Options for my 20k est. repair costs Indianapolis SFR

4 Replies

Hey BP looking for some wisdom from the more experienced investors out there. I have my 1st turnover on my Indianapolis rental property. It is looking like it will need 20k in repairs/improvements to make rent ready. This is by far way above what I expected.

This was ultimately my fault. I bought this place with inherited tenants about 2.5 years ago and didn’t do quarterly inspections or change my property management company when I had communication issues/slowness with them. Rent was coming in on time so I didn’t bother switching until the turnover this past June. This property is worth 116k on zillow in the 46235 ZIP. Rents are $1000-1150 range.

I've since switched to T & H property management, who have been much better and provided me with a walk through and repair estimates. I'm having a hard time justifying spending this kind of money. It will take a while to recoup. The PITI is $585, rents are around $1000 -1150/month. Below are some of the options I'm considering.

Option A)

Suck it up and pay for it out of pocket. Get a different bid from the property management company? I have the cash but was hoping to buy my primary residence and house hack, not lose a year of savings.

Option B)

Sell the property and be done with it. If I'm able to get 93k. It will cover the remaining note I have on it and my original closing costs (23k).

Option C)
Drive out there and do the menial work yourself while subcontracting out the bigger jobs. I think I can do this for way less than 20k. Plus it will be good to visit the market, meet the property managers etc. I work remote so taking off work is not an issue.

Walk through Inspection: https://drive.google.com/file/...

Flooring estimate: https://drive.google.com/file/...

Contractor estimate: https://drive.google.com/file/...

Thanks for reading BP, have a great weekend!

@Franklyn Roth an option might be to contact your insurance; an adjustor will come outand separate 'wear and tear' and 'damage'. Your deductible will apply, and it might all be normal wear and tear. When was the last time the place was fixed up. Also many PM's will mark up contractor's invoices for money kicked back to the PM. I had a big reno to do on a Duplex and some bills were double the bids. Not a typo! The PM no longer works for us.

@Franklyn Roth

I would not sell the place for sure! You invested 2 years of equity and owe $93K.
If the property was valued at $116 that about $23K in equity so far. 

Here is what I would do. Find out in detail what really needs to get done to rent it back out. 

Get 3 quotes on those specific things that really need to get done and start saving a portion of the rent to work on the 2nd primary workload so you have some capital in reserve. 

Like others have said, I would get multiple bids as well. Even paying contractors $50 each for taking time out to give you a scope of work is a plenty worth while investment and could end up saving you thousands.