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ridgetopproperties · Joined: 06 Jan 2009 Posts: 1 1.47 Dollars($)

I don't know what to do in my situation. My head is spinning and I'm getting different answers from my accountant, from my attorney, my realtor; so I'm so confused on what is best for me. I have 6 investment properties that I am 3 months behind. I have 1 single-family home investement that I am not behind because we are hoping to possibly move there this summer or fall and I also have my primary residence that I am also current on. I've talked to the banks about doing short sales and on 1 of my properties they have lowered the price $65,000 below what I owe on it. I thought about doing bankruptcy just to get rid of them but will they allow me to keep 2 homes that I am current on if I plan on selling one and moving into the other? The deed of lieu from what I've been reading doesn't sound so good either. It sounds like the short sale is the best way to go but if I can't sell them, what's better a deed of lieu or bankruptcy?

smithsussane · Posted: Tue Jan 06, 2009 10:05 pm Post subject:

Hi ridgetopproperties!

Welcome to forums!

You can contact your lender and check out the option of short sale. If the lender agrees for a short sale of the investment properties, then he will sell off the properties and recover the debts. The deficient amount resulting from the sale of the property should be paid by you. If you cannot pay the deficient amount, then the lender may place a lien on your primary residence. However, a short sale will lower your credit by 75-100 points.

If you file a Chapter 13 bankruptcy, then you may be able to save all your properties. The lender will give you a new repayment plan. You will have to pay the debts according to the plan which will help you to pay off the debts within 3-5 years. But if you have to chose between bankruptcy and deed in lieu, then in my opinion, a deed in lieu will be a better option for you.

Feel free to ask if you have further queries.

Sussane

Guest

I have contacted them all and it sounds like they are willing to do the short sale but if they don't sell within 3 months then they have to do the deed of lieu; which you are saying is better than a bankruptcy? Because if I do a banruptcy it would have to be Chapter 7, not 13. These properties are not making me money anymore, they are hurting me this year more than ever, so they gotta go. The bank also said they would do a 1099 with the short sale but not sure with the deed of lieu, hopefully just a 1099 also. So I guess I will move forward with these short sales and hopefully they sell. Its unbelievable how low these properties have dropped in price, they are on the market for less than what I paid and my rents are really high on them; really sucks. Oh well, gotta pick up the pieces and restart anew. Thanks for the advice.

adonis · Posted: Thu Jan 08, 2009 1:05 am Post subject:

Hi R.H.,

Yes, it will be better if your properties go for a short sale. Furthermore it will be good if the lender forgives the deficient amount. Moreover, your credit will also not get affected much in a short sale.

kingno1 · Joined: 25 Apr 2008 Posts: 61 21.19 Dollars($)

Keep in mind that since they are investment properties, you will get 1099 for the difference for which you need to pay taxes...If the difference amt is bigger on all thoise properties, BK is the way..

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Bankruptcy, short sale or deed of Lieu