What are my alternatives to Investment property?
I purchased a Condo in Florida (investment property) at the height of the real estate market. The purchase was made with a friend as a joint owner. As luck would have it, my partner lost her job a couple of years ago and cannot pay her half anymore and is proceeding into bankruptcy.
Obviously, I am liable for the loan and am searching for any alternatives, either short term or long term. The Condo mortgages along with my personal residence mortgage is 48% of my gross pay. At this rate, I’ll eat up my savings within six to nine months. I am current on all payments. The value of the property was financed at 90%, with a mortgage and HELOC. Both are interest only loans. The current value of the property is 72% of the loan amount.
This means the value of the property is currently about 65% of what we paid.
We have been renting the unit as a vacation rental, but only have been able to rent it about 25% of the year. It generates enough income to cover about 20% of the cash outlay. Long term rental prospects are slim.
Any thoughts on how to either keep the property and minimize damage or is foreclosure an option I need to consider down the road? Is a loan modification possible, even on investment property? My credit score is very good at 805, so I guess I would sacrifice that as well.
I’m not looking for an easy way out, I just want to understand all my options.
thanks
The condo is in Panama City and I am working as an engineer in Georgia about 350 miles away. So, a business in the unit is not really an option. I guess another investor is an option. 50% ownership at 25% of the cost. That may work.
The the intent was to rent about 200 days a year, however, the rental market in this area was saturated with new condos, thus only able to rent about 3-4 months a year at best. Additionally, the with the hurricanes several years back, the insurance and property taxes more than doubled, which was not anticipated.
this is puzzling; were you expecting to rent it out only 25% of each year or what was your intent?
YOU did not volunteer what your occupation is. OR where you work.
you should immediately–consider putting a biz in the unit–
some 1-5 home occupations.
you should immediately consider finding a new partner and
selling him/her 25-50% of the unit.
other options exist but i need more data from you.
July 2nd, 2010 at 11:50 amCheck with your mortgage company – they are the only ones that can do a modification. They go by your credit score and not income. There probably will be an application fee.
July 2nd, 2010 at 11:50 amWhat part of Florida is it in? I may be interested in buying it.
July 2nd, 2010 at 11:50 amThe best thing to do would be to find someone else to partner up with you…if you have a credit score of 805, do your best to keep that…sadly not a lot of people can boast a score like that. Try to find a way to keep up with the payments…real estate is still the best long term investment.
July 2nd, 2010 at 11:50 am