If you know the Knightdale area, you've probably heard about Princeton Manor before. It is one of the nicest, most upscale neighborhoods in Knightdale and was one of the most expensive ones until the market started to slow down. Homes in Princeton Manor were selling in the 300k to 470k range which made this neighborhood out of reach for most first-time buyers.

Like most other neighborhoods, home values in Princeton Manor have suffered due to the market condition and many foreclosures and short sales in the neighborhood. While homes were selling for $120 to $145 per square foot three years ago, the average square footage price is now down to around $100. Not bad for a custom home with hardwood floors, custom kitchen cabinets, granit counters, custom trim package, custom tile baths, etc! There is a lot of inventory to pick from right now. If you'd like a list of homes availalbe for sale in Princeton Manor, let me know.

At $219,900 the sellers of 1003 River Grove are selling their home for less than they paid for a few years ago. This home has all the upgrades that the more expensive homes in the neighborhood have AND it has a walk-up attic that could be finished. There is a swimming pool and two tot lots availalbe for neighbors to meet and chat. Click on this link for a virtual tour:  http://www.petrathomas.com/Listing/VirtualTour.ashx?listingid=14246871

When completed Princeton Manor is going to have about 350 homes. To date there are only 160 homes up which leaves plenty of room for growth and potential appreciation whenever the market turns around. Whether you are a first time buyer or an investor, this home is a great deal in a beautiful community and in a town that will in my opinion be one of the first ones to bounce back: Knightdale!

It happens every day and this is not the first time that a family contacted me because they need to find a place to live within a matter of a day or two because their landlord got behind on his mortgage payments and the bank is foreclosing on the property. And usually the tenant doesn't find out until the sherrif comes to service the foreclosure notice. Most likely this tenant has paid the monthly rent on time and somehow the landlord let the mortgage fall behind. Yes, there are many bad tenants and often times the landlord is the one who ends up with the short end of the stick, but in today's market, it's not unheard of that the tenant ends up in a bind because the landlord failed to pay the mortgage.

Sometimes the mortgage company will offer the tenant "cash for keys". This means they will pay the tenant to move out in a timely fashion and to leave the property in broom swept condition. The amount can range from $500 to $2,000 depending on the property and the situation. While this amount of money cannot make things right, it can certainly help the tenant with the unexpected moving expenses.

How can you as the tenant avoid this situation?

1. Ask your potential landlord to see the most recent mortgage statement (it will show whether the owner is current on his payments).

2. Ask you potential landlord for permission to write your monthly rent check directly to the mortgage company but let him send it in(that way you know it will get into the right hands and at the same time the landlord knows that the payment gets to the mortgage compnay on time).

3. Check with the register of deeds to see whether the foreclosure process has been initiated. http://www.wakegov.com/deeds/

4. If you have good credit and a stable income, consider buying a home ... maybe even the home you're currently renting. Talk to your landlord to see whether he would consider selling the home to you. If the home is already in foreclosure, the bank will many times accept less than the full loan amount (this is called Short Sale) rather than go through with the foreclosure. If you would rather buy another home, there are thousands of good deals out there rightn now. It's never been a better time to buy! There are many advantages to owning a home:

a) Tax benefits (the mortgage interest you pay is usually tax deductible); b) an additional tax credit of $7,500 if you buy between now and May 2009: http://www.federalhousingtaxcredit.com/; c) your monthly payments reduce your principal loan amount and help build equity; d) you're home will most likely appreciate over the years and you will accumulate equity; e) you can paint and decorate your home to reflect your personality.

What options do you as landlord have once you fall behind?

1. Always, always get in touch with your lender. Don't try to hide from them, that will make matters worse than they already are. Find out whether your lender would be willing to do a loan modification. A modification can mean different things: if you have a high rate or an adjustable rate, they may agree to lower your rate; if you're just 30 or 60 days behind, they may agree to add the arrears to the principle balance so you may continue to make your regular payments. In any case you will have to show that you have the income to start making your regular payments again.

2. If loan modification is not an option and you have equity in the property, you may want to consider selling the property. Other investors are often looking for properties that are already rented out which means that they will have instant cashflow. Also, consider asking your tenant if they may be interested in buying the home. But make sure to be honest about your situation! You don't want to sign a purchase contract and get foreclosed on in the process. A pending foreclosure is a material fact and needs to be disclosed on the residential seller's disclosure.

3. If you owe more on the property than it is worth, you should contact your mortgage company about a short sale. Many lenders are willing to accept less than the amount owed in order to avoid the foreclosure. They're not really looking to own real estate. Even though you're not allowed to make a penny in a short sale, there is a huge benefit to you: instead of a foreclosure on your credit which can take a long time to recover from, you will "only" end up with late payments on your credit. And best of all, you will not be responsible for the balance according to the Mortgage Forgiveness Debt Relief Act: http://www.govtrack.us/congress/bill.xpd?bill=h110-3648 Your credit will recover a lot quicker from late payments than it will from a foreclosure. Most loan applications ask "have you EVER had a foreclosure?".

If you as a tenant need help finding another home, please call me at 919-369-0496. I'll be glad to help and maybe it's time that you check into buying your own home! If you are the landlord in this situation, I may be able to help as well. Get with me as soon as possible! The longer you wait, the less options you will have. I'm a Certified Foreclosure Prevention Specialist and can help you figure out what your options are. However, even though I may be able to help you, I cannot and will not give you any kind of legal advice. I strongly suggest that seek professional legal advice!

About 1 year ago I sold a nice 4BR, 2.5BA home to a first time investor. The 2200 sqft home with 2car garage was kept in great shape by the previous owner and it was move-in ready for the new tenants. The home showed well and it didn't take long at all to get it rented. We had several rental applications and after checking out all the applicants the investor picked the family that had the best credit, income and looked like someone that would take care of the home.

Now 1 year later the tenants have moved out because the husband's hours had been cut back on his job and they felt they could no longer afford the rent. The investor thought all it we had to do was put another tenant in! NOT! She couldn't believe what she saw when she went into the home after the tenants had vacated. The interior needs to be painted throughout, the once like new carpet is practically black and from the looks of the steps, the tenant didn't own a vacuum cleaner. There is a hole in the vinyl floor in the kitchen and one of the kitchen cabinet doors was broken in half and glued back together. Estimates for paint, new floor covering and other repairs necessary came to over $5,000. The one month security deposit my investor is holding covers 1/4th of this expense.

This family seemed to be the perfect family for this home. The wife and the husband had both been on their job for several years. They kept their cars clean, the kids were well behaved. My 13 years of experience told me that they would take good care of this house. I had prepared my investor for the fact that she would have to paint and replace flooring, etc. Sure! But after just one year? My investor inspected the home three times during the lease period and says it looked good everytime. Luckily she has the money to get all the necessary work done, but this one experience ended her dream of owning investment property and I will probably end up listing the home for sale. While it's great time to buy and hold, this just shows being a landlord is not for everyone!