Investor Responsibility Debate. Any Takers? - Posted by PBoone

Posted by Ron (MD) on April 11, 2001 at 08:06:48:

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Investor Responsibility Debate. Any Takers? - Posted by PBoone

Posted by PBoone on April 10, 2001 at 10:41:45:

To All,
I have often pondered the question of "Do most investors accept the responsibility of making the payments on property with no income after “getting the deed” and for how long?
This scenario has happened in our own business a number of times where property sat eating all profits made since taking title. I would like nothing more than walking away,or not making the payment, but that means ruining someone’s credit in the meantime.
What do you guys think or do in this situation. PLEASE NO “HOLD EM, FOLD EM”
Pat

No Debate… - Posted by David Alexander

Posted by David Alexander on April 10, 2001 at 12:33:08:

You have an ethical responsibility to uphold… So I guess it depends on your ethics and where you draw the line.

You are responsible for what you say you will do, period.

David Alexander

Re: Should I admit this? - Posted by Stacy (AZ)

Posted by Stacy (AZ) on April 10, 2001 at 11:21:54:

Good question, Pat. I firmly believe, as the others, that my word is my bond. I will make the payments. However, there is an exception that I hope I never run into.

Suppose the economy takes a nose-dive and affects my ability to keep the unit occupied. Or, suppose I get sued and my cash-flow gets eaten up defending myself. There are any number of ways to get into trouble. If it goes bad for me, and I’ve exhausted every angle including offering to give the property back to the seller, I would let the loan default if it meant my family would suffer. When the choice is between food on the table for my kids, or my reputation, there’s no question about the direction I’d take.

May none of us find ourselves in the position to make this decision.

Stacy

Re: Investor Responsibility Debate. Any Takers? - Posted by ken in sc

Posted by ken in sc on April 10, 2001 at 11:17:58:

What did you tell the seller? That is the question. I feel morally obligated to do what I said I would do. I might tell the seller that it is very tight, but I will make payments trying to sell - but if it doesn’t work I will quit making payment and let him know. This is in effect a month to month option agreement. He can either agree to that or not. But I EXPLAIN to him exactly what I am going to do.

If I am buying “subject to” because it is a great loan and also there is good equity, then I tell the seller that I will make his payments no matter what - and I do just that.

Re: Investor Responsibility Debate. Any Takers? - Posted by Todd (MO)

Posted by Todd (MO) on April 10, 2001 at 11:13:23:

Stand by your word. When you take over a property it should be treated as any other loan responsibility; you have agreed to make the payments - stick to it.

There are certain risks involved with real estate, negative cash flow on a property is one of them. That seller is counting on you to act like a professional investor and honor your commitments. Deciding to forego your obligation just because you are not legally responsible on the note is a cop out.

Your professional integrity and character are on the line.

Todd

Re: Investor Responsibility Debate. Any Takers? - Posted by JR

Posted by JR on April 10, 2001 at 11:06:20:

I think that your word is your bond. If you did one deal that you walked away from with out living up to your agreement, it will be your last. Now this is not to say that if you are taking it subject to foreclosure proceedings, then it would be a different story. It would depend on the deal.

Re: Investor Responsibility Debate. Any Takers? - Posted by JPiper

Posted by JPiper on April 10, 2001 at 11:03:01:

I think there’s an ethical responsibility to make these payments.

However, while you may not be legally responsible for the loan with the lender, I think you are respnonsible for making payments with the seller. If you don’t, the seller could sue.

JPiper

Re: Investor Responsibility Debate. Any Takers? - Posted by Hope (Fl)

Posted by Hope (Fl) on April 10, 2001 at 10:58:50:

I would pay on the mortgage even if I were losing money by doing so (I have been in this position too) Usually it all works out in the end and I unltimately make my profit when I sell the house. I feel I am putting my reputation and character on the line when I buy a home, and I would not feel good about myself at all if I just walked away. Money is important, but not as valuable as your integrity.

Absolutely Correct… - Posted by JHyre in Ohio

Posted by JHyre in Ohio on April 11, 2001 at 07:33:48:

You say you gonna do it, you gotta do it.