I just had a tenant move into a hard to fill property (two family). The other half is still empty. Someone is interested in leveling the house and building twelve apartments on the site. It would be the solution to a big problem for me as I'm upside down on the property. In the mean time I need to try and keep tenants in the property to help pay the mortgage. My lease does not cover a sale. If I mention a possible sale, I fear any interested tenants will move on. And of course, the apartment thing might not work out. Need some wisdom here please. How should I handle this?

This is a guess, but I do not think changing the zoning probably will raise the offer your potential Buyer has considered paying. The buyer, as a professional property developer, has already determined what they will pay for the project, including the cost of your land assuming they can get the zoning changed. They already know about your lot, they know there probably aren't any other buyers for that lot "as is", and they are probably more familiar than you are on the process of changing zoning if they have done these kinds of deals before. No offense, but your attempt to change the zoning might actually be a detriment b/c they're probably counting on getting a discount for it assuming they will be the ones who do the zoning changes. Sort of like when I offer all cash, close quick, "as is" for various houses. I don't need the owner offering to fix stuff to get more money...I can usually do it faster and cheaper than they can, and I know that no one else is interested in their house.

My though on zoning is once a Buyer knows what the property is, their offer is pretty much set based on the current condition and zoning. "Too little, too late" if you try to dress it up for more money in return. You might spend the cost of the rezoning only to have your Buyer smile, say "thanks", and offer the same amount.

This is actually in a small college town and the property is very close to campus. I'm curious about the value of the property. If the house is leveled, is the value of the

You could do a month to month rental agreement. That allows you to give a month's notice for the tenant to move, of course the tenant gets a month's notice to move too. All my rentals are M2M, it works well for me. My tenants actually seem to stay for years.

It sounds like you bought in the upswing of the market OR overpaid for the property when you purchased it. If you have a buyer under contract and they know there is a lease on the property they will either honor the lease or pay the tenant to leave. IF and when the house is in the way of the developments progress. When you sign the sales agreement for the property make sure you address the lease in the contract.

You will owe $20,000 more than the property is worth to pay off your mortgage at closing. You have two options hold the property and continue to rent it or refinance other real estate you own to help pay off the $20,000.

What is your stress level worth to you? Cut your losses or continue to rent it out. Maybe add another unit or two to your property. Check with your county, city or twp permitting office if you can add two units to your property. Consider adding a tiny house or mobile home to the property this may help increase your income to pay down the property faster.