Inherited house financing plan of attack

6 Replies

Hello, My family has recently inherited a West Texas home from a relative who passed and it's currently sitting empty and I'm looking to get some advice on the best possible way to go about funding the deal. The house is in rough shape and it's in a rural Texas town. Its a 2 bed 2 Bath about 975 square feet. Right now I have the property worth estimated 35k-40k and a very very rough repair estimate of 20k. The house is right next to the new school in town that houses k-5th grades so I’m thinking it shouldn’t be a tough sell and would have an ARV of about 80k if it’s done right. I initially thought of renting it out but I think we would like to just get the cash out to pay off student loans or fund more deals. So, I’m having trouble deciding the best way to fund the rehab. I’ve thought of HELOCs, hard money, personal loans and even funding the rehab myself as I do have the cash on hand to finish it if it’s in the 20k range. So my question is, how would you go about funding this rehab if you were in the same situation? This would be my first rehab and I plan on getting hands on with it in order to learn more about the process and to get better ideas about rehab costs and whatnot. Any advice is appreciated!

@Austin Suddreth how far away is this house from where you live? If it’s far away, I would sell as is to an investor, and take the cash and walk away.

If you haven’t done a rehab before, you could easily lose money. Assuming the numbers you’ve posted are correct, you could sell as is for 40k.

If you rehab it, you’re going to have 20k into it and sell for 80k. After closing costs you are left with let’s say 75k. So you is the 15k upside worth your risk?

20k rehab isn’t a lot and if it’s far away you could easily go over budget and lose money, or make no more than you started with.

Just some things to consider

It’s about 5.5 hours away from me personally. However my parents live in the same small town it’s located in. I haven’t tried to convince my parents to sell it yet and you’re right it may be easier just to sell it as is for the rough 40k profit. However there aren’t many investors in the area or people that would be willing to buy a house in that shape. It couldn’t hurt to see what offers I for it I suppose.

Thanks for the idea

Is it close to Abilene?

It seems like you have been holding on to this for a while as you asked the same questions 7 months ago. I am somewhat familiar with Ozona as I have done some deals in Sonora and Eldorado.  I would seriously explore selling it as-is especially being 5-6 hours away, lacking experience and not having contractor contacts in the area

Feel free to reach out as I do have an agent contact and possibly a contractor that I can share with you

Yea it’s really my moms and she doesn’t want to deal with renters really. She’s about to just sign it over to me and let me have at it and just split the profits. I recently looked up the tax assessment and it’s only listed as 12k. I know that’s not the true market value but we would definitely want a bigger return than that if we sold it. I would love a contractor connection if possible, at minimum to get a rough idea of repair costs for a flip.

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