Mortgage/Financial advice.

[Valenciawatchrepair]

Not sure who here can help with this, but I've had a problem for awhile with an investment property that has been nothing but a headache. Both with tenants and the mortgage itself.

I had vacant land in 2008 and had the mortgage redone to pay for a mobile home and improvements to the land. Original Loan amount $44K.

Fast forward to now, after multiple nightmare tenants, a balloon on the loan that I could not pay off(NO ONE wanted to Refinance a mobile home), and three mortgage companies later(not by choice, they kept selling it.) I still owe $40,847

Payment break down

Total Per month $230.03

Of that $230.03

$66.52 Goes to Taxes and Insurance
$128.56 Goes to interest
$34.95 goes to Principal.


I have deferred principal of $9,236.47 that was added when the balloon happened. Not to mentioned wrecked my credit, but that's another story.

I'm currently in an owner finance situation, but of course, I only have $200 from them for January which they only finally sent a few days ago.

I'm so tired of this property. But, I can't unload it. No one will loan on the home, it's a 1995 model. No one has the cash to buy it. It's in a very small town with not the greatest economy.

Add to that, I recently sold a home we were living in to get a lower payment, but because of switching to self employed I couldn't even get a loan on a lawn mower, much less a house. So, now I'm spending almost $300 per month RENTING now.

[swils8610]

Rental properties can be a tough deal. I had several and sold them off when tax laws changed and because my work schedule made it tough to keep up on repairs. They did however cover the expense and I made a few bucks when I sold them. We have one left which we intend to keep. Try to rent it for more than 230 a month to cover the payment. Screen for a solid tenant. Talk to a CPA and see if you can write any of it off on your taxes. Have considered moving into it temporarily as the payment is cheaper than the place your renting? Perhaps do some renovations while your living in it?


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[GB-man]

Leave your APT. Move in. Make it into a redneck themed glamping spot. Hire a cheap photographer to take good pictures. List it on vrbo for 125 per night includes a case of Busch and firewood

[andromeda160]

Originally Posted by GB-man

Leave your APT. Move in. Make it into a redneck themed glamping spot. Hire a cheap photographer to take good pictures. List it on vrbo for 125 per night includes a case of Busch and firewood

Probably the best idea so far. Can't believe rent is so cheap there.

[CamSLC]

I like @GB-man's idea. I google image searched your town and it looks like a very idyllic location for relaxing.

Just make it yours and try and pay a little extra until you are out of the red. Only other option it sounds like would be to voluntarily fore close, which would probably be a longer harder road. Hope you find a solution that works.

[Abdullah71601]

Move into your rental unit. Put the $300 a month you are spending on rent towards principal and pay the place off.

Unless the land has any value, you'll never unload that property. A 1995 mobile can be bought for about $5K and no lender will ever finance a 20+ year old mobile for anywhere near what you owe.

Buying a mobile is a good idea if you are running a trailer park for income (and buy the units for <$5K each) or intend to live in it yourself. Otherwise, they only depreciate. It's not an investment, it's cheap housing.

[.brian.]

Originally Posted by Valenciawatchrepair

So, now I'm spending almost $300 per month RENTING now.

Do you mean $3000?

Or if you really mean $300, then why not move in to your mobile home?

Edit: Looks like multiple others have already suggested that.

[Valenciawatchrepair]

Originally Posted by .brian.

Do you mean $3000?

Or if you really mean $300, then why not move in to your mobile home?

Edit: Looks like multiple others have already suggested that.

Ahh sorry. I meant I'm spending $300 MORE over the $700 we were spending. $950 is my current rent.

Another point I didn't mention. The mobile home is in Florida 300+ miles away. So, moving into it, isn't an option.

I'm supposed to get $400 a month on the mobile home. Yet, time after time it has become a problem. Like I mentioned today is Feb 1st and I do not have half of January still.

[Abdullah71601]

Originally Posted by Valenciawatchrepair

Ahh sorry. I meant I'm spending $300 MORE over the $700 we were spending. $950 is my current rent.

Another point I didn't mention. The mobile home is in Florida 300+ miles away. So, moving into it, isn't an option.

I'm supposed to get $400 a month on the mobile home. Yet, time after time it has become a problem. Like I mentioned today is Feb 1st and I do not have half of January still.

Try to find a buyer who will live there and finance it yourself. They will own maintenance and other home owner costs and pay you monthly to pay it off.

If you are self employed, why can’t you relocate to this property?

[MonBK]

You have a mortgage/interest payment of $203 a month?

What is the problem?

[Valenciawatchrepair]

Originally Posted by MonBK

You have a mortgage/interest payment of $203 a month?

What is the problem?

