The "keeper", the person who has been select to manage the property while it is in the foreclosure process, has been collecting rents directly from the tenants and is in the process of paying off the bills that have been racked up by Joe's months of non-payment. The power was about to be shut off for non-payment and that has been taken care of. There were some other bills and it required some of the other mortgage investors to contribute some more money to pay them off. Of course, they will be repaid when this is all over.
So it looks like our people are finally turning the building around and getting bills paid and maintenance taken care of. Joe may file for bankruptcy and delay this further, but at least the property is being stablized and he is no longer in control of it.
And what is the exit strategy for these properties? It really depends on how the foreclosure process plays out. We have the following choices:
- Sell our interest now at a discount. No one seems to be willing to do this. Of course, no one wants to take a loss, but I really feel we will be able to get our money back on this, so I don't see a need to sell out at a loss right now.
- Joe can come up with money from other investors and pay off our mortgage. This is pretty unlikely.
- Wait for foreclosure to happen. Someone other than us buys the properties at auction and we get paid off. We are then completely out of the properties.
- Wait for foreclosure to happen. No one else buys, or we bid higher than anyone else and we will become the new owners, then we can sell our interest to other investors.
- Wait for foreclosure to happen, become the new owners, and then keep the property ourselves. We'd need to discuss who will manage it, the costs involved, any monthly income we might receive, etc.
- Wait for foreclosure, become the new owners, and one or more of the owners will get a new loan to pay off any investors who don't want to remain owners.