Can someone help me with bad real estate investment?

I bought a property that is now worth much much less than what I paid. To pay off the mortgage will break me. I have other properties, but not making money. How do I proceed without a bankruptcy action? I don't want to lose everything I have worked for. I am a single older lady and only have myself to depend on. Did not use the best judgment here. I paid 80K for it and now it is appraised at 21K. I had owner financed it and the people trashed the place and of course, gave it back. Thanks for any input.

There should be a clause in the sale agreement that states the responsibility of the new owners to pay the amount in full, they shouldn't be able to just "give it back". Some contracts will even dictate what changes the new owners are allowed and not allowed to make to the property until the property is paid in full (which they would have violated and could be sued for). Otherwise, if no such contract exists, you're just out of luck. That's one reason why I quit the house rental business, people just trashing up the place and vanishing.

Check the appraisal and get a second opinion if necessary. If it still doesn't appraise for what you need, contact several contractors to give you bids on what it will take to get the house back to the value you need it to appraise for. Sometimes just a few thousand in fix-up will bring up a value tens of thousands of dollars.

Best wishes.

Something fishy is here, who ever appraised it for 80k lied to you then, a house should not deappreciate by 60,000 dollars.

Um go get your house appraised, right now

The answer really depends on your whole investement and financial picture. I would suggest culling the properties that do not make money. If you truly can not afford to hold on to some of the properties you can do the following.

1. stop paying the mortgage and taxes on the properties that do throw off any (or an unacceptable amount of) net profit before depreciation and you do not want to own any more.

2. continue to collect rents and manage these properties until the bank takes them from you. This will take any where from 8 months to 2 years.

3. Keep the monies collected in rents from these properties and pay down on other properties to make them more profitable, fix them and flip them, etc...

4. Hide all of your assets - move them into your childrens names...

5. Hire a good attorney to direct you in preserving your assets in a bankruptcy.

You may question the ethics of such a move but let me assure you that Donald Trump would do it - and fast. I have seen it done before.

The alternative is to have a discussion with the bank about your problem and see if they will negotiate a short sale (allow you to sell the property for less than you owe). This is unlikely due to the large disparity between what you owe and the current appraised value. The may be willing to lower your interest rates or extend your amortization periods to allow you to lower your payment.

I hope this helps.

Skip the fraud that the other landlord suggests. Ethics like that is what gives us all a bad name.

Aside from the fact that many of your statements sound off, you mention bankruptcy over ONE investment and for a very small amount of money.

You are right, you are having some judgment problems. You may want to talk to your children about someone taking over as your power of attorney and protecting your assets.

This is a strange situation. In some areas of the country houses have lowered in value, but not by 75% The people wouldn't have had to trash the place - they would have had to blow it up!

Either the original price was very bad, or the most recent appraisal is very bad.

There might be many solutions to your problem, including bringing in an investor as a partner, working out a new agreement with the lender and other possibilities, but I'd need to know many more details before I know what I would suggest.

For instance, you said that you bought it for 80k, how long ago and how much is the present mortgage? Is the house structurally sound, and needs paint cleaning and a lot of repairs, or is it structurally unsound, with sagging roof and a bad foundation? You say it is appraised at $27k, what would the value be if it is remodeled and repaired?