Tough times tough market - Landlord Forum thread 345247

Tough times tough market by Anonymous (North Carolina) on May 27, 2016 @16:40

LL over 12 years in NC rentals has not done well. No quality renters to be found. A recent property in a bad neighborhood left in ruin. My property inventory is 20 with 8 empty units. I am considering of letting a few go due to the down market and quality of good renters.I am renting way lower the the market value . Anyway by Not paying the mortgage what would be the consequences my credit score is excellent however it would not matter if it took a hit? Please advise anyone who has experience this type of situation will be helpful

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Re: Tough times tough market by Garry (Iowa) on May 27, 2016 @17:48	[ Reply ]

Taking a "hit" on your credit score is an understatement. It will drop like a rock, probably below 500 within 6 months, and stay there for several years. You will not be able to get any kind of a loan for several years, or be able to refinance any of you units, unless someone will lend you a small amount at a very large interest rate, say over 20%. And the worst thing is, any lenders who lose money, could come back and sue you in court. If they win, they could attach liens against all the properties you still own, thereby leaving you with no equity in them if you try to sell them in the future. There are still good renters out there, in all price ranges,---- you just have to work a lot harder to find them. Do you have enough equity in some of them, so you could sell some at a greatly reduced price, and then use that money for the remaining units? I'm sorry you're in a down market right now. That's what happened in the recession of 2007-2009, when millions of people lost their own personal homes, and LLs were not spared either.

Re: Tough times tough market

Re: Tough times tough market by Magic Mike on May 31, 2016 @13:47	[ Reply ]

My rule of thumb when buying a rental unit is to ask myself, can I get at least $900 a month of it. If I cant, I dont buy it. I have found that under $900 I get problem tenants. Above $900 I get excellent tenants. $900 is a magic number for me. However, I am not in NC. You need to figure out that cut off for yourself. Your credit is already toast if you are more then 90 days past due. For 20 units you should have rolled these into a corporation. It would have shielded your credit. Sell off the worst units. Pay down some debts. Focus on profit margins. If you are getting below market rents your units are not competitive. Make sure they are clean with options that appeal to renters like parking, appliances, etc.