Bought Two Duplexes & Can't Afford Renovations

[David Leichter]

Hey All,

I am an out of state investor and I bought two duplexes (so 4 units) in Indianapolis using a real estate agent who was (unbeknownst to me at the time) inexperienced, naive and a bit greedy for a sale. I came to find out that the properties both need significantly more work than the agent represented, and I do not have the money to renovate both. I can do the first one, which will cost me about $30K, but not the second one, which will cost me about $80K. These are my options:

1. Sell the second one at a steep discount (like 20% of what I bought it for), and lose my shirt. 

2. Put the second one on the market and keep it there until I (hopefully) get a buyer for close to what I paid for it.

3. Renovate the first one, and just hold the second one for a year or so until I can afford to fix it up. Taxes and Insurance for one year will cost me about $5K.

4. Renovate the first one with the cash I have, and use a line of credit (which I have of $100K) to renovate the second one, then do a cash-out refi on the second one to get some of my cash back.

Any guidance here would be very helpful. Thanks!

[Eric Gerakos]

Between calling the agent, "Greedy for the sale" and saying the agent, "significantly underestimated the repairs" it just sounds like you didn't get your own repair estimates and made common newbie "buying out of state is cheaper and better" mistakes. All agents are "greedy for the sale." Never use an agents repair estimates when considering a purchase.