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Update 12/16/15
Ended up buying the house for 70K as that's what it appraised for at the time. I was right on the money with the 10K estimate of repairs/upgrades. The renters I had lined up had their Navy orders extended which meant they would be 6-8 months out after I completed all the work. So I decided to put it up for sale on Zillow slightly underpriced. Had 3 offers the first week all over asking. I close on 12/28.
If I waited till Spring/Summer I could have gotten more but I didn't want the house to just sit (carrying costs, risks of vandalism, etc). I also tried to have my current renters switch houses but they didn't want to pay any more than the were currently.
Before taxes and after all expenses I estimate profit of about 35K. Not a huge amount but decent for the 4 months it took to finish it.
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Long story short, my psychotic father is in the process of losing his home that my parents have owned since 1970. He had it made (from sizable inheritance) and lost everything due to some gambling but mostly bad car deals. His house that was fully paid for was used to get a HELOC for 50K which he used to pay some bad debts to Ford (wrote a bad check for a GT500).
He's now in a retirement apartment barely scraping by. He's in a wheelchair and can't do much of anything so the only income coming in is SS and a small pension. So his medical bills and apartment mean he can't pay the heloc and hasn't for about 9 months.
He is not upside down on the house but it does need about 10K in work to make it sellable.
So now I'm trying to figure out what to do. This is my childhood home. My mom ran her salon business there and died there about 14 years ago. Her name is still on the house.
Given that it's in the foreclosure process I don't believe I as a family member can get a loan against it and purchase it (at least not until the loan is brought current). Which means I need to buy it for cash (I believe). I think I can get it for approx 65K but I do not have that laying around. Fixed up I should be able to rent it for about 1200-1250/month.
So I believe my options are:
Cash out refi my main home and use that money + savings to buy the house.
Take out a loan against my 401K + savings to buy the house.
Take out a heloc or personal loan + savings to buy the house.
Ignore everything and walk away.
I would intend on fixing it up and turning it into a rental property. I already have another rental about a mile away.
I have no debt other than current home and rental that are both worth more than I owe. My 2 homes currently are 1/3 of my gross salary. However the rental is occupied and that covers the full payment + about 150/month in income. I also have a room in my current house rented to a friend for $600/month.
My lawyer wants me to just sell it, but like I mentioned it's not really in sellable condition right now.
So fight to save it or walk away?
Update 12/16/15
Ended up buying the house for 70K as that's what it appraised for at the time. I was right on the money with the 10K estimate of repairs/upgrades. The renters I had lined up had their Navy orders extended which meant they would be 6-8 months out after I completed all the work. So I decided to put it up for sale on Zillow slightly underpriced. Had 3 offers the first week all over asking. I close on 12/28.
If I waited till Spring/Summer I could have gotten more but I didn't want the house to just sit (carrying costs, risks of vandalism, etc). I also tried to have my current renters switch houses but they didn't want to pay any more than the were currently.
Before taxes and after all expenses I estimate profit of about 35K. Not a huge amount but decent for the 4 months it took to finish it.
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Long story short, my psychotic father is in the process of losing his home that my parents have owned since 1970. He had it made (from sizable inheritance) and lost everything due to some gambling but mostly bad car deals. His house that was fully paid for was used to get a HELOC for 50K which he used to pay some bad debts to Ford (wrote a bad check for a GT500).
He's now in a retirement apartment barely scraping by. He's in a wheelchair and can't do much of anything so the only income coming in is SS and a small pension. So his medical bills and apartment mean he can't pay the heloc and hasn't for about 9 months.
He is not upside down on the house but it does need about 10K in work to make it sellable.
So now I'm trying to figure out what to do. This is my childhood home. My mom ran her salon business there and died there about 14 years ago. Her name is still on the house.
Given that it's in the foreclosure process I don't believe I as a family member can get a loan against it and purchase it (at least not until the loan is brought current). Which means I need to buy it for cash (I believe). I think I can get it for approx 65K but I do not have that laying around. Fixed up I should be able to rent it for about 1200-1250/month.
So I believe my options are:
Cash out refi my main home and use that money + savings to buy the house.
Take out a loan against my 401K + savings to buy the house.
Take out a heloc or personal loan + savings to buy the house.
Ignore everything and walk away.
I would intend on fixing it up and turning it into a rental property. I already have another rental about a mile away.
I have no debt other than current home and rental that are both worth more than I owe. My 2 homes currently are 1/3 of my gross salary. However the rental is occupied and that covers the full payment + about 150/month in income. I also have a room in my current house rented to a friend for $600/month.
My lawyer wants me to just sell it, but like I mentioned it's not really in sellable condition right now.
So fight to save it or walk away?
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