Help I'm left with a house!

Help I'm left with a house!

Member since 2023 · 11 posts · 0 votes

In recent years my mother has, as she said it, gifted me her old house, this process was done without me signing anything and I became the owner of this house that I'm responsible for.  Just within the last year I've had to replace bricks on the side of the house that was looking bad and now it's got a possible mold problem. I don't make enough money from my current job to pay someone to fix it and I'm not even sure if it's possible for me to make any money from selling it considering the way my mother transferred it. I'm no specialist but if sell it I'm assuming the cost of selling will be high since I paid nothing for it, I'm not really sure what the rules are on it. I have been listening to the podcast for a while now and every episode refers me back to here for more information, so I was hoping one you experienced guys know if I'm able to come up off this and possible turn it around and use this house to make money some way. My personal thought was to try and get a mortgage and fix it then rent it out to pay off the mortgage, would this be a smart move? Would I be better off trying to sell this and use what I make as a down payment towards a different loan and possibly start my real estate business this way?  So many questions and I'm from a small town so It's not likely I'll find a mentor out here in the country.

0Reply
70 views

Most Popular Reply

Banker · Miami, FL · Member since 2023 · 2 posts · 3 votes
3y

Hi Gregory -

In this case I would say it depends on 1. the equity in the property currently 2. willingness to get the property rent ready. In my experience, you are in a great position since you already own the property. You don't have to go through the hassle acquiring a asset at this time. If I were in your shoes, I would use this property to learn the process of investing. Get a cashout refi and use those funds to get the property ready to be rented. This will give you the opportunity to build a relationship with a General Contractor (If the property requires a lot of work) and also with a lender. Having a good roladex of contacts is key in our space. Get that property rentable and acquire your first tenant. See how the property management side works and see if its for you. I would keep the LTV low on the refi to make sure you keep as much equity in the property has possible since it was inherited. It will give you ease of mind if you ever have a change of heart and decide to want to sell it down the line.

See this reply in the discussion

28 Replies

Jump to latestLatest
  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    A real person who solely owns residential real estate can file a transfer deed into another person's name as either a sale or family transfer @Account Closed the person receiving the property does not sign anything. 

    You get a tax bill. Whose name is on the bill? That should line up with Erie County assessor here https://egov.erie.pa.us/eGovPl...

    Mom had an expert transfer the title to you I guess as a family transfer to avoid paying transfer taxes and you are family. She did this because she was worried about future MEDICAID benefits. Medicaid applicant's home equity interest limit is $636,000 or less. Sounds like the value is nowhere near that high buy maybe she owned other property? She did this to keep the medicaid insurance. It's pretty normal.

    The house has value but it is not good to leave it vacant. People can break in, weather can cause damage, things go wrong and no one will know for a period of time. The house needs to be inhabitable to rent it. Needs solid roof, working bathroom, working kitchen, heat and be safe. I assume it is older. May have lead paint and asbestos, unknown. Fix the leaks that caused the mold- find the source. What do the ceilings look like? Stains, sagging paint, exposed anything indicates the roof has a problem. Does the electric and plumbing operate well? If no they need to be repaired to rent the house and so forth.

    Remove all the valuables and sentimental items ASAP.  Sell anything in decent shape at Glenwood flea market. Secure the house up good. Inform the post office to forward all mail, do an opt out to stop all the junk mail so it doesn't look vacant. number 1-888-5-OPT-OUT (1-888-567-8688). Motion light from hardware store is a good investment or at least keep curtains closed with timer light set inside. Scrub and clean up the house best you can. 

    Call a local realtor who advertises big to give you a verbal estimate over the phone. This number gives you an idea what it's worth. 

    Do you want to manage a rental and learn how to make some side money? This is not easy work. 

    Or do you want to just get the cash from the sale? 

    People online cannot make the decision for you but don't wait around as you have ongoing expenses to pay and work to keep the house going. 

    You will need to know what mom paid for the house originally and a guess as to how much cash she paid fixing it over the years. I can recommend a CPA who can tell you on the phone if you or mom will owe income taxes on the sale. 



  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    3y

    Gift Tax may be required to be filed by your mother.
    You are entitled to 'transfer basis'

  • Member since 2023 · 11 posts · 0 votes
    3y
    Quote from @Caroline Gerardo:

    A real person who solely owns residential real estate can file a transfer deed into another person's name as either a sale or family transfer @Account Closed the person receiving the property does not sign anything. 

    You get a tax bill. Whose name is on the bill? That should line up with Erie County assessor here https://egov.erie.pa.us/eGovPl...

    Mom had an expert transfer the title to you I guess as a family transfer to avoid paying transfer taxes and you are family. She did this because she was worried about future MEDICAID benefits. Medicaid applicant's home equity interest limit is $636,000 or less. Sounds like the value is nowhere near that high buy maybe she owned other property? She did this to keep the medicaid insurance. It's pretty normal.

    The house has value but it is not good to leave it vacant. People can break in, weather can cause damage, things go wrong and no one will know for a period of time. The house needs to be inhabitable to rent it. Needs solid roof, working bathroom, working kitchen, heat and be safe. I assume it is older. May have lead paint and asbestos, unknown. Fix the leaks that caused the mold- find the source. What do the ceilings look like? Stains, sagging paint, exposed anything indicates the roof has a problem. Does the electric and plumbing operate well? If no they need to be repaired to rent the house and so forth.

    Remove all the valuables and sentimental items ASAP.  Sell anything in decent shape at Glenwood flea market. Secure the house up good. Inform the post office to forward all mail, do an opt out to stop all the junk mail so it doesn't look vacant. number 1-888-5-OPT-OUT (1-888-567-8688). Motion light from hardware store is a good investment or at least keep curtains closed with timer light set inside. Scrub and clean up the house best you can. 

    Call a local realtor who advertises big to give you a verbal estimate over the phone. This number gives you an idea what it's worth. 

    Do you want to manage a rental and learn how to make some side money? This is not easy work. 

    Or do you want to just get the cash from the sale? 

    People online cannot make the decision for you but don't wait around as you have ongoing expenses to pay and work to keep the house going. 

    You will need to know what mom paid for the house originally and a guess as to how much cash she paid fixing it over the years. I can recommend a CPA who can tell you on the phone if you or mom will owe income taxes on the sale. 



    I already know I pay the taxes I've been doing it for 2 years now. in the City of Corry

Join the conversationCreate a free account to reply, vote on answers and follow this thread.