Out of state property

[Steve Crisp]

Father passed away. Mom is relocating to another state and moving out of the family home. Home is in St. Louis and currently has a mortgage loan of $17grand remaining and is worth $42 grand according to Zillow but has lots of needed repairs (electrical, heating/cooling, kitchen, bathroom, roof, and deck) I'm guessing another $20 grand at least in repairs/upgrade. I'm located in Virginia and the out of state issue is also a problem. Its a 13 hour drive and $400-600 plane ticket depending on the date. Thinking I should advise her to sell it or let it go into foreclosure. Concerned about taking on this project so far away with so much work to be done and think letting it go into foreclosure is the best decision to make but cant seem to make a decision and since I just joined this site, I was wondering what would a more experience BiggerPocket member do. Any feedback?

Steve

[Sam Alomari]

Hi @Steve Crisp

Don't let it go for foreclosure! You have many options. 

1- List it with an agent for $25k

2- Sell it with a wholesaler

3- If you have the money, you probably need $10k to get it rent ready, then have a property management company manage it as a rental

4- You can offer rent to own after making minor rehab (what I call lipstick on a pig rehab)

5- You can sell it as subject to existing financing and collect a down payment. Someone will pay you a small down payment and make monthly payment to the mortgage

6- My favorite! Sell it with seller financing! You will find someone to pay you $30k for a seller financing deal, and you can charge interest! I've done this before. You can request $2000 - $5000 down and offer seller financing for 5 years with 8% interest. Then you can take that down payment and apply it to your Mom's mortgage balance.

I'm editing my comment because I just got another idea for you :)

7- Partner with a flipper. Yes the profit margin is small for a flipper if they have to buy and close on the property. Find a flipper to partner with you, you have the equity and they put the $20k rehab cost. Then you both will sell it for the market value (let's say $50k) and you both split 50% each ($25k minus 50% of closing cost). You will pay the $17k and walk with some cash in your pocket. A flipper won't mind $20,000 profit on $20,000 investment! That's 100% ROI!