One of the biggest issues for people with a real estate debt is the management of their financial resources especially where there is a bank loan or mortgage involved.
In a perfect world, repayments on a house loan should be manageable as a percentage of total income, or in the case of commercial property, cashflow positive. However due to numerous factors circumstances can change and meeting loan commitments can become somewhat of a larger burden. This burden of not being able to keep up with loan payments places stress on the finances for property owners with one or many properties. For some this means short term sacrifice of a certain standard of living, but for others, they might already be too close to the cliff and need to back out of the situation as quickly as possible to avoid going over the edge.
We cant all expect to be expert financial managers, but we can at least take action when we know there is a problem and if we are aware there is also a process for resolving financial problems. The first step however is recognizing how long it will take for the “well” to run dry and the bank to issue a default notice. (and a black mark on your credit file)
The first signal for you to take action will be for example; a shortfall in financial resources causing the risk of missed payments, vacating or defaulting tenancy, news of pending financial crises and job losses, personal or close family illness, to name a few. If you don’t have the skill to prepare a plan for managing your debt commitments it would be wise to find someone to assist. PropertyResults.com.au can help in this area, alternatively there are people such as Accountants and even support staff at Centerlink who may be able assist.
The main objective is to start the process of getting things under control as quickly as possible and in advance of an event that risks placing you in harder times, default with the bank or even bankruptcy. Obviously for many their largest debt drains the most from the weekly income to service the loan repayments. The key question is; if the property that is attached to this debt was sold, would that eliminate or relieve the financial problem you are experiencing? Would it buy you more time and if so how much time? If not then other solutions need to be identified. However considering most people dealing with financial stress need to sell something to clear debt, their property is a logical place to start.
Motivation is a good thing, but selling real estate under pressure in a soft market is the opposite of what a seller should do. If word gets out the seller is in financial trouble, buyers are likely to expect a “bargain” and under these conditions the Seller who needs to unload their property is at the mercy of the market.
Although we encourage those pending financial hardship to deal with their situation swiftly, it is mostly when the situation becomes URGENT that the seller is placed in their weakest position. The earlier the situation is dealt with, the better and this is were we can potentially assist by either acquiring the property and taking the place of the Seller, or securing a particular buyer thus saving the Seller from bankruptcy or eliminating any further risk and preserving the Seller’s credit in the process.
We can usually provide a solution within a matter of days and depending on the situation, we can save on agents commission, legal fees, capital gains tax or early repayment penalties. Getting the property owner out of a stressed financial situation without financial and emotional damage also provides a quicker recovery at a time that suits them.
Most people would be relieved that they were able to solve their biggest financial problems in less than a couple weeks and take control of the lives once again. Our process for turning real estate debt into opportunities for buyers and keeping sellers from bankruptcy involves nothing more than a serious commitment from the seller and the skilled efforts on our part to bring it all together in the shortest time possible.
We encourage property owners who would like to sell quickly to get in touch sooner rather than later. All communications will be treated with the utmost discretion and in confidence.