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Ask Dave

Fix and Flip

Dave thinks Tiffany and her husband are in a BIG mess with the five houses they've tried to fix and flip.

QUESTION: Tiffany and her husband bought five houses to fix and flip, but they had a bad summer and can’t sell them. They can’t pay the mortgages either. They owe $350,000 on their biggest one. A couple of others are starting the foreclosure process. Dave thinks they got themselves into a BIG mess here.

ANSWER: You have engaged in something that almost never works, even with a good market. You’re in an unbelievable mess. The only thing you can do is continue to discount the properties and get them sold, before they are foreclosed on. If you can’t sell them, you’ll probably have to negotiate a short-sale with your lender without recourse if you sell the properties for less than what you owe on them.