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  • August 23, 2009 at 1:21 AM #16223
    trying2balance
    Participant

    Well, my husband and I did most things right. We worked very hard and built good careers. Lived below our means, paid off all debt, saved every month and had two beautiful babies. Bought a small home in 2001, and then comes the part where we screwed up… bought a rental property in 2005 in Tempe AZ.

    So I’m hoping the wisdom of this community can help us figure out the next step bc husband and I are not on the same page here.

    The rental market has crashed in Tempe and while the condo was renting for $1000 we now cannot find a tenant for $600. We do not know which of the following options to pursue:

    1. Try to sell the condo for $80,000 (we paid $140,000 and still owe $120,000) and save our credit for the $40,000 cash we would lose from our savings account

    2. Ride out the $1,000 it costs us to carry the condo per month, rent for whatever we can and just keep losing $ every month hoping something turns around

    3. Take $120,000 from the $175,000 we have in savings (money we have been saving to buy a home in San Diego) and pay off the condo to turn a loss into a $400/mo cashflow hoping rents increase and we can find a better propert mgmt firm – but then we have to keep renting for who knows how long

    4. Use our $175,000 cash to buy a house in San Diego while we still have 800+ credit scores and walk away from the Tempe condo (not sure if we have recourse loan – do remember the broker made it a “secondary home” loan to get us a competitive rate)

    After reading this site and OCRenter’s we sold our first home in late 2008 and made $80,000 and are now renting a home that I absolutely LOVE in Ramona for $2500/month. We are not sure we want to buy in Ramona bc too far and not great schools and would ideally buy a $400-500,000 in Rancho Bernardo or Poway.

    Husband makes $125,000 and I make $90,000 working part time from home — my “real job” raising our toddlers and we plann to have me stop working to have 1 or more children. So our budget is for a family of 5 on a $125,000/yr income with no debt other than this rental condo.

    My husband thinks losing another $40,000 is worth saving our credit. I just read SD Realtor’s post and think we will need every penny we have for a downpayment as the market is going up again. And as a mother I get very nervous about giving up our emergency money in case husband loses job (he is not in the most secure field…)

    So help… we were just in Tempe to try to get the place rented and not a single call or showing. What the heck do we do with this place on our hands??? We screwed up when we bought it but are we going to screw up again by giving up our cash to a moneypit that we want nothing to do with? By ruining our credit? By selling at the absolute bottom when even real estate can only go up from here?

    Thanks so much for you advice and do know that ultimately we consider ourselves incredibly fortunate in life bc we value our health, family and spirit above all else and we know we will just work hard and try to build up again.

    August 23, 2009 at 1:46 AM #447807
    Effective Demand
    Participant

    Check AZ foreclosure laws but if the loan is non-recourse (a simple quicky google search says AZ purchase money are non-recourse regardless of investor or OO.. check yourself) and no second liens and all that…

    I’d try a short sale while paying as agreed. Offer the servicers that option saying it is that or foreclosure and neither party wins with foreclosure. Some servicers will take that offer and so if you get a buyer and you paid as agreed up to the end then your credit isn’t hit very hard. What really drops the FICO scores in the rolling late payments on foreclosures. Your credit hit will be a one off hit saying the account was paid off for less than full amount (I’ve heard that is only a 50-60 point fico hit but that would be something you need to investigate).

    I think this option gives you the maximum FICO at the end and the maximum amount in the bank. I really wouldn’t risk too much more money on the condo than that but your desire to maintain a high FICO is up to you.

    On your list of options I definitely wouldnt do #2 (I doubt anything will change in 40 months and so your back in the same spot) or #3 (putting most of your money into a depreciating asset) if we call my option #5.. then I think #5, #4, #1 are the order in which I would look at things. But #4 and #1 may switch due to desirable housing availability (not able to buy right now) or some other reason to maintain a high fico score.

    Best of luck.

    August 23, 2009 at 1:46 AM #447999
    Effective Demand
    Participant

    Check AZ foreclosure laws but if the loan is non-recourse (a simple quicky google search says AZ purchase money are non-recourse regardless of investor or OO.. check yourself) and no second liens and all that…

    I’d try a short sale while paying as agreed. Offer the servicers that option saying it is that or foreclosure and neither party wins with foreclosure. Some servicers will take that offer and so if you get a buyer and you paid as agreed up to the end then your credit isn’t hit very hard. What really drops the FICO scores in the rolling late payments on foreclosures. Your credit hit will be a one off hit saying the account was paid off for less than full amount (I’ve heard that is only a 50-60 point fico hit but that would be something you need to investigate).

