Expert: Ray Beggs - 3/20/2007

Question
hi Ray: my Q is little confusing but that how my wife and i do all day is talk about it and not know what to do, it's that we have this 2 story house which is tenant occupied ( who is a friend of mine supposing) and they are having allot of problems of keeping up with the monthly rent, problem is we have negative amortization or option arm loan on this house and we barely can do the min. payment and the principal is becoming bigger every month, the house is appraised for $ 580,000 and we tried to sell the house for over a year now as low as $ 520,000 and not a single offer, this house is in Palmdale area very nice golf course area built in 2005, 6 Br. 4 bath now on the other hand this investor is offering us $ 50,000 ( basically what we gave in for deposit) and buy the house, my Q is what to do give it to the investor or keep it and struggle with the payment and the tenants, what do you think about palmdale area will houses go higher or down( this house cost us $ 460,000 ) anyway i know U will say to refi and keep but unfortunately we can't because we've been late on the payment of this house many times because of the tenants and we can't afford an extra payment of $3000 a month, so give me an advice, thank you.

Answer
Hi Ara,

It's a tricky situation and one that I can tell you MANY people are in. If there is anyway to refinance the home into a fixed rate payment that you could live with, I would try that. Or, I would get a tenant in there who is more able to pay you on a monthly basis. If you must sell it, try to get the most for it that you can. Find a good Realtor and have them really work hard to sell it. Rates are pretty good right now and we are coming into the summer months and that is traditionally a good time to sell a house.

Best of luck,

Ray