$230. Yes. It's more the fact that, the tenants miss payments and become a giant headache. I'm now paying More rent than before myself PLUS paying this mortgage. Plus dealing with the headache. I'm using the profit of the mobile home to help pay my Rent now, because it was unexpected. I went from a smaller mortgage to a higher rent. Also, when I moved 5 years ago, my income dropped and I went self employed. Maybe I just need to suck it up? But, I'm just wondering if at this point with so little principal paid, is it worth keeping?

Also, side info: I bought the vacant 5 acres in 2005 for $25,000

Total loan for remainder of land loan, mobile home, and improvements was $44,000 in 2008. Today, this loan is still at $40,000. I doubt the entire property is worth $30,000. The area sucks. Zip code 32428

[Valenciawatchrepair]

Originally Posted by Abdullah71601

Try to find a buyer who will live there and finance it yourself. They will own maintenance and other home owner costs and pay you monthly to pay it off.

If you are self employed, why can’t you relocate to this property?

I'm currently owner financing now.($400/month) And I have in the past. But, the level of tenants there is terrible. Starts out good, and then always has been a problem. Is it worth messing with the headache? In the meantime, I end up paying my new higher rent plus this mortgage.

[Abdullah71601]

Originally Posted by Valenciawatchrepair

I'm currently owner financing now.($400/month) And I have in the past. But, the level of tenants there is terrible. Starts out good, and then always has been a problem. Is it worth messing with the headache? In the meantime, I end up paying my new higher rent plus this mortgage.

At that price point you aren’t getting ideal tenents. You are in the cheap seats, where paycheck to paycheck lifestyles choose gas and phone bill over rent.

At this point, paying off the debt is the priority so that you can move on. Try tightening the belt at home so that you can pay this down to where a bank will give somebody a loan to take it off your hands.

[Watchflair]

Originally Posted by Valenciawatchrepair

Ahh sorry. I meant I'm spending $300 MORE over the $700 we were spending. $950 is my current rent.

Another point I didn't mention. The mobile home is in Florida 300+ miles away. So, moving into it, isn't an option.

I'm supposed to get $400 a month on the mobile home. Yet, time after time it has become a problem. Like I mentioned today is Feb 1st and I do not have half of January still.

It's seller/owner financed - I would tell them you are done with the property and they are beat. I doubt they will go through the expense and legal hassle of taking you to court over it.

Mail them the keys and be done with it.

[Dr.Brian]

The 2 and $300/month rent is just amazing to me. I’ve never lived in an area like that. The last place I rented was pretty much the cheapest house in town and it was $3600/month. Though it was in fine condition and in Palo Alto, and that is was over 10 years ago.
If you’re only getting 200/month on the property and you can’t affrord to cover the loan yourself, it sounds like it wasn’t the best investment. Does the land itself have any value?
I like the out of the box thinking with the redneck weekend destination. You could potentially make more in a single weekend than with your current situation. Does it have privacy, a view of something, etc?
If all else fails, move in yourself, regroup, pay down the loan as fast as possible, and figure out how dump the place without losing all you put in.

[Casey VP-26]

I found selling my rental units very tough. Its like trying to sell a job that has no pay.

I would clean it up as good as possible and put it on the market For Sale with no one living in it.

Having said that, Good Luck my friend whatever you decide.

[Hpozzuoli]

Kick out the tenant you have in there right now. He isn’t paying you and will further depreciate your asset. Put some lipstick on the place and advertise it for rent with the caveat “rent to own”. I don’t think a mobile home in that town is in high demand. You need to stand out. Give someone the chance to own a home for short money and no bank loan requirement. Aside from that a fire or just surrender the loan like mentioned above.

[Abdullah71601]

Originally Posted by Hpozzuoli

Kick out the tenant you have in there right now. He isn’t paying you and will further depreciate your asset. Put some lipstick on the place and advertise it for rent with the caveat “rent to own”. I don’t think a mobile home in that town is in high demand. You need to stand out. Give someone the chance to own a home for short money and no bank loan requirement. Aside from that a fire or just surrender the loan like mentioned above.

A fire is arson, which is a felony. Hopefully, you were joking.

[CamSLC]

I have an old friend who had a home he was over extended in back in 2010 (1mm+). At the same time he took a large pay cut at work. To keep it, he was juggling 5-6 roommates at a time. He decided it was worth the freedom to short sale his residence and move into a basement at a friends. Fast forward 6 years later and he is married, has a great job with two little ones and a new beautiful home. He has mentioned it was a great choice for him to get out from under the pressure of his debts and credits that to his current professional success. It liberated him to move on with his life.

I normally wouldn't advocate for "defaulting" but you've explained your options are very slim and the property is over-financed at this point.

