Foreclosure or...?
Question:
Answer:
uh... Bermuda?
Where is it? Maybe the land would be worth more w.out the house on it?
It depends on how much equity you got in the property and whether you are personally liable for any shortfall assuming it is foreclosed upon. Depending on the obviousness of the code violations, you might have a claim against your inspector who should have caught that stuff.
You say you had an inspector, how long ago was this inspection and was he/she bonded? There may be some recourse for an improper or incomplete inspection. The tenants not paying on time is your problem, there should be a clause in your rental agreement to adress this issue. The repairs will ultimately be at your expense and the city may red-tag your property and force you to make them as well as relocate those late-paying tenants. You should bring your property up to code ASAP and then deal with the inspection company.
Sell it as is
You have two choices.
(1) Walk away and let the bank/court/jurisdiction take over the property and do something else or demolish it as they seem fit. Many slumlords have done this only because the properties were paid in full. You don't sound like a slumlord so.
(2) Make an honest effort to improve the property and attract tenants who will pay the rent.
You were not present at the inspection - are you a corporation that purchased property without knowing anything?
Any chance of getting an equity loan to take care of the problems? Go to the bank/note holder...believe it or not they prefer not to foreclose as it costs them mostly unrecoverable money (maybe especially in your case), and see if they can work something out with you...it any case, get rid of the non paying tenants...if you really are having structual issues, that may be reason enough to get them to out...I have made deals with non-paying renters to waive the amount due if they agree to move out by a certain date...this doesn't get you your money, but it does get them out, without the expense and wait period of eviction.
Find your local association for owners of income property. Go to a few meetings and ask other owners how they would solve your problem in your market.
Separately, does the building or property include any materials or items that have significant value on the "used" market? One example is the slate on a slate roof.
I also agree with the response of "Brand X"
You might be better off leaving the property vacant. Board it up if you can't fix it right now. You don't want to have any personal injury claims (or worse) to deal with right now. Especially since you are aware of major problems. Your liability is enormous!
I agree with the other posters to call your current mortgage company and explain the situation. They really do not want to foreclose and appreciate it if you just communicate with them. They probably won't chip in any more cash, but might give you time on your payments to get the problem resolved (add the payments to the end of the loan, or divide some payments up and add them to future payments somewhere). Depends on the lender.
A great deal depends on how long ago you purchased it? The seller must've known about "major structural problems?" If the problems have occured during your ownership, you can't get any help from the sellers. Every inspection I've had done includes a clause about they aren't responsible for missed items, so I doubt the inspector will be to blame either unless it's grossly obvious.
If you have no equity to get a loan, or no way to pay for the repairs, you'll have to sell it "as is" for less than you owe. Your lender can work with you on a "short sale" meaning they forgive part of what you owe. again, depends on the lender.
More Related Questions & Answers...