WE have 2 rental properties and are broke...

too many houses

LoanSafe Member
Sep 27, 2013
Hi all, need some advice....

We have a house in a rural area of PA that we rent out. Some facts-
*Bought in 8/2007 for 138k plus 2k up front usda crap, so 140k
*Mortgage is a USDA guaranteed 30 yr through PNC.
*taxes when we closed were 800, doubled 2 months later, and now are tripled.
*current mortgage is 1225

THis house was a thorn in our side from day one for many personal reasons. too many to list.
We decided to move for our sanity in 5/2010 and was laughed at when we tried to list it. Even the agent that sold us the house WOULD NOT list it because it was worth so much less. So we decided to rent it out for 900 a month. we moved to NM & purchased another home without much of a problem. To make things more complicated, about a year ago we moved AGAIN TO UT and purchased a home here (yes 3 houses) and rented out our house in NM because we were not sure if UT would work out and thought we wanted an option to go back to our house in NM.

So back to PA house, for 3 years now we have been covering the difference of rent of mortgage (they are now paying 1000 and btw Same tenants are there as they keep saying the want to buy) we wanted to sell it before we bought UT house but we knew it would still be hard and a huge mess and it would be so much easier if tenants purchase it so we decided to give them more time. Well, the tenants previous forclosure is finally all cleared up and they can buy again, but they have NA credit because of no credit cards or car loans, nothing, SO now we still have to WAIT for them to get a credit score and get approved to buy.they are constantly late with rent paying in parts through the month. we cover the association dues (400 a year) and its just giving us a lot of stress...

WE are going broke waiting and I know the house will sell for peanuts otherwise, besides the whole kicking them out thing (they have kids and i dont want to put them out)

My questions are:
1) how long would it take our credit to bounce back if we foreclose onPA house, considering we have 2 other houses we pay on, various credit cards and 2 auto loans?
2) will USDA give us a really hard time because it is rented out and make our lives miserable?
3) are our other properties at risk to be "reposession" due to debt to government?
thanks for any advice in advance!


LoanSafe Guide
Jun 18, 2009
SF Bay Area CA
too many houses

Thanks for your post. Unfortunately your situation seems to be a real "chocolate mess" :cheesy:

First let me assure you that your other two properites aren't at risk. And USDA can do nothing to you other than FC if you follow my recommendations below.

For more info on consumer credit, I recommend you visit one of the dedicated credit sites on the net. It's difficult to predict how fast an individal's credit will recover, as each file is different.

I recommend you consider taking the following actions:

1) Immediately stop making all payments on your PA house, to include mortgage payments, property tax payments, HOA fees, etc.

2) While I realize you may not want to do so, I recommend you evict those tenants and replace them with good ones. Frequently tenants say they want to buy the property; they almost never do. I say enough of their promises, excuses, & BS.

3) If you'd rather operate that rental as a (non-profit) charity rather than a profit-making operation, so be it. And once you've decided to behave as a charity, you might consider no longer complaining.

4) Once you've replaced those tenants with good ones, and you've stop making payments on your mortgage, property taxes, utilities, HOA fees, etc. you'll realize immediate positive cash flow rental income, and will continue to enjoy that recurring rental revenue for many many months until your lender (PNC) finally gets around to FCing.

Good luck and have fun!
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