[christianj]

Originally Posted by CamSLC

I have an old friend who had a home he was over extended in back in 2010 (1mm+). At the same time he took a large pay cut at work. To keep it, he was juggling 5-6 roommates at a time. He decided it was worth the freedom to short sale his residence and move into a basement at a friends. Fast forward 6 years later and he is married, has a great job with two little ones and a new beautiful home. He has mentioned it was a great choice for him to get out from under the pressure of his debts and credits that to his current professional success. It liberated him to move on with his life.

At the risk of getting flamed, he shouldn't have over extended himself in the first place and bought a $1MM+house he couldn't afford without a backup plan. Lots of situations like this when the market crashed and they should have known better. I personally saw one in my neighborhood in MD...couple buys houses they likely couldn't afford and then things got tough. They thought they could afford the house due to the rates and deals they were getting but then they didn't calculate in the yard crews they hired weekly and all the other expenses. When things got tough they stopped the yard crews but were too darn lazy to get out and mow the grass themselves. A couple of months later the house went into foreclosure. Guess I was always raised to buy what I could afford and not end up sticking the bank/lender with my problem.

As for the OP, I think he is doing the right thing by trying to find a solution instead of just walking away. Sure that is the easy thing to do and probably the least expensive but is it the "right" thing to do.

[Duey]

Best Idea I See Is -

[datejustrms]

I would buy the deadbeat tenant out (so he doesn't trash the place) and move into the trailer. I would stay there until you can show 2 years of self employment income and hope you're credit scores improve. Then I would try to sell it and hopefully you'll be able to obtain financing for something else at that time. Good luck!

[Valenciawatchrepair]

Originally Posted by datejustrms

I would buy the deadbeat tenant out (so he doesn't trash the place) and move into the trailer. I would stay there until you can show 2 years of self employment income and hope you're credit scores improve. Then I would try to sell it and hopefully you'll be able to obtain financing for something else at that time. Good luck!

My wife would hate me if I moved her back down there and stuffed us and the 3 kids in that place. But, that idea looks REALLY GOOD on paper. lol

[datejustrms]

Originally Posted by Valenciawatchrepair

My wife would hate me if I moved her back down there and stuffed us and the 3 kids in that place. But, that idea looks REALLY GOOD on paper. lol

I've been in residential mortgage lending for a long time and this is what I would recommend.

[Valenciawatchrepair]

Originally Posted by datejustrms

I've been in residential mortgage lending for a long time and this is what I would recommend.

Wife just got back in. We're discussing it. Also all other options. Thanks for all the help everyone.

Also, considering what I've paid in in the past and adding to that the current balance of $40,000. Is it worth it to pay this off in the long run? Living in it would be cheaper per month. But, in the end, I would probably be spending something like $60K total on a property worth MAYBE $30,000-$40,000 if that. Waiting on a call back from a realtor in that area to get prices per acre that have recently sold or are on the market.

[Wesley Crusher]

Originally Posted by datejustrms

I would buy the deadbeat tenant out (so he doesn't trash the place) and move into the trailer. I would stay there until you can show 2 years of self employment income and hope you're credit scores improve. Then I would try to sell it and hopefully you'll be able to obtain financing for something else at that time. Good luck!

Agreed.

I am in mortgage (not in originations, but I work alongside originations) and getting a loan when you're self employed can be tough. With a bad credit score, it's a double whammy.

There are banks/lenders who will give a loan for manufactured housing (we don't), but there may be some strict guidelines. A 95 model may be too old.

[Carrera911]

Would you be able to share more information about the property (address, pictures) ?
I'd be happy to get them into my inbox if you are uncomfortable with advertising it here.

[Duey]

Zilllow recent sales -
4.54 acres - $7K
https://www.zillow.com/homes/for_sal...zm/0_mmm/1_rs/

27 acres - $70K
https://www.zillow.com/homes/for_sal...zm/0_mmm/1_rs/

Run Far Run Fast ...

[Valenciawatchrepair]

Originally Posted by Carrera911

Would you be able to share more information about the property (address, pictures) ?
I'd be happy to get them into my inbox if you are uncomfortable with advertising it here.

Originally Posted by Duey

Zilllow recent sales -
4.54 acres - $7K
https://www.zillow.com/homes/for_sal...zm/0_mmm/1_rs/

27 acres - $70K
https://www.zillow.com/homes/for_sal...zm/0_mmm/1_rs/

Run Far Run Fast ...

Those properties are way out. Not paved road. My property isn't as back woods as that. lol

https://www.realtor.com/realestatean...8_M50369-96526

Not sure if property appraiser will direct link
https://qpublic.schneidercorp.com/Ap...0-00-2548-0000

[CamSLC]

You aren't that under water on it. I was assuming it was only worth what you paid for the land. Could you lease it to other people who own their own trailers? Maybe 1 trailer per acre?