Home Selling in Norwich>Question Details

SWJ87, Home Seller in Norwich, CT

I inherited a House that is in the middle of remodel and I'm not interested in doing the work and can't afford to pay a contractor. What should I do?

Asked by SWJ87, Norwich, CT Tue Jun 24, 2014

I recently inherited a historic 5000sq ft. 4-family rental property that is in the middle of renovation. The house has updated electrical, new furnaces and new hot water heaters, new gutters and the roof was recently repaired and is in good condition. However, much of the first floor requires updating and the second floor has been prepared for remodel (all plaster/lathe removed from walls/ floors pulled up). The house is on about an acre in a decent area but the yard is overgrown and the house really needs to be painted outside. There seems like a million little (and some big) renovations that are needed to get this house up and rented. While I appreciate the gesture, I do not have the time or money to engage in a renovation. The house comes with a mortgage of about $180,000 still to be paid off. It was appraised in the last few years (ripped up and mid remodel) at ~$275,000. Years ago, and with its full rental potential, it was worth over $500,000. What should I do? Can I sell?

Help the community by answering this question:

Answers

6
Your target market for this property would be investors anyway, so I would advise you to sell as is. Yes, you'll probably get a little less money than if the renovations were done, but clearly you don't want the headaches that it would take to get the property ready for rental. I would say to go ahead and pay to have the yard trimmed... overgrown properties can be hiding nasty surprises.

Track down some agents who have sold 2 or more multifamily properties in the last year, they'll be able to advise you on anything else you need to do after seeing the home and doing a CMA.
1 vote Thank Flag Link Tue Jun 24, 2014
You could see if you can take out a loan to make the repairs. You may also have some insurance that will cover some of the necessary repairs. If you do sell it as is, you won't get as much money for it. You could always do some of the repairs and then sell it for a little bit more. http://www.roofandwalldoc.com.au
0 votes Thank Flag Link Thu Jun 4, 2015
you have several options.

1. sell. Find a realtor that specializes in "investment properties" and ask them if the math works. Stress being realistic. If there is a significant amount of money you can make on it (let us say >50K) then have a try at selling. Otherwise you could be in trouble because after carrying costs and realtor expenses and gives backs to the buyer, there may not be much value left for you; which leads us to the other option.

2. don't accept it. Just because it was left to you does not mean you have to take it. You cannot be forced to accept the property. So if it has not gone through probate and thus you are not the real owner yet, you can always say you don't want it. At which point it will go to the state. You would do this if the math was not significantly in your favor (as indicated in #1). This kind of inheritance can cost you money, especially if it puts you over your state's inheritance tax and thus you have to pay taxes to get it.

3. I'd say give it away was another option except a 180K mortgage is far more than any after tax benefit you would get from a tax write-off. So that is not really an option for you.

I caution you to be realistic.

a) the market is bad for anything NOT "move-in ready". High end homes are selling well, everything else is taking a long time. Check the appraisal document and you should find on one of its pages, and inventory level. For example (18 months available inventory). This would mean that there are enough houses on the market that even if no new houses entered the market for sale, given the sell rate in the area, it would take 18 months to sell all houses currently for sale. Find out how many month's inventory there is in your area and then ask yourself if you want to pay taxes, utilities, insurance, principal, interest, etc. for that amount of time.

b) appraised value is misleading you if you think you can get that much for it. This is where investors make their money. Those who stay in business as investors don't get excited about possibilities. They deal with realities.

c) calculate how long you can keep the property without income before you go negative. That will be an eye opener.
0 votes Thank Flag Link Fri Nov 7, 2014
This is good advice. Just because you inherited the home doesn't mean you need to lose money over it. It sounds like the home could be worth a lot, and the new roof and electrical wiring are bonuses. If you have the time and energy to restore it and then sell it, then that could be a good option. Otherwise you'll need to sell it quickly and take what you can get. http://www.chadwickelectric.com
Flag Mon Jun 1, 2015
I agree with the community here on this one. Sell As is and let an investor take this and complete it.

We have a ton of buyers looking for historic properties and would love to help you find a buyer.

--
Elizabeth
Circa Old Houses
http://www.circaoldhouses.com
0 votes Thank Flag Link Sat Jul 5, 2014
Please contact me if you think you can help with my situation. You can email me at saidj2@rpi.edu.

Thanks
Flag Wed Jul 9, 2014
I would definitely consider interviewing several of the top agents in your area to get an idea of market value, and selling potential. With that information you'll be in a much better position to decide if it makes sense to list and sell it.
0 votes Thank Flag Link Tue Jun 24, 2014
Is there a contract in-play with the contractor? You could consult a local Realtor for a comparative market analysis to determine if it is time to list and sell or pursue the renovation project and rent the home.


Regards,
Chad Roberts
Broker/Salesperson
Realty One Group
0 votes Thank Flag Link Tue Jun 24, 2014
No, as far as I can tell, individual plumbers, roofers, electricians and HVAC contractors were used to get the work done. There isn't currently anyone under contract. I can afford to spend a small amount of money (under $30k) for improvements if it will help me to sell, but that won't get the house anywhere near finished.
Flag Tue Jun 24, 2014
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer