Expert: Dick Dennis - 7/15/2006

Question
these properties are located in Jackson, Mi If you could help me find someone to talk in person that would be greatly appreciated. Thank you for all of your advice
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Followup To

Question -
I have recently gotten into real estate and I purchased five houses on my credit line.  I do not live in any of the properties, but I do rent them out. Now I am starting to see a problem with the tenents not paying their rent. I do not want to file bankruptcy and ruin my credit because I am in the process of purchasing a home of my own.  I really would like to get out from under neith of these five houses so I can purchase my house without any worries.  What are my options that I can look for? I need help.

Answer -
I am sorry you got into the rental business (yes, indeed it is a business like any other) before you educated yourself to do what you must do as a landlord. You MUST show your tenants that you mean business when they sign the rental agreement, but on the other hand you will help when you can. But only when they have lived up to their promises and agreements. Do not hesitate to serve the 3-day to pay or quit notice and 30-day notice. When they see you are firm and that you will report their non-payments to the credit bureaus, they may change their attitude. But on the other hand, you must realize that tenants are tenants because they do not have the money nor the resources to get it when the rent is due. They will give you all kinds of excuses for non payment (you probably found that out already).

Where are those properties located? I might refer you to someone who can help you in person.

I do wish you well, Chris.

Dick Dennis          dixiedee13@aol.com

www.OldProblemSolver.com

Answer
I just read an Online article about how Michigan is really going down the tubes real-estate-wise the other day. Seems like the downtrodden auto industry is really taking its toll on people holding investment properties or simply homes.

And I had a personal experience with a small house in Idlewild, towards the western side. I solved a problem for a St. Louis man who owned that house. I had all kinds of trouble with the tenant for about a year before I wound up selling it to her for (ready for this?) $5,000. It was about 900 square feet, two bedroom. So, I've had my taste of Michigan real estate.

Look, Chris, why don't you approach the lender for all those houses and lay it on the line? Tell them if they don't reduce the mortgage obligation for you, they're going to have five more houses in their inventory. But say it in a nice way. Also ask them to give you a moratorium on your payments until you can get yourself back on your feet. If they do it, they won't erase those payments. They will put them on the end of your total payments and obligation.

They may also want you to keep them up to date on how the properties are coming along periodically. I realize this is not going to be easy, but it's all part of the game. If you can arrange what I just suggested, you're going to thank yourself for being patient two, three years from now.

For now, that's the first thing I could think of in consideration of what's going on in Michigan. You're not going to get too many people interested in taking over your position. One more thing. You might also talk to an investment real estate broker in Michigan and see what kind of suggestions he/she might offer.

I do wish you well.

Dick Dennis          dixiedee13@aol.com