Negotiate with the lenders!!

[BK newbie]

I am a newbie who was considering BK because my rental properties were losing money.
My attorney suggested to me that I give the properties back to the lenders.
This may keep me from having to file bankruptcy because the lenders may take the properties back instead of going through the foreclosure process.
The reason I wanted to file for BK was that when the properties got foreclosed upon, I didn't want the lenders to be able to come after me for the difference between what I owed on the properties and what they got for it at the auction.
I will have to suffer the blow to my credit score but it seems a small price to pay considering the hole I would have been in.
My point is that a good attorney will tell you these things

[aa06a47]

Having been in the rental business before, i understand where your coming from. When I did get ahead just a little, some d-c- he-d would move out and I would find a unit screwed up. I know people make money in rental properties, but not sure how.

[SinkingFast]

You might dodge a bullet on your Credit Report if you contact your Lender about Short Sale.

You have to apply and be approved for Short Sale, but it's better for your Credit than Foreclosure. Even if you wind up filing BK at a later date, you won't have the double whammy of Foreclosure and BK showing on your Credit Report.

In a Short Sale, you write the Lender a sob story Hardship Letter. The Lender will also require some docs. Last year's income taxes, latest paystubs, your expenses, possibly some other stuff. It's basically like applying for the mortgage in reverse. If you get approved, the Lender will tell you the rock bottom amount they will accept. Your buyer can pay that amount plus all closing costs, fees, delinquent taxes, etc. You cannot make a penny on the deal. There's even a specific HUD form that's used for Short Sale.

If you're successful, your Credit Report will show "Sold" with a notation of the deficient balance. Not the same as "Sold. Paid as Agreed." but much better than "Foreclosure" or "Deed in Lieu of Foreclosure".

The downsides,............ The deficient balance becomes tax liable income to you. Also, the same information you give to apply for the Short Sale can be used by the Lender to prove a case of obtaining Credit under Fraudulent pretenses. But, Short Sale is an option for you to consider.

[BK newbie]

Pre-construction is the way to go, in my opinion.
No such thing as dependable cash flow in the landlording business unless you have sought-after rentals and people NEVER move out.
Thanks for the tips everyone