I have property valued at $950,000. Included is my primary residence and 8 other leased townhouses. I have $65,000 in equity in my primary and about $180,000 spread amongst the other 8 properties. Here's my problem: I used credit cards to make a lot of the renovations. I have almost $60,000 on credit cards and the rates are killing me!! The properties are cash-flow positive, but the interest is killing me. My credit score is good, but know one will give me credit because my cards are maxed out and my debt. When I went to refinance my primary residence or get a Home Equity Loan, I was told I could only own a maximum of three properties other than my residence. I tried several banks and they all say the same thing. I have leases so I cannot start selling any properties until April/09. I do not have any liquid cash/savings of a significant amount so I need to somehow leverage these properties to kill these interest rates (I also tried renegotiating the rates and they wouldn't). HELP!

I don't get why on earth you put $60k in renovations on credit cards - surely you should have sought loans for these??

Brian, I used credit cards also to improve an investment property. My plan was to purchase with a HELOC, improve the place using credit card debt, then refinance using the much higher property value. This way you avoid the high cost "hard money", and just pay to originate a single mortgage. I've done this once and am about to do it a second time.

Its4me2 - just because you have renters does not mean you can't sell a place. You would be looking to sell to another investor. Many investors would love to buy a place that's already rented out.

I'm curious about the cap on number of properties owned. This doesn't sound right to me. You should be able to own as many as you want. But there is a limit on the number of mortgages you can have (backed by Freddie Mac/Fannie Mae), and that limit used to be 10. I'd be very surprised if the limit changed so drastically. Can you clarify from your lender(s) what specifically is limiting you? Is it a new Freddie/Fannie limitation?

Otherwise, if you can't sell or refinance, take normal (but hard) debt reduction route. You must figure out how to pay more than just the minimums. Cut expenses anywhere and everywhere. Sell or downsize on other assets. Get an extra part time job if necessary. If you can struggle through, those properties should be a great deal for you.

It sounds like you attempted what is know as a Mortgage Modification. I would suggest contacting a professional mortgage modification company to negotiate on your behalf. They are much more effective as they know the ins and outs of the process and what is possible.

As for the credit cards, I would suggest that you consider debt settlement. Beware of companies that charge upfront fees for debt settlement. I know the comany Mitigatation America does not charge upfront fees.

Debt Settlement will negatively affect your credit however it is the most time and cost effective solution. It is also important to be conscience of the fact that good credit is important when borrowing money, not paying it back. I am in no way suggesting to not repay your debt or not to be concerned about your credit rating, merely suggesting to be conscience of the "debt treadmill" where you are not making headway and reducing your debt. Some people make the mistake of spending years and years trying to payback their debt conventionally while they struggle to make ends meet.