Please help. I have a property in Pa. that is owned by a land trust. I purchased the land trust a couple years back and after many difficulties secured a commercial loan on the trust personally gaurenteed. I've been forced to relocate to Mi. within the last year for personal reasons. The property in question sets vacant currently and is in dire need of repairs to be put back into income earning position.
Currently it is difficult at best for me to deal with a bank in a long distance relationship. I have the property up for sale and am attempting to shelter myself from as much of this plus of a $1000/mo. negative cash flow as possible. Though this deal has come to be very sour for me payment of incured debts is extremely important to me both from a continued buisness standpoint primaryily a personal integrity stand point. I'm out to deal prefably with a local Michigan bank with the ability to lower my monthly overall payments. This will allow ofcoarse to whether the storm better until the property sells. I currently have a seven year note at 8.4% apr. I owe about 72 more months in total with a monthly payment of $692/mo. Any advise on how to change lending institutions without incuring the difficulties of changing the deed over from being owen by a land trust, etc. would be greatly appreciated.

Thank you,

E. Lipow

E. Lipow :

For what you have told me, I have to agree that the best thing to do will be for you to sell the property. Being a landlord is hard enough without having to deal with managing it two states away. The problem that I see is that refinancing with a property that is not producing will be difficult. What exactly will be your source of repayment? Personal income?

I think it is time to make the hard decisions by sitting down and writing all of the options and possible outcomes. There is something to be said about not throwing good money after bad, but I am not saying that you should walk away either. You can either sell, do a fire-sale at lower than market, fix up/rent/refinance, walk away or refinance.

While you might want to deal with a Michigan bank, that might not be possible. All banks have an area of operation, and it is against their policy to lend on properties outside of the area. I am not saying it does not happen, but that is very rare. The fact that the property is held in a Trust is no problem as long as you have the power to encumber it.

Hope this helps.