House and don't know what to do?

Question

I have a property that was willed to me an I don't know what to with it. It needs work and I applied for an equity loan but my credit wasn't good enough also I am behind in taxes. So what could i do I don't want the property to jus set still and I don't want to loose it. Help please!

Rick H. · Answer

Using the Fortunato Formula, "Use what you have to get what you need to get what you want" I'd look at the following:

Find a partner with money and the skills (or sub-contractors) to complete the rehab.

Now, you're going to give up a percentage of equity that your partner is helping you by unlocking. What's the split worth? Don't be greedy since, after all, this property was a gift from a deceased relative in the first place. And don't stay attached to the property, either.

This is a vehicle that will take you to your next investment. Therefore, the rental idea may not be the best. Also, the partner can put his/her money and skills in a different project; yours is not their only option.

Getting a hard money loan will not improve your credit.

Make an informed decision after vetting multiple partner candidates.

Manolo D. · Answer

@Brandon Burrell First thing is first, check with taxes if you can get some sort of a delay, they usually give you more time because you just inherited it, some are pretty lenient and will just require a letter or promise note. Getting a partner is indeed better than that of gaining nothing.

Douglas Snook · Answer

Just a quick thought, don't know if the numbers would work but say you were able to get a hard money loan for $25,000 to do the repairs and pay back taxes (or even pay some of the taxes and try to work out a plan with the town to repay the rest over time going forward). Get it in rentable shape and then rent it it. Then if you went back to the bank or mortgage company to pay off the hard money guy?

Could also look for a partner/investor to say sell half your interest to get the money to fix it up and rent it then same as above, get a more conventional loan to buy to buy out the partner at a higher price? Tell the investor/buyer its only for a year and then its sold back to you

I would hate to see you lose it or sell it at a huge discount because something couldn't be done

Jeff S. · Answer

Total newb here, but I just want to encourage you NOT to feel overwhelmed or paralyzed.  You have a property worth $114k and only owe $10k in taxes? Needs a few upgrades? That means there is a huge pile of equity there that is *yours*.

There are only two things that need to be taken care of:  repairs and financing.  Neither one is that big a deal, really. Just keep in mind that *you* are in the drivers seat and that there is a workable solution out there (here on BP? ) that will be profitable to you.

Brandon Burrell · Answer

it needs a water well to be dug out and could use kitchen and bathroom upgrade. It's worth about $114,000 and 10k of taxes other than its in good codition. I would like to keep and use for a rental but no money but I would consider selling as an last option. Taxes were owed since 2008

Linval T. · Answer

@Brandon Burrell

Sorry for your plight, but, it would be more helpful if you give additional details so that the community can put forward some suggestions.

What kind of work is needed?

How much taxes are owed and since when?

Do you intend to sell it and what do you think it's worth?

Is it occupied now?

House and don't know what to do?

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