In recent months, we’re seeing an increase in short sales in commercial, multi-family and other investment properties. Just like homes all over the country in general and Kansas City in particular, values have dropped over the last couple of years for these types of properties. Borrowers abilities to carry the obligation on reduced incomes from these properties and other sources of income is diminishing. As a result, lenders are willing to consider a short sale as an excellent opportunity to assist in bettering their balance sheets and loan portfolios. We are seeing this all over the Kansas City area including Johnson and Wyandotte counties in Kansas as well as Jackson county in Missouri.
There is typically much more for the lender to consider for a short sale on an investment property vs someone’s personal residence. The financial condition of the property itself is taken into account including income generated, expenses etc, as well as the physical condition of the property. In addition, while the loan may have been made to an owning entity other than an individual in order to procure the loan, the lender may have required the loan to have one or more personal guarantees from the entity’s shareholders, members etc. In most of these cases, the lender will require a review of those guarantors personal financial condition and their other assets as part of the short sale review process.
If you are involved in the ownership of an investment property and are struggling to keep the payments going to your lender as a result of the current economy, a short sale may be a great avenue for you to consider as an exit strategy from that property. We have experience working with local, regional and national lenders in these types of properties where the seller has determined a short sale is in the interest of both themselves and the lender(s). If you’re considering how to get out of what seems to be a nightmare in some form of investment real estate, call us and we’ll help you determine if the situation can be handled with a short sale. In some instances, it is possible to modify the loan package in place to provide for a situation where you can stay involved in the ownership. Others, where the value, condition and/or income has diminished to the extent that it may be unrecoverable for the present owner, a short sale may be the best option available for both the owner(s) and lender(s). Call us today for a no cost, confidential review of your property.
