The Landlord’s Prayer
By Homer Guthrie, Expert Homeowner
Believe me, the last thing in life I ever wanted to be was a landlord. The thought of it reminds me of the old silent movies tying his poor tenant to a railroad track as she screams, “No, I can’t pay the rent!”
It started at one of our Friday coffees at the Deli Delight where I get together with my real estate team-Bea Meriwether, real estate agent and Earnest S. Crowe, mortgage guy. Bea was selling a bank-owned bungalow two blocks away from me in my hometown of Mirage Mills, the Chernobyl of American real estate and the epicenter of the foreclosure crisis. Since there were two dozen fire sale-priced properties listed for sale within a mile of hers, she was having a hard time.
“It would be a perfect investment property for you and Felicia. You know the neighborhood like the back of your hand. It’s close and easy for you to manage. It’s in very good shape for the neighborhood and it’s priced to move fast,” said Bea. Her voice dropped a half-octave and she gently placed her hand on mind.
“And I know that the bank is dying on this one. They’ve taken a beating on it for more than a year and they’ll do anything to get it off the books.”
Nothing she said changed my mind. The bank could go on taking a beating for all I cared. Then Earnest started in on me.
“Homer, wise up dude. How much you making on your 401K in this market? I’ll bet you’re losing money big time.”
How did he know?
“I’ve got clients with rental properties just like this one who are making eight percent or better on their money AND when the market recovers they can sell it for whenever they want for a tidy little investment. Dude, everybody I know In Mirage Mills is doing it.”
Just a few years ago everybody Earnest knew in Mirage Mills was taking out subprime no down low down self-destructing toxic loans to buy homes priced twice as much as they were worth, but Bea butted in before I could remind him.
“Homer, we’re your friends. All we’re saying is that we’ve come across a terrific deal and we felt it was the right thing to do to bring it to your attention. We just don’t like to see you losing money on your401K.”
How the heck did she know? Was Felicia complaining to her friends again about our finances?
By the time we finished up Bea had whispered in my ear a price for the bungalow that was considerably below what it was listed for and its list price was already discounted substantially below the going market value in depressed Mirage Mills. Earnest discussed financing options that would, with my 401K, give us enough to make the purchase and pay for estimated repairs.
That night I talked it over with Felicia, who surprised me by pushing hard for the idea. I grew increasingly suspicions that she had been talking to Bea and Earnest about my investment skills.
“Besides the money we would make, just think of all the investor stuff you would learn. You would become an even more expert expert homeowner,” she said.
So I went to bed with my head spinning. The more I thought about it, the more I convinced myself it would work. However, I was still afraid. In the early hours of the morning I tried to get to sleep by making up a little prayer that goes like this:
The Landlord’s Prayer
Help me Lord, for as you know
I’ve bought a rental bungalow.
It’s small and plain and seen its day
Yet it has cost my 401 K.
Lord, I pray to you in darkness and fear
As I wander the wilderness far and near
Seeking cut-rate contractors who may exist
In the bottom ranks of Angie’s List.
Forgive me oh Lord as I do penance
For all the things I do to my tenants:
Rental hikes and credit snooping
Cheap repairs and leaky roofing.
Bless my renters, give them skills
To patch and paint, to fix all ills.
Lord, keep the plumbing working right
So they never call me in the middle of the night.
Dear Lord I pray please hear my plea
Spare me the throes of bankruptcy.
Keep cash flow high and vacancies low
Or else I’ll end my days in woe.
For reprint rights and feedback, contact Homer Guthrie at email@example.com.
Copyright 2012 by Reecon Advisors LLC. All Rights Reserved.
I bought rental property years ago and it was the best thing I ever did. Being a Landlord is not for everyone. I can do my own repairs and that certainly helps. The whole key is screening the tenants. Not eneryone is as good a renter as you were.
He can still stop the foreclosure at prtety much any time up until the date of the sheriff sale. If that’s the date you are talking about for the foreclosing date, then he still has some time, but needs to get something together quickly.The bank won’t accept just a regular payment right now, or a partial payment. They’ll probably want the entire amount that is behind right now, or they’ll want to work out some sort of repayment plan with the owner. Call the lender to find out exactly what plans they can offer and how much money he’ll have to fork out to them.But, if they don’t accept a payment plan, there are a few other ways to stop the foreclosure date.First, he can simply file Chapter 13 bankruptcy. That puts all creditor collection efforts on hold while the debt is being dealt with by the court system. It can stop a sheriff sale the day before the sale, and might work as a last-ditch effort. Not the most preferable way to stop foreclosure, but homeowners should keep it in mind.Second, just paying back the entire amount behind will get the mortgage reinstated. It will bring the status of the loan back to current, and end the foreclosure process. If there are no arrears, and no part of the loan is in default, the bank can not continue foreclosing.Last, going into court and asking the judge to order the lender to try to work something out is always a solution. So few homeowners take up this opportunity, though, simply due to fear of the legal system. But the judge can order the bank to consider a repayment plan, or offer some other resolutions besides going straight through with the foreclosure process. The judge can also put a hold on the sheriff sale, since he is the one ordering the sale in the first place.Foreclosure is never inevitable once it starts. Just take advantage of what’s available and make sure the relative can make the payments on time again.Good luck.ForeclosureFish