    I think this option gives you the maximum FICO at the end and the maximum amount in the bank. I really wouldn’t risk too much more money on the condo than that but your desire to maintain a high FICO is up to you.

    On your list of options I definitely wouldnt do #2 (I doubt anything will change in 40 months and so your back in the same spot) or #3 (putting most of your money into a depreciating asset) if we call my option #5.. then I think #5, #4, #1 are the order in which I would look at things. But #4 and #1 may switch due to desirable housing availability (not able to buy right now) or some other reason to maintain a high fico score.

    Best of luck.

    August 23, 2009 at 1:46 AM #448336
    Effective Demand
    Participant

    Check AZ foreclosure laws but if the loan is non-recourse (a simple quicky google search says AZ purchase money are non-recourse regardless of investor or OO.. check yourself) and no second liens and all that…

    I’d try a short sale while paying as agreed. Offer the servicers that option saying it is that or foreclosure and neither party wins with foreclosure. Some servicers will take that offer and so if you get a buyer and you paid as agreed up to the end then your credit isn’t hit very hard. What really drops the FICO scores in the rolling late payments on foreclosures. Your credit hit will be a one off hit saying the account was paid off for less than full amount (I’ve heard that is only a 50-60 point fico hit but that would be something you need to investigate).

    I think this option gives you the maximum FICO at the end and the maximum amount in the bank. I really wouldn’t risk too much more money on the condo than that but your desire to maintain a high FICO is up to you.

    On your list of options I definitely wouldnt do #2 (I doubt anything will change in 40 months and so your back in the same spot) or #3 (putting most of your money into a depreciating asset) if we call my option #5.. then I think #5, #4, #1 are the order in which I would look at things. But #4 and #1 may switch due to desirable housing availability (not able to buy right now) or some other reason to maintain a high fico score.

    Best of luck.

    August 23, 2009 at 1:46 AM #448406
    Effective Demand
    Participant

    Check AZ foreclosure laws but if the loan is non-recourse (a simple quicky google search says AZ purchase money are non-recourse regardless of investor or OO.. check yourself) and no second liens and all that…

    I’d try a short sale while paying as agreed. Offer the servicers that option saying it is that or foreclosure and neither party wins with foreclosure. Some servicers will take that offer and so if you get a buyer and you paid as agreed up to the end then your credit isn’t hit very hard. What really drops the FICO scores in the rolling late payments on foreclosures. Your credit hit will be a one off hit saying the account was paid off for less than full amount (I’ve heard that is only a 50-60 point fico hit but that would be something you need to investigate).

    I think this option gives you the maximum FICO at the end and the maximum amount in the bank. I really wouldn’t risk too much more money on the condo than that but your desire to maintain a high FICO is up to you.

    On your list of options I definitely wouldnt do #2 (I doubt anything will change in 40 months and so your back in the same spot) or #3 (putting most of your money into a depreciating asset) if we call my option #5.. then I think #5, #4, #1 are the order in which I would look at things. But #4 and #1 may switch due to desirable housing availability (not able to buy right now) or some other reason to maintain a high fico score.

    Best of luck.

    August 23, 2009 at 1:46 AM #448591
    Effective Demand
    Participant

    Check AZ foreclosure laws but if the loan is non-recourse (a simple quicky google search says AZ purchase money are non-recourse regardless of investor or OO.. check yourself) and no second liens and all that…

    I’d try a short sale while paying as agreed. Offer the servicers that option saying it is that or foreclosure and neither party wins with foreclosure. Some servicers will take that offer and so if you get a buyer and you paid as agreed up to the end then your credit isn’t hit very hard. What really drops the FICO scores in the rolling late payments on foreclosures. Your credit hit will be a one off hit saying the account was paid off for less than full amount (I’ve heard that is only a 50-60 point fico hit but that would be something you need to investigate).

    I think this option gives you the maximum FICO at the end and the maximum amount in the bank. I really wouldn’t risk too much more money on the condo than that but your desire to maintain a high FICO is up to you.

    On your list of options I definitely wouldnt do #2 (I doubt anything will change in 40 months and so your back in the same spot) or #3 (putting most of your money into a depreciating asset) if we call my option #5.. then I think #5, #4, #1 are the order in which I would look at things. But #4 and #1 may switch due to desirable housing availability (not able to buy right now) or some other reason to maintain a high fico score.

