Are you in Debt from trying Real Estate Investing?

Wow, thats definitley NOT the right idea! I don't mean to be rude or anything, but why would you do a deal if it offered you NEGATIVE CASH FLOW? SULLY

Hi Jason, First let me welcome you to our family. The word negative would hardly be mentioned on this site. Our interest is to be successful, you included. Maybe you should get rid of the negative and make it all positive. However, let hope we could learn from our mistakes, because we all have made one or more in our life. As a DG member, this should be the end of your broke years. Time to look forward to begger and better things. Stop throwing your money away unnecessarily. We are here to encourage, inform, educate and support you on your new journey. All the best and God Bless.

Sandra

Like Sandra said, wlecome to the DG family. It's good to have you here.

Is there any way to revamp your current holdings?

Up the rent?
Sell a property?
Lease/option something to give you some positive cash flow and maybe get a property off your hands?
Refi?

Don't worry. You won't be in the negative for long. I'm glad you're ready to start fresh with Dean's strategies. You'll definitely end up on top!

Rina

Welcome... Well, that's not good. Rina has some good suggestions. You could also owner finance these properties. Bottome line is to turn them into cash flowing assets or get rid of them. You shouldn't be loosing money on them, you should be making money and if that's not the case, dump them anyway you can.

I really appreciate everyones feedback on this topic so far. I had a good feeling that I would get feedback quickly on this topic. I am happy that I have these properties, but I have made some mistakes with two of them that are in bad areas and need repairs and the four of them are excellent properties, but my cash flow is not great because I have insurance, property management, HOA fees. These all add up.

Keep in mind, it's not easy to refinance as you need GREAT CREDIT to do so. Lease/options are good too, but the properties that I have in mind for that need fixing and repairing which would cost $1200.00 or more.

I do like everyones response and obviously it's unfortunate to have a negative cash flow. With this economy, I really would like to have a $100k sitting in my bank account. I think learning from you guys and Deans coure it could happen

All is not lost yet. There are ways to make this a win/win for you. Don't give up, keep searching for the exit strategy that will work for you. Real estate is always supposed to be profitable. I made $48k on my first deal without even trying and $25k on my second, you should be making money and lots of it!

Good luck and God bless,

Thanks for the encouragement. How did you make 48K on your first deal? Was it an assignment of contract?

It was my primary residence. I bought it for $145k and sold it a year later for $215k for a difference (after fees) of $48,500! I didn't even do any improvements to it. The next deal was an assignment for $24,800 that was a suweet deal. So you should definitely turn those liabilities into assets! As always, I'm glad that I can encourage you.

Elena, that's great.When you do an assignment, doesn't the realtor ask you for proof of funds or do you provide the realtor with a pre-qual letter from the bank?

I didn't use a realtor on that deal. I did it myself and kept all the CA$HOLA I made!!

Hey, Jason,

If you are sitting on vacant houses that need only a (relatively) small amount of repairs to get them rented, that's what you can concentrate on. Borrow the $1,200 from a credit union or a relative and get a tenant in there paying rent and get it paid off quickly. If you own a home, a HELOC can work well for that. Just owning real estate doesn't guarantee success, the properties need to be tended, just like a garden. Figure out what could be done to each individual property to make it more efficient, and then do it. Careful use of a credit card can fund repairs if that will help get a renter in, but credit card debt can open its own can of worms if misused.

One thing that it is easy to do is to over-extend yourself. Don't neglect to set aside money for taxes and insurance if they aren't paid with the mortgage, unless you have enough cash flow or temporary borrowing ability to cover them. No matter that a property seems like a good deal, if it can't be turned for a profit or made to pay its way, it probably isn't a good deal for you.

Maybe you are competing with Section 8 and are not charging enough rent. Don't squeeze out the last dollar, as that causes vacancies, but don't give away too much, either.

I'll bet that if you examine how you can improve the performance of each parcel, you can turn them into profitable cash-flow producers, and then you'll be off and running.

Good luck.

cactusbob

Great words of wisdom. Everyone can learn from the post above. thanks.

Jason,

I want to compliment you on taking action. Most will never accomplish what you you have done. Go out there and fix some of the issues you have with your current properties and use that as a spring board to take you to the next level. Right now you are so close to victory you probably don't realize it. Trust me I have been there. Great job.

Thanks for the suggestions and encouragement on these properties. Real Estate investing is suppose to be profitable and unfortunately I made some mistakes. I joined the mentor program today, and I am taking action in making new deals and fixing those exisiting properties up so they can be rented out. I did use hard money to buy the house that needs fixing and was told that I would be provided with a section 8 tenant, but it did not happen and ended getting someone else in their as a tenant. Having a section 8 person as a tenant would have been ideal. It definately can still happen.

Jason, as CBR said, we all have been there and some still are. Look at me, just doing a good deed for family. But we cannot let these occurrences keep us back. We have to rise to the occasion and move on to bigger and better things. You are a fighter. Keep, keeping on.

Sandra

I have read that some can buy a lot of properties, and feel like they are rich in that aspect, but regarding cash flow are broke because of all the maintenance. Sometimes it is better to flip all you can, and not hold on to properties that are just going to make you miserable.

Even though you have made mistakes - you are still a winner because you actually took some action and went out there and got started! The mentor program is awesome, and I'm positive that with their help and all the great wisdom and support here on this site you will find yourself out of the hole and turned around in no time!

This site has been the best ever out my real estate investing for the last two years. I thank you all for your encouragment and my rental property is now almost complete with the repairs. When I was taking some pics at my rental property, I two neighbors came by and asked me questions about the house and then one of the neighbors told me that he knew someone that could fix the mold and clean out my gutters. I also had vandalism and just found out that my insurance would cover that and I opened a claim and received a call today that they would be sending me a $1500 check to cover the vandalism. So guess what, I am getting everything fixed for $600.00 and I am also able to put the extra funds in the bank to put toward another deal. I will call my property manager and let him know that the house is now rentable again and to find a section 8 tenant. So, I been pretty happy about things this week and thank all of you on this site.

A lot has been said in here and i appreciate everyone's feedback. One thing for sure whenever you purchase a property, you always have to do your calculation to make sure you always come out ahead. If you don't include the property taxes, home insurance, mortgage insurance and other fees into your equation, then you are mostly likely come out short. This might have been the case in your situation, but for future references, you need to make sure that all these factors are considered. Well, there more factors such as the area, the environment, school, etc, etc, to consider, but take the advise that have been posted and turn your negative situation into a positive one. Good luck and don't give up on your dreams!

Lloyd

good job progressing on the problems and getting them fixed. Do you have any equity in the two houses that are negative cash flowing? And once both of these are rented will you have positive cash flow as a whole from all 6 properites? If not you need to sell them.

good job having 6 props! ..but make sure they cash flow or get rid of them.

Yes, I am selling one of the properties in two weeks. I do have a positive cash flow on my four plex. The two fixer up properties that I just had the contractors complete will have a positive cash flow. For now, I do not want any more properties. I just want to flip contracts and make cash.

Jason