Do I sell or do I find a way to finish the job?

Question

I made my first big purchase, all CASH, last year and it has been a huge nightmare every since. From shady contractors gutting more than needed to unforseen cost. (Basement leaking after wall installation).

The plan was to buy, fix the house, move in, pull the equity out and go on to flipping.

11 months later I am sitting at the doors of sell or keep pushing forward and find a way to completion. I am about 85% completed but issues keep coming up (storm knocked the gutters down and seems there is extreme leaking coming from the front foundation)

Starting with 130k cash in the bank to now close to nothing in cash, and having a hard time finding a Carpenter to work behind the shady contractor who staged my house. (He had walls put up while electrical and plumbing wasn't completely installed)

How do I know when is it time to cut my loses and sell or stick it out?

Keep in mind that I am living with family and the idea of another Carpenter walking the property with judgment and the expertise of what they would have done just to give me an outrageous quote to finish or refusal to take the job, causes me major annoyance.

Thanks in advance!

Shera Gregory · Answer

Is your estimate of a $50k loss based on the current market and current condition of the house? These things can change month to month so if you haven't had a realtor look at it yet I would do that to get an up-to-date idea of the potential sales price. Selling on the MLS is likely to get you the most money even if it has to be just to cash buyers due to the condition.

Frank Wong · Answer

Hi Michele,

Sorry to hear about this. My vote is to sell and cut the losses. At this point, you know what the loss will be. If you continue this path to try to salvage it you can end up losing more. We know for certain that it's causing you heartache and that if you try to finish the project it will cost you even more time. Sometimes the best thing is to realize you made a mistake and accept it and move forward.

Kanwar Sodhi · Answer

With so much in already, I recommend you trying to talk to a contractor on HOW you can finish within a time and financial budget. It's important (if there's not TOO much involved or left), to try to finish, pull out the equity and move on. If this a long game, this start won't matter in the long run

Stephanie Medellin · Answer

@Michele Alvelo That is a really tough situation - sorry you're having such a difficult time. If you can make your money back by finishing and selling, I would try to finish to recoup the initial investment. If it's a loss either way, maybe it's better to sell and be done with it.

I think if you are going to move forward and hire someone to finish, you really have to be on-site to manage what's being done (and know what needs to be done to make sure it's completed properly). Pay upon completion and when the inspections are passed.

Michele Alvelo · Answer

Thank you for that information Chris!

Michele Alvelo · Answer

Thanks Matt! I do work FT in HR so I am away from the property. I don't have any tool skills. If I sell I am looking to lose close to 50k. Property is in Chicago.

Chris Mason · Answer

If it's a SFR and you decide to move forward, and I mention this because you posted in the mortgage subforum, your next google search will be "Fannie Mae HomeStyle renovation mortgage."

Matt P. · Answer

@Michele Alvelo Are you working full time somewhere? Sounds like you want to be done with this. Do you have any skills/tools? I'd be there every free second I had working on that sucker to get it done if I was Into it for every cent I had and only 15% away from having it to the finish line. YouTube and the internet has lots of good DIY resources. How much will you lose if you sell out now and where is the property?

Do I sell or do I find a way to finish the job?

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