Cash Flow Problem on Rehab due to hidden Damage
We just rented a house to sublet for use as a group home. The owner was good enough to advance money and allow us to renovate the house to move-in ready condition. Initial contractor inspection and quote was $11,000 for this 3 Bedroom Bath and 1/2 Home. The house is near 100 years old and a prior owner did a good job covering up foundation problems, termite damage, to include electrical and plumbing problems. As we work toward an end to renovations we keep finding additional hidden damage. We have removed and replaced the roof, replaced all ceiling sheet rock and finished, to include replaced all enterior doors to date. After the owner has invested near $20,000 to date, he has indicated we are on our own. However, we have found another $10,000 is still needed to finish, which we don't have. Thus we are now suggesting to owner that he sell to an investor and contractor that could purchase "as is" and complete the project for the comparable $50,000 market value in the area, the owner has refused to sale and is holding us to our lease. Any idea what our next move should be.?