    Best of luck.

    August 23, 2009 at 1:54 AM #447812
    temeculaguy
    Participant

    Wow, big decisions, be careful actually using any advice you get in the coming days, it will vary from spam and ammo to buy another condo, especially ignore my advice.

    Don’t throw 40k at saving your credit, that’s my least favorite, either buy now then let tempe go or pay it off, have it be gravy money for the rest of your life and go fha on your 500k house, and keep the part time job for 90k, stay with two kids that’s enough, once you go to three it complicates vehicle purchases because most convertables only have two seatbelts in the back, hey you asked! Oh and the free meal with each paying adult deals, another reason to stand pat at two, did you not get a girl? If that’s the reason you might end up with a basketball team before you get to have the experience of both. You’ve got a lot on your plate, give the reproduction urge a rest for a bit.

    What about a loan mod, I have a buddy that got one on his rental, he only bought himself a few years but the mod made him rent neutral till about 2012.

    Or there is another option, come up to my hood, to the land of the dirt people, endure the heat, make babies until your uterus falls out, pay 300 for a 5 br, have a mort of 125k tops, live on one income and live well, buy a nissan leaf next year with 368 mpg and you are all set. Why do you think we have like 9 mormom churches here, this place was made for you. I’m kiddng and i apologize, I’ll put myself to bed now, but seriously, the first few paragraphs were somewhat sound advice and there’s nothing wrong with Ramona, decent folk.

    August 23, 2009 at 1:54 AM #448004
    temeculaguy
    Participant

    Wow, big decisions, be careful actually using any advice you get in the coming days, it will vary from spam and ammo to buy another condo, especially ignore my advice.

    Don’t throw 40k at saving your credit, that’s my least favorite, either buy now then let tempe go or pay it off, have it be gravy money for the rest of your life and go fha on your 500k house, and keep the part time job for 90k, stay with two kids that’s enough, once you go to three it complicates vehicle purchases because most convertables only have two seatbelts in the back, hey you asked! Oh and the free meal with each paying adult deals, another reason to stand pat at two, did you not get a girl? If that’s the reason you might end up with a basketball team before you get to have the experience of both. You’ve got a lot on your plate, give the reproduction urge a rest for a bit.

    What about a loan mod, I have a buddy that got one on his rental, he only bought himself a few years but the mod made him rent neutral till about 2012.

    Or there is another option, come up to my hood, to the land of the dirt people, endure the heat, make babies until your uterus falls out, pay 300 for a 5 br, have a mort of 125k tops, live on one income and live well, buy a nissan leaf next year with 368 mpg and you are all set. Why do you think we have like 9 mormom churches here, this place was made for you. I’m kiddng and i apologize, I’ll put myself to bed now, but seriously, the first few paragraphs were somewhat sound advice and there’s nothing wrong with Ramona, decent folk.

    August 23, 2009 at 1:54 AM #448341
    temeculaguy
    Participant

    Wow, big decisions, be careful actually using any advice you get in the coming days, it will vary from spam and ammo to buy another condo, especially ignore my advice.

    Don’t throw 40k at saving your credit, that’s my least favorite, either buy now then let tempe go or pay it off, have it be gravy money for the rest of your life and go fha on your 500k house, and keep the part time job for 90k, stay with two kids that’s enough, once you go to three it complicates vehicle purchases because most convertables only have two seatbelts in the back, hey you asked! Oh and the free meal with each paying adult deals, another reason to stand pat at two, did you not get a girl? If that’s the reason you might end up with a basketball team before you get to have the experience of both. You’ve got a lot on your plate, give the reproduction urge a rest for a bit.

    What about a loan mod, I have a buddy that got one on his rental, he only bought himself a few years but the mod made him rent neutral till about 2012.

    Or there is another option, come up to my hood, to the land of the dirt people, endure the heat, make babies until your uterus falls out, pay 300 for a 5 br, have a mort of 125k tops, live on one income and live well, buy a nissan leaf next year with 368 mpg and you are all set. Why do you think we have like 9 mormom churches here, this place was made for you. I’m kiddng and i apologize, I’ll put myself to bed now, but seriously, the first few paragraphs were somewhat sound advice and there’s nothing wrong with Ramona, decent folk.

