WWKD,
I have two properties. One I live in the other I rent at negative cash flow of $200. I owe $103,000 market value $67,000. property is 26 year old.
Should I foreclose and get read of it? Should I stop payment on it? How bad will that affect my credit score although it may not matter at this point because my credit is not at its best. Thank you for your help and expertise.
Signed Two Properties
Dear Two Properties,
I don’t recommend just stopping payments, after all you have a responsibility to your renters and they must be considered first. They are paying you rent, they don’t deserve to be evicted by the bank due to a foreclosure by you not paying what you agreed to pay with the bank that is just not right or responsible.
Talk to the bank, let them know about your situation and see if they can adjust your mortgage on the rental property. If not, discuss with them what your options are, they don’t want another foreclosure anymore than you do. Maybe a short sale is possible, or deed in lieu of foreclosure.
Consider the possibilities of talking with your renters about a rent increase, be sure to follow your current lease terms. Also, maybe the renters would be interested in buying the home from you, that is something else to offer and/or discuss with them.
