This story is one about plain luck and there is no strategy to it, but I thought it would be interesting to share my story about how I got lucky and avoided foreclosure on my very first investment property.
A few years back, I wanted to start beginning investing and got my credit together and decided that I wanted to be a landlord, make some passive income, and live the the American dream. After studying how to invest in real estate, it was time to get involved.
In my mind this was going to be the first of many properties that I would aquire for the cheap prices, renovate the properties, refinance them, rent them out at a profit, and enjoy the good life.
The reality of my situation was something different. Obviously, the renovation went wrong, over budget, and took me much longer than I anticipated. The reason I say obviously is because it seems like this is the norm amongst most of the people that I know that got into the real estate game prior to the bubble bursting and many people losing their shirt.
Well, eventually, I got the property all finished up, looking good and even got a renter in there. During the process, my credit got a little dinged up as the economy began to crumble beneath is. I was all good as I had a renter in my property that was actually paying the rent.
The Bank Goes Under
I had a rehab loan on the property and after a year and a half the bank goes under and out of business. The property loan was taken over by the FDIC. Now, the bank didn’t tell me that they were going under so it seems for months they knew and I was throwing money into a endless well cause my little payments were not going to save them.
The sign I should have picked up on was this bank was never reporting to the credit agencies on the progress of my loan and my payment behavior. I wanted them too as I was up to date and and on time, but they didn’t. That was the writing on the wall.
Eventually, my tenant stops paying. I get a call from the FDIC saying that I was a year behind in mortgage payments, which was some BS cause I had been making payments the entire time. The old bank was keeping no records, so I could have told them anything.
They for a year, I didn’t hear from the FDIC, the first bank, tax companies, no one. It was the weirdest thing. I didn’t put a tenant into the property cause I didn’t know what to do and didn’t want to subject them to my nonsense. Looking back, I should have put a tenant in there and I could have collected all that rent in the mean time, but I was trying to do the right thing.
Well, last week, something said go and look at the deed on the property cause my wife had noticed some movement at the property. We knew something was up. Check this out!
THE BANK ASSIGNED THE PROPERTY TO SOMEONE ELSE!!
That’s right, they didn’t foreclosure on me. They just assigned the property rights and loan to another investor, didn’t tell me anything. While this is kind of bogus on their part, they did me a tremendous favor
They didn’t foreclose on me which was going to destroy my credit and I don’t have to pay all those back taxes that wasn’t paid because the new buyer is responsible for that as well.
I lucked out, but now you can’t tell me that the FDIC isn’t my favorite government organization because they have officially saved my life, credit, while giving me an opportunity to realize that I am not a property landlord and don’t want any part of the industry on that end.
I am thankful for my experience, but even more appreciative at the outcome. Yes, I didn’t loose a few thousand dollars that I put into the property for down payments and supplies, but my credit is in tact and I know that I learned a valuable lesson from all of this and found my place in the real estate environment….and it is not being a landlord!
Anonymous Investor
PS: If you have a story to share about your investing experience, please don’t hesitate to share it with us so the people of this community can learn and grow together.
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