OfflineI received a call from a novice investor last night and he gave me a nightmare of a story. It seems that he is deep doo-doo and he wants to see IF I can help him.
He bought this home from a Man who had just gone through a divorce about a year ago and he signed a 5-year option contract. At the time the house payments where current but the ex-wife, no children, was still living in the house and at first she agreed to be out within 15 days. Well 15 days went by and she still didn’t move, he constantly was going by and trying to be nice to her but offering to help as much as he could to get her out. He still needed to do some work on the house and was getting desperate. Any way make a long story short it took 45 days to finally get her out.
He had to make 1 payment and the ex-husband could not make any payments so he was looking at having to make another payment when an elderly couple came along and rented the house for just under what the mortgage payment was. Now being 1 payment behind and in a negative cash flow situation he’s in trouble. At first the couple was paying on time and he thought he would be able to get caught up but then the couple started to be late and later now the house is in foreclosure and there are lawyers telling the elderly couple that they do not need to be paying the investor because he too is in default.
He got someone to help him start a short sale and the original owner has cooperated with him to get this done, but as you probably know this takes time. Now the elderly couple will not answer there phone and will not open the door to him and have not paid anything in 3 months.
What can be done, is there any help for the guy?
Please give me any suggestions that I may be able help this novice.
"It's not what happens to you that determines how far you will go in life,
it is how you handle what happens to you.
Zig Zigler
Maybe your friend could start by contacting his local city/county office to find out what the laws are for evicting someone if he doesn't have the funds to contact his attorney. He should be honest with them about him being behind in payments. Is there a lease and any documentation to how non-payment of rent is handled? Is the couple living on a fixed income? Maybe he can help them get into a place they can afford if another investor wanted to get involved.
Others may have better suggestions and I'm interested in hearing what they might be.
Lea
SPR Property Solutions, LLC
Maybe this couple would qualify for Section 8 housing?
Lea
SPR Property Solutions, LLC
This is a complicated and sad case. There maybe some Seasoned Investors in the area whom he might tell his story and could help him if he can't afford an attorney.. Shortsale might be the best option or someone who can take over payments and let the old couple sign the legal documents. There are lots of DG family members here who might have more sugestions. Lets just wait, I'm also interested in hearing them. LA
Everytime you repeat the words "I CAN DO IT" with conviction, you cancel or override your fear and increase your confidence. By repeating this affirmation over and over, you can eventually build your courage and confidence to the point where you are unafraid. -Brian Tracy-
Had a friend in a similar situation. He saw that the front door needed repairs so removed it and sent it off for repairs. The tenants left several days later (due to no door), at which point he re-installed the door...repaired of course. Now I don't think just anybody can get away with this, but it may be something worth looking into.
Please do not consider this without first seeking legal counsel!
..."Oh that you would bless me and enlarge my border, and that your hand might be with me, and that you would keep me from hurt and harm"
1 Chronicles 4.10
<@}}}><
My Success Journal:
http://www.deangraziosi.com/real-estate-forums/investing-journals/35813/...
"At first the couple was paying on time and he thought he would be able to get caught up but then the couple started to be late and later now the house is in foreclosure and there are lawyers telling the elderly couple that they do not need to be paying the investor because he too is in default."
These lawyers could be disbarred as there is always an obligation to pay irrespective if the owner, or deed holder is in arrears. They may opt to pay the note holder via escrow to ensure that they will not be evicted.
This scenario was actually on a "Judge Judy" show a few months ago in which she judged in favor of the plaintiff (deed holder & landlord)) undergoing severe financial hardship because the tenant claimed that they did not have to pay the landlord because of the arrears and possible default.
Generally the following clause is incorporated into our leases: (Florida btw)
MISCELLANEOUS OTHER PROVISIONS: This lease is subject and subordinate to the lien of a mortgage or deed of trust or encumbrance now or at any time hereunder placed on the premises. The TENANT agrees to promptly execute any instrument evidencing such subordination that the LANDLORD may request of him. The TENANT further irrevocably appoints the LANDLORD Attorney-in-fact to execute any such instrument for him and in his behalf. The conditions and agreements contained herein are binding and may be legally enforced by the parties hereto and no failure to enforce a breach of any condition or agreement herein shall be construed to be a waiver of that condition or agreement or of any subsequent breach thereof, or of this lease; the right of LANDLORD under the foregoing lease may be to forfeit any of the said TENANT rights, including but not limited to the LANDLORD’S right to pursue eviction proceeding in the event of only partial payment of any sums due at any time by TENANT; interest on any past due amounts owed under this lease, or on any court judgment for money damages, shall accrue at the highest interest allowed by law without demand, and such interest is defined and considered to be additional rent; it is further understood and agreed between the parties hereto that time is of essence of their Lease and applies to all terms and conditions contained herein. Each maker authorizes the garnishment or attachment of his/her wages to the fullest extent permitted by law, including without limitation, Florida Statute 222.11(2)(b)(1993) as amended from time to time.
The greatest force on Earth, compounding interest. - Albert Einstein
I don't know what state this happened in but lets first start with the property. If you take anything away from the property especially in a situation like this one you could and probably would change the structure of power and be found guilty of some sort of harassment. Wrong is wrong no matter who's doing it. I would reread the paperwork (Lease) that was signed by the tenants first. To see if there is something there that I've over looked. Seeking the advise or assigning to another investor is a good option. Trying to find another lawyer is another idea. Last, cut your loses and walk away. The foreclosure will evict them. The tenant can't come back and ask for what you never collected. I'm not a legal adviser nor do I claim to be. These are my own thoughts. I to am interested to know what the correct action will be to remedy this kind of situation. We all may go through it at one point.
lbrown