Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Investment property mortgage question

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Investment property mortgage question

    Hi,
    I am loaded in credit card debt- over 65k and am thinking of filing chapter 7 due to major decline in income
    I have a primary residence and an investment property- both are not upside down but have little if any equity. I wish to keep both properties if possible and I have always been current on all payments.

    My question is on the rental I have a 1 year lease and the rent payment exactly covers my mortgage. If I file chapter 7, can I keep this house and continue to use the rent payments to cover the mortgage? I've been told by someone if I file that they will notify the tenants and they will pay the court directly and the payments will go toward paying the debtors (I can't direct it to paying the mortgage). Of course this will lead to the mortgage not being paid and most likely resulting in a foreclosure.

    Any ideas or advice? A chapter 13 is another idea but not sure if I'll have enough income to work out a plan...

  • #2
    Originally posted by NWRider View Post
    Hi,

    My question is on the rental I have a 1 year lease and the rent payment exactly covers my mortgage.
    Then you're losing money.......

    Get out of the property.
    All information contained in this post is for informational and amusement purposes only.
    Bankruptcy is a process, not an event.......

    Comment


    • #3
      well I plan on moving back there eventually- I put a lot of money and time (8 years) remodeling it and the value will come back. If it is breaking even, I don't see it as losing money. I would like to keep it but am hoping I will still be able to collect those rent payments toward paying the mortgage

      Comment


      • #4
        Originally posted by NWRider View Post
        If it is breaking even, I don't see it as losing money.
        Taxes
        Insurance
        Maintenance
        Repairs
        Damages
        Upgrade Reserves
        Tenant Turnover

        If you don't have at least a 30% cushion between the rent and the mortgage payment, you're losing money. AT LEAST 30%, should be more.

        Been there, done that, got the t-shirt.......
        All information contained in this post is for informational and amusement purposes only.
        Bankruptcy is a process, not an event.......

        Comment


        • #5
          I agree with Frogger, if you are at break even, you are losing money. You need to approach this from a business perspective, too many people got into this whole rental property deal and never really took the time to understand where the numbers need to be to make it work.

          To get yourself to a 10% return on investment, your rent must exceed the hard costs (mortgage, taxes, HOA, and insurance) by about 35%. That allows you to develop a cash reserve for maintenance, repairs, damages, turnover and upgrades. Or another way to look it, in a 12 month time frame, you should be able to put away at least 3 months worth of rent. Thus, if you are renting a property for $1,000 per month, then you should have net profit (net after monthly costs) of $250 per month. Otherwise, you are losing money and don't even know it.

          If the house is negative equity, then DUMP IT. The real estate market is not going up any time soon, with 10.2% unemployment and over 1.4MM homeowners with a mortgage that are unemployed, we have years of foreclosures still on the horizon and no one to buy houses). Get out now. Between your credit card debt and this rental, you are simply bleeding money, you can either do the smart thing, and get out now, or blow another $19,000 over the next year (that is what your minimum payments would equal over the next 12 months) and then you will probably be back here again wondering why you didn't get out at this point in time.

          Comment


          • #6
            I'm with HHM and frogger too. I got into the Rental Business. However, on my multi-unit building (a multi-use one at that), I had to get an actual commercial loan. This is where I learned what debt-service was all about. If you're debt ration is not at least 1.20:1 (meaning you're making 20% over the cost of maintaining and paying down encumbrances), then you shouldn't be in that business. I did get rid of the apartment building way before I filed.

            But I did keep my single family rental unit. This one killed me. I was probably at a debt service ratio of 0.8:1 and that was just the death of me. If you're not making enough to cover all repairs, mortgage, taxes, and insurance... you're losing money. To top it off, too many people forget this other phenomenon in the rental market, empty units. Even if it's empty 2 months out of every 24 months, that affects the debt-service ratio.

            I'm now out of the rental business. It never "made" me money. It was all speculative that it would pay for itself in 25-30 years, and I could retire with $8M in property at that time. (I did also co-owned a 100-room hotel that we were converting to apartments, but I gave up on that dream too.)
            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
            Status: (Auto) Discharged and Closed! 5/10
            Visit My BKForum Blog: justbroke's Blog


            I am not an attorney. Any advice provided is not legal advice.

            Comment


            • #7
              Investment property mortgage question

              There are now thousands of new landlords who have taken the step of getting a mortgage on an investment property. Here my m question is "what exactly does that mean and what do people need to know to get a mortgage on an investment property?

              Any real estate agents out there who can explain me for a better understanding of the subject. Thanks

              Comment


              • #8
                NWrider - at least in CA and in our case, if the properties are not of value to the Trustee you can ride those through and keep the rent. We have a couple of properties that are underwater but have a postitive monthly cash flow which is one of the reasons why we kept them. I was told that if you are giving up the property, not making payments and collecting rent, then that rent has to be turned over to the Trustee. You declare your intentions with the loan when you file.

                one thing to consider - if you are filing consumer BK 7 and you are concerned about your DMI you could include the house costs to bring down a positive monthly income. If after the process is completed (closed case) and the property has some unexpected costs you did not anticipate and that you cannot afford then you could let it go into forclosure without penalty. talk to your attorney and he should be able to give you sound direction.

                Comment


                • #9
                  Justbroke, I think we had the same idea about retiring in 20-30 years with some money to draw from but we never achieved the level you did in real-estate. unfortunantly Goldman, AIG, and a few banks had their own plan...

                  Comment

                  Unconfigured Ad Widget

                  Collapse
                  Working...
                  X