    August 23, 2009 at 1:54 AM #448411
    temeculaguy
    Participant

    Wow, big decisions, be careful actually using any advice you get in the coming days, it will vary from spam and ammo to buy another condo, especially ignore my advice.

    Don’t throw 40k at saving your credit, that’s my least favorite, either buy now then let tempe go or pay it off, have it be gravy money for the rest of your life and go fha on your 500k house, and keep the part time job for 90k, stay with two kids that’s enough, once you go to three it complicates vehicle purchases because most convertables only have two seatbelts in the back, hey you asked! Oh and the free meal with each paying adult deals, another reason to stand pat at two, did you not get a girl? If that’s the reason you might end up with a basketball team before you get to have the experience of both. You’ve got a lot on your plate, give the reproduction urge a rest for a bit.

    What about a loan mod, I have a buddy that got one on his rental, he only bought himself a few years but the mod made him rent neutral till about 2012.

    Or there is another option, come up to my hood, to the land of the dirt people, endure the heat, make babies until your uterus falls out, pay 300 for a 5 br, have a mort of 125k tops, live on one income and live well, buy a nissan leaf next year with 368 mpg and you are all set. Why do you think we have like 9 mormom churches here, this place was made for you. I’m kiddng and i apologize, I’ll put myself to bed now, but seriously, the first few paragraphs were somewhat sound advice and there’s nothing wrong with Ramona, decent folk.

    August 23, 2009 at 1:54 AM #448596
    temeculaguy
    Participant

    Wow, big decisions, be careful actually using any advice you get in the coming days, it will vary from spam and ammo to buy another condo, especially ignore my advice.

    Don’t throw 40k at saving your credit, that’s my least favorite, either buy now then let tempe go or pay it off, have it be gravy money for the rest of your life and go fha on your 500k house, and keep the part time job for 90k, stay with two kids that’s enough, once you go to three it complicates vehicle purchases because most convertables only have two seatbelts in the back, hey you asked! Oh and the free meal with each paying adult deals, another reason to stand pat at two, did you not get a girl? If that’s the reason you might end up with a basketball team before you get to have the experience of both. You’ve got a lot on your plate, give the reproduction urge a rest for a bit.

    What about a loan mod, I have a buddy that got one on his rental, he only bought himself a few years but the mod made him rent neutral till about 2012.

    Or there is another option, come up to my hood, to the land of the dirt people, endure the heat, make babies until your uterus falls out, pay 300 for a 5 br, have a mort of 125k tops, live on one income and live well, buy a nissan leaf next year with 368 mpg and you are all set. Why do you think we have like 9 mormom churches here, this place was made for you. I’m kiddng and i apologize, I’ll put myself to bed now, but seriously, the first few paragraphs were somewhat sound advice and there’s nothing wrong with Ramona, decent folk.

    August 23, 2009 at 7:48 AM #447821
    svelte
    Participant

    …the nugget in TG’s advice that you may overlook within his exquisite light-hearted banter is that you should consider buying your long-term dream home NOW and then letting the AZ home go (since it will take awhile for your credit to recover)…

    Decisions like these are hard to make and you won’t know if you made a decent one at this juncture for another few years, but it’s just money. You know the old saying, as long as you have your health…

    August 23, 2009 at 7:48 AM #448014
    svelte
    Participant

    …the nugget in TG’s advice that you may overlook within his exquisite light-hearted banter is that you should consider buying your long-term dream home NOW and then letting the AZ home go (since it will take awhile for your credit to recover)…

    Decisions like these are hard to make and you won’t know if you made a decent one at this juncture for another few years, but it’s just money. You know the old saying, as long as you have your health…

    August 23, 2009 at 7:48 AM #448351
    svelte
    Participant

    …the nugget in TG’s advice that you may overlook within his exquisite light-hearted banter is that you should consider buying your long-term dream home NOW and then letting the AZ home go (since it will take awhile for your credit to recover)…

    Decisions like these are hard to make and you won’t know if you made a decent one at this juncture for another few years, but it’s just money. You know the old saying, as long as you have your health…

    August 23, 2009 at 7:48 AM #448421
    svelte
    Participant

    …the nugget in TG’s advice that you may overlook within his exquisite light-hearted banter is that you should consider buying your long-term dream home NOW and then letting the AZ home go (since it will take awhile for your credit to recover)…

    Decisions like these are hard to make and you won’t know if you made a decent one at this juncture for another few years, but it’s just money. You know the old saying, as long as you have your health…

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