Posted by Nike on May 07, 2007 at 13:54:24:
Is your wife a member of the LLC’s, or just you and partner? Is your partner self-employed? You are self-employed–what do you do? Is your business a DBA, LLC, corp.? Regarding your home you owe 15k- it’s worth about 90k? Do you or your partner have third-party debt that may shortly to become a lien (IRS, pending lawsuit?) All loans are current? Do any of the homes of equity?
Does the LLC have a buyout agreement in place? Have you offered to buyout your partner (nominal amount). You need to answer all these questions and sort out what you want to do–in particular, sort out what you’ll do if your partner files bk. Good luck
rental property foreclosure or bankruptcy?? - Posted by J
Posted by J on May 05, 2007 at 12:18:00:
Whoa boy, do I have some questions.
This is my situation:
In Michigan. I have 7 rental properties with a business partner. My wife and I are on 5 of the loans, 3 with Chase, 2 with Citi. My partner is on the loan for 2 of the properties (these 2 are the least of my concerns). My partner just informed me that he may be filing bankruptcy. Unfortunately our management of the properties has not been that great, plus the market is plummeting in Michigan (by the way, i’m a realtor). I’ve tried to sell, but lenders won’t loan to the type of buyers who would want these houses (valued between 20-50,000). I’ve discussed options with a couple of attorneys, but still looking for help.
These loans were all placed approx. 5 years ago…first liens only on each property. At that time we were financed for 80% of appraised values. All of the properties have realistic values approximately 60-70% of the original loan values. Loan amounts total: $232,000…true values now $160,000 (not including cost to sell).
My wife and I have personal equity in our home of approx. $75,000. Even if I wiped this out, I can’t be sure that I could sell all of these properties. My partner has nothing.
I know in Michigan that lenders may bid less than what is owed at sheriff’s sale, and then have the option to enter a deficiency judgement for the difference. What are the chances they will do this?
Haven’t missed a payment yet on any property. Would it be better to talk to the bank before missing a payment? or take the chance on letting it go to foreclosure and them bidding what’s owed to them at sheriff’s sale (therefore not able to enter a deficiency judgement against me, allowing me to keep my personal home equity).
The reason I’m thinking bankruptcy or foreclosure is because I know that I cannot handle the payments without my partner’s help. Tenants have not been paying, not keeping up the properties, and it is costing me money. I already understand that both bankruptcy and foreclosure will kill my credit (I can live with that, just not with these rentals).
Any help would be appreciated!!!
Re: rental property foreclosure or bankruptcy?? - Posted by DJ-nyc
Posted by DJ-nyc on May 07, 2007 at 16:23:49:
My suggestion is to “roll up your sleeves” and use your equity (75k) to:
- buy out your partner (deed transfers)
- Evict non-paying tenants
- Change your strategy to Section 8 (screen them first)
- avoid bankruptcy or foreclosure by any means necessary.
Time to get tough on Crime!
(mcgruff the crime dog used to say that)
I been thru tough times as well and I had to get TOUGHER!
Good luck,
DJ-nyc
bankruptcy?? - Posted by Nike
Posted by Nike on May 05, 2007 at 18:54:29:
Who is on title? held personally or in a corp.? Are either of you self-employed? You have 75k equity in your home-- how much do you owe the bank? How much is the rent for each property? Are there leases or month-to-month? Why aren’t you either collecting rent or evicting? Where are the properties? How much is the Homestead exemption in Michigan?
Provide more information and we can help sort this out.
Re: bankruptcy?? - Posted by J
Posted by J on May 07, 2007 at 08:36:42:
Currently all rental properties in LLC’s (but both my wife and I signed personally for the loans). I am self-employed. We owe our bank approx. 15,000 on our personal home. Some of the properties are rented, some pay, some do not. I’ve evicted countless tenants. Properties are in and around Flint, MI. Homestead exemption is approx 40,000 for married couples.