Money from rental

[NeedNewStart]

Hi everyone....

Just looking for some opinions on my situation. Here's my story.

I have not other debt but my home.

2006 purchased home in NV for $308000
First mortgage - $215000
Second mortgage - $93000
House is currently worth about $150000

Moved out of state in September and got a renter for the house. I was really going to try hard to make it work. They have a lease through the end end of August. They pay $1000/month.

After the move, my income went WAY down. Now there is no way I can keep the house and I don't want to anyway because it's soooo far underwater and my loans are interest only.

I'm 3 months behind on the second and 2 months behind on the first.

My question is.....

Should I keep accepting the rent from the renters? Should I use it to pay the first mortgage?

One lawyer I talked to said to just pay the first mortgage with the rent every other month. The first mortgage is $1500/month so I could pay it about every other month.

Another lawyer said to keep the rental money in an account and hand it over when I eventually file BK.

I can't file BK for about 6 months to a year because of my income and because I need to spend down my tax return.

I'm not sure what is the best way to go...... any opinions would be great!

[GoFigure]

The only thing I can tell you is that it is perfectly legal for you to collect the rent while you are the owner of record for the home.

If you let the first mortgage go into foreclosure you can still collect the rent up to the day of the foreclosure sale.

When I moved to TX from Las Vegas I rented my place out. The tenant pays me $1150 and my mortgage payment is $1685 a month. I add the differience each month to the mortgage.

I paid for my place in 2006 $228,000 and I took out a $180,000 mortgage. Today the banks are selling the same home as mine for $88,000 so you are not alone.

I can afford the place and I am never going to default on anything again. I went BK in 2003 and that was enough for me.

[dingdong]

Don't screw over your tenants!!!!!

They did not ask to be brought into your mess.

You can really screw up their life if they have nowhere else to go, especially in Nevada, tenants have very little protection if they are evicted due to foreclosure.

Inform them of what is going on and let them make the decision to risk homelessness if they want to stay.

Are you going to give them their deposit back when they are kicked out by the bank?


Seriously, tell your tenants what is going on and let them leave if they want to. How would you like to be in their shoes when the bank comes to kick them out with no notice.

[NeedNewStart]

DingDong,

I have no intention of letting the tenants go homeless! I'm not planning on pocketing the money either. I guess I'll just let the property manager know what's going on. Then they can figure out what they want to do. The foreclose process will probably take 6 months at the least. I do intend on refunding their entire deposit... I don't even care if they live there for free as long as they can. I just can't keep this whole thing up anymore. I just want it to be over! I tried and tried and tried but I just can't do it financially.

[dingdong]

Thanks for posting that. You're a nice guy/gal.

I was a tenant in a foreclosed property, which was in FC when I rented it but the LL lied his a*s*s off to me and stole my deposit.

So I am a very big advocate for LL's telling their tenants what is going on.

IF you check the Nevada eviction laws you will find out that, unless a LL notifies a tenant about the FC, they have very little time to leave once the bank takes the house back. Something like 5 days. Try and find a house and move a family with 5 days notice.

It is one of the worst, if not the absolute worst states for tenants who are victims of FC, which is the reason for my post.

Nice to hear your a stand up guy/gal!

[NeedNewStart]

No worries... I'm just trying to figure out if there would be any benefit from continuing to accept the rent and use it to *kinda* pay the mortgage. I guess the only benefit would be that the renters could probably stay there until the end of the lease. I don't know, I guess I'll just talk to the property manager and go from there. They're welcome to stay or welcome to go..... makes no difference to me. I guess it would be better for the neighborhood if they stayed so the house won't sit empty.

I don't know.

[dingdong]

Talk to your renters and see if they might consider buying the property.

IF the bank is willing to do a short sale, maybe it can save you the trouble of a foreclosure?

You never know, probably a long shot, but worth a try? Maybe?

[NeedNewStart]

Good idea but I'm pretty sure it's 4-5 college kids living there.

[dingdong]

Good idea but I'm pretty sure it's 4-5 college kids living there.

Oooh, 4-5 college kids. Maybe they will destroy the house prior to FC and you insurance will pay it off?

Just kidding. My parents had rentals when I was growing up and we lived near a Uni and oh my God could they thrash an apartment. My poor father was constantly fixing those rentals up.

In one place they used the bedroom closet, which had a sliding door, as the trash recepticle, the closet was literally filled to the ceiling with trash, beer bottles, there was probably a few beasts in there too, who knows.

They finally got out of the rental biz cause it was killing my dad to do all the work.

[NeedNewStart]

Good point, I've considered that too.

[NeedNewStart]

I'm still trying to figure out what to do....

I need to wait to file BK until Jan/Feb and want to try to not get a judgement before that. I can make payments to both mortgages every few months. Will this prolong the foreclosure process?

If I do get the NOD, I'll still have 4 months to let them know that they need to move so I won't just be kicking them out with no notice.

[NeedNewStart]

What would be most beneficial?

1. Keep the rental money in an account and hand it over when I BK.

2. Let them live there free/tell them they can vacate or stay for free

3. Pay the mortgages whenever I have the money to try to stall the foreclosure so I don't get a judgment before I'm ready to BK

I really don't know what to do and need some feedback. Thanks!