Tigermak Posted August 28, 2018 Report Share Posted August 28, 2018 Bought a house to flip in June of 2016. An old friend of mine was supposed to be doing the work on it, it has been a disaster. He spent unwisely and wasted the 26,000 I had for remodel. He has told me he won’t have any money to put into it to finish it and that we would need to ask the bank for more to do that. I don’t have the cash to put in to finish it. I am sorting my options and need to know some things. What happens to me and my current house that I live in if the bank forecloses on the flip house? Also, I asked the loan officer about a short sale and he said they won’t do that. The reason I am asking about that is because the offers I have gotten on the house in it’s As Is state have been for way less than what I owe on the house. I owe 120k and there has been an 81k offer which I would not be able to cover. What are my best options with this situation? It’s a horrible situation I know. How can I come out of this? Wait for foreclosure and then declare bankruptcy? Any advice is appreciated. Quote Link to comment Share on other sites More sharing options...
Goody_Ouchless Posted August 28, 2018 Report Share Posted August 28, 2018 You'll need to look at your State's rules. I believe in some places they can try to recoup, in others they can't. I suspect it will be more difficult with an investment property, as I believe rules were put in place to prevent this type of thing from happening. 1 Quote Link to comment Share on other sites More sharing options...
WhoCares1000 Posted August 28, 2018 Report Share Posted August 28, 2018 If you can come up with some money to cover the difference, you can offer that as part of the short sale. I also have to ask, does the same bank carry the mortgage on your personal property? I ask because I do not know if the bank will try to cross collateral both loans. I too am not sure if investment property would follow the same foreclosure rules as homestead property. You will need to talk to your attorney on that. The worse case scenario is that the bank forecloses and then get a judgement against you for the difference. They might then be able to put a lien on your home property but if they do not hold the mortgage on that property, they will be in 2nd position (meaning they would have to sell your own home for enough to cover your mortgage AND their lien). Many times, they will wait until you try to sell or refinance. I would keep trying to do a deal however if you can. 1 Quote Link to comment Share on other sites More sharing options...
Tigermak Posted August 29, 2018 Author Report Share Posted August 29, 2018 Thanks for the replies. The mortgage on the house I live in is with a different bank. The loan officer is saying they will not accept an offer on the house that is for less than the owed amount. He also said initially that they would not do a short sale but today said he would have to “see” if it is a possibility. Sounded like it could be a last resort but avoided for the most part. Also said if it forecloses, they would sell it at Sherrif’s sale and any deficit I would owe and they could recoup if I ever sold my house and made anything on the equity. Also waiting to get an estimate on cost to finish the house and if the bank will add that. Quote Link to comment Share on other sites More sharing options...
Harry Seaward Posted August 29, 2018 Report Share Posted August 29, 2018 What's your credit like? How much do you realistically think construction will cost to get the value of the house up to $120k? Can you get a loan? I use CreditKarma and every time I log on they have loan offers for me. Marcus has great reviews, but OneMain is also pretty good. You can pay the loan off as soon as you sell the house. 1 Quote Link to comment Share on other sites More sharing options...
Tigermak Posted August 30, 2018 Author Report Share Posted August 30, 2018 My credit is good, 705. I’m waiting to hear back from the bank to see if they will add it just to complete the house. Quote Link to comment Share on other sites More sharing options...
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