Update, he might have a plan. Here is what he wrote:
I just got done masterminding with some of the best investors/short sale experts in my office. This is what the group recommended I do.
Short Sale (Property C), wipes out the first $234,000 and drag out the second if lucky can settle the $63,000 for $10,000ish. That property is done no more $700-$800 per mo. loss.
Keep (Property D) current (saving Mom’s credit) and use the $100,000 HELOC money to invest down here in $30,000 condos that would cash flow $500-$600 per mo. ea (after HOA dues). Buy one, let property management company do all the work for $60 per mo. Once first unit rented repeat process for an additional 2 units for a total of three new properties, each cash flowing $500-$600 for a total positive of $1,500-$1,800.
Once that is done, Mom permitting, renegotiate the first and second mortgages on (Property C) to bring it from breaking even to a small monthly cash flow. Might have to miss a couple payments to get the credit unions attention.
In regards to the judgment…write the crazy lady a check for $2250 and stop thinking about it. Get property management to look over property….breaks even.
The house in (Property A) $164,000 breaking even, renegotiate loan to fixed 3-4% for cash flow of couple hundred a month.
Total outcome:
Sell 1 house that is loosing $700-$800 per mo. Keep all others and take from breaking even to $100-$200 positive cash flow per mo. 3 new properties cash flowing $1,500+ per mo.
My situation goes from a monthly loss of $700-$800 to positive roughly $2,000 per mo. while gaining total number of rental units. Save all cash flow and buy 1 new property every year (cash). Once market rebounds sell off property and look for apartment building.
