. A good place to start would be going to the banks that have the loans and try to negotiate a refinance/new terms with them. Since you are on disability, you may be able to work out new terms with no cash up front. Next, pit mortgage brokers against one another until you find one that is smart and competent. The numbers will tell you which ones have what you want, and which ones don’t. Be sure to be educated when you are dealing with these people, they still have a lot of garbage mortgage products and debt instruments out there that no one should like (except the lender).

You can let each property go into foreclosure one at a time without affecting the status of your other loans, but only consider this as a last resort. When you default on a loan, the creditor can sue you and garnish your future wages. With a foreclosure on your record, your borrowing options become limited, and usually more expensive.

I believe that in July of 2009 most of the problems created by collateralized debt obligations will have run their course. It is also reasonable to predict that since the population of many cities in the United States is going up, and since new construction has come to a near stand still, that we are in for another boom cycle when existing inventory is absorbed. Please realize that I am not suggesting a buy, hold and pray strategy.

I don’t think that your screwed, but you have work to do. You can usually turn a problematic portfolio around, but it may take time and money.

tatertot,

tatertot,

I wonder if the condo is really a condotel catering to short term rentals (days and weeks). The management company has so many units under management and not enough reservations to fill the inventory. When this happens, your unit goes into a queue – last one vacated goes to the bottom of the stack. As a reservation request comes in, the unit on the top of the stack is filled. You get filled when your unit bubbles up to the top of the stack. As soon as it is vacant, it goes back to the bottom of the stack where it has to bubble up again.

Every owner gets an equal shot at a tenant, and over time all units will be rented for about the same amount of time throughout the year. All units are essentially identical with identical amenities and daily rent is the same for all – just like in a motel.

I might be interested in the NC properties if you want to dump them or let them go to foreclosure. Where are they, and what are they (SFR, condo, manufactured home, etc)?

Dave,
I sent you an email.
Funder,
I dont yet have a hard money loan, but am facing one, since my reserves are way down and my fico as well.
My lender is saying that if I get a short term hard money loan with no prepay I can cash out of one of my local rentals and pay off some debts, raise my ficos, and still have enough reserves to get a conventional refi.
I personally think that the market will turn in the summer of 09…(my guesstimate) and my question is if it is worth it to hang on to all these properties and ride it out until then.
When the market DOES turn, I may regret having sold anything…