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Short Sale- Not in Foreclosure

I have an investment property (not residence) with a CLTV of ~160%. I am current on both the first and second mortgage.  I can still "afford" to make payments, but I want to sell, because I can no longer maintain the home and the headaches that go along with it.

When I bought it I didn't have kids, now I work longer hours and need to care for the kids and don't have time to spend my weekends fixing things and chasing tenants for cash.  The house needs some capital improvements that I don't want to pay for.

The three units are all currently occupied and I basically break-even monthly, until something unexpected comes up (ex. 7k chimney repair in 2011).  Over 9yrs, I have probably lost $50k.

I want to sell, but I understand Wells Fargo is going to ask for my personal finances.  Can I work something out with them based solely on the housing finances (not my personal finances), which I have going back 9yrs?  Do I have any chance of getting a short-sale approved, and them not chasing me for the difference if they know I could pay?  The home is in Massachusetts.
  • July 29 2013 - Lynn
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Answers (5)

I'm also a landlord in the area, so I can relate.  It sounds like a short sale would be nearly impossible to pull off, but it also sounds like you could benefit from an affordable property management company to get back some of your time and maybe a small rent increase could still keep you at break even.  Have you looked into that at all?  Or perhaps a creatively structured lease purchase option?
  • October 02 2013
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I would look to an expert in the legal field and see if they could get. Modification done for you. I would not try to do it without a pro.
  • July 29 2013
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Can a hardship simply be that I cannot physically manage the property anymore? I don't have the "disposable" time for a lack of a better term, to babysit tenants and their clogged toilets, not to mention emergencies. When my wife is on call or working nights I can't leave the kids at home.
  • July 29 2013
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I understand your frustration.  In order for a short sale to exist, there must be some type of hardship.  You could try to see if they would do a loan modification so your payments would be lower and then maybe you could have some type of cash flow to save in case repairs are needed.
  • July 29 2013
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Profile picture for Outer Banks N C
For a short sale there needs to be a hardship and often late payments. It sounds like you won't easily qualify for a short sale and selling an investment property that loses money won't be easy either.
  • July 29 2013
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