I want to help my mom get the most for her house

Rehabbing & House Flipping
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I want to help my mom get the most for her house

Randon B.
Appraiser · Austin, TX · Member since 2014 · 162 posts · 19 votes

Hey guys I apologize if there is an obvious answer for this in advance...But I'm not aware of it so here I am ha!

This is my mom's personal residence. She has lived in this house since 1999 when she bought it for 45k.  The loan has since been paid down to 33k on a 8.25% 30 yr mortgage.

This house is located in Odessa Tx, and since the new oil boom the housing prices have gone up in the area. She is thinking about selling the house while prices are up, but it would be beneficial to do some work on the house to get it up to standard. Which I am estimating conservatively to be about 15-20K . Recently sold houses in the area have gone anywhere from 90-130K.  The tax assessment value of her house now is about 86k.

Now here lies the problem,  being a single mother throughout the 90's and racking up school loans and credit card debt, she doesn't have the greatest credit score and has been denied a refinance in the past.. which is what would be the best scenario right?

Is there anything that I could do? I've read about 203k loans, since she would be occupying the house for a while at least. Would I need to buy the house and have it in my name? Is that even allowable? 

What would you guys do?

Again I apologize if this question is below everyone's heads, I'm just trying to figure out ways to help her since she has done so much for me.

Thank you guys

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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y

What needs to be done to the house?  $20K of work is a LOT for a $100K house.  That's a new kitchen and bath, flooring throughout, and paint in and out.  Is it really that bad?  Have you gone with an agent and looked at the competition?  If she's living it in right now I would guess its really not all that bad.  Some sprucing up with some paint, along with a very thorough dejunking and cleaning might be all that's needed to get a sale.

Even if some major improvments would draw a higher sales price the cost of those improvements can easily exceed the added value.  You do not want to do anything that falls into that category, even if it would draw a higher price.

Have three agents come and look at the house and give you their assessment of the selling price and suggestions for what you should fix.  You may be pleasantly surprised at how little you really need to invest.

Selling to a retail buyer on the MLS is almost always the best way to get the maximum price. Get it spruced up, cleaned up, dejunked and priced right and you will sell quickly.

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  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    12y

    Put what you can afford to put into the house in repairs and list it with the realty company that puts the most money into advertising 

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  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    12y

    You could buy the house with the 203K FHA loan, but it would be in your name and you would have to live there for a year at least. You could try to buy it and finance it with a local bank, many will finance the repairs too (75% that is). That would give you more flexibility, but you would have to pay all of the loan costs before even getting into the rehab.

    It might be worth testing the market as is. If the comps are in the $100,000 range, there are going to be people out there willing to put money into the house. Yes, you'll have to take a discount, but it may be better to do it that way. And of course, if you get no action on the house at a price you think is worth it, you can always pull it off and re-evaluate.

    Podcast Guest on Show #121
    1Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    12y

    What needs to be done to the house?  $20K of work is a LOT for a $100K house.  That's a new kitchen and bath, flooring throughout, and paint in and out.  Is it really that bad?  Have you gone with an agent and looked at the competition?  If she's living it in right now I would guess its really not all that bad.  Some sprucing up with some paint, along with a very thorough dejunking and cleaning might be all that's needed to get a sale.

    Even if some major improvments would draw a higher sales price the cost of those improvements can easily exceed the added value.  You do not want to do anything that falls into that category, even if it would draw a higher price.

    Have three agents come and look at the house and give you their assessment of the selling price and suggestions for what you should fix.  You may be pleasantly surprised at how little you really need to invest.

    Selling to a retail buyer on the MLS is almost always the best way to get the maximum price. Get it spruced up, cleaned up, dejunked and priced right and you will sell quickly.

    4Reply
  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    I agree with the above! Paying fees to refinance just so you can turn around and sell the house will hardly ever be cost effective. The best way to help her is probably to put in a little sweat equity doing some repainting, etc. Make it show better, but don't pay out big bucks that you won't see enough return on. Talk to several realtors, and explain your situation, but realize that not all of them are 'practical' people. Some will tell you you need a new kitchen because "everyone wants granite these days!!" Ignore those guys, find a realtor who is practical and realistic. I'd bet there are improvements that you could for 1-2k (or less) that will make it nice. Post pics if you want, folks on BP love to give suggestions...

    0Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    I totally agree with @Jon Holdman . We cosmetically gutted the interior of our house for 12k including installing a new garage door, etc. Are you handy?

    Here are some "cheap" look nice tips that we figured out

    Kitchen

    * if you paint the cabinets using the kit, its $80ish dollars and transforms the kitchen

    When shopping for fictures and cabinets use the loss leaders. They look just as nice and are cheap too :)

    1Reply
  • Randon B.
    OP
    Appraiser · Austin, TX · Member since 2014 · 162 posts · 19 votes
    12y

    Great insight guys thank you so much. 

    You're really right I guess, as it may not need as much as I'm thinking, New paint, and floors.. the main thing I'm worried about is carport, it leaks and has wood rot, it definitely needs replaced. The original owners had converted the garage into and extra bedroom and made that carport instead.

    I need to find out what the deductible is on her insurance.

    0Reply
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