Debbie Hemphill 219-746-4098
I would talk with three Realtors, ask them to provide you with four things:
1. An overall market report (are homes values increasing, declining, etc.)
2. Ask them to provide you with an estimate of the home's current market value as is.
3. Ask them to provide a list of repairs that, in their opinion, would result in the "best price" and the approximate costs of these repairs.
4. An analysis of what the rental value might be after these repairs were made.
Consult your CPA for the tax implications, consider conducting a 1031 tax deferred exchange when you sell this property and buy another.
Besides finding out what the home is currently worth, you might also find out what the zoning is in the other. If you find out it's zoned for other possibilities besides a single-family dwelling -- such as possibility commercial or condo/townhome use, you may be able to market it for other future construction possibilities. Or you may decide to hang on to it if it has other possibilities. That will also give you a better idea what can be done with it in the future, besides just a possible remodel.
I wish you success with whatever decision you make.
You have an asset that is worth something the thing to do is look at your own situation and decide if you need the money now or can you wait till the market there gets better. 35% is a pretty steep discount. I think that anybody would buy it at 65 cents on the dollar but you might be able to do better on the open market if you say ask for 75% of what the property is worth or even 80%.
My stratagy would be to follow the logic I just put out. List it with a local Realtor and state that you are selling it in it's current condition and disclose everything you know or get inspections proir to sale and then offer it at 80% of what the comps show it's value to be. You might get multiple offers.
First, in any case, interview Realtors. Ask their opinions. Get comps. And not just figures on what the house is worth today, in its present condition. But also what the house would be worth fixed up. That's important for you to know, even if you do sell it in as-is condition. So, you'll have a figure from the Realtors.
Second, multiply the after-repair value (ARV) time 0.65. Then subtract estimated repair costs. (The Realtors you talked to may have given you estimated figures. Otherwise, depending on condition, you might be looking at anywhere from $30,000-$60,000. But get estimates, if the Realtors suggest that, or they're not confident in their numbers. So, ARV times 0.65 minus repair costs. The number you come up with there is what many investors will pay for your property. You can find the investors by looking in your newspaper classified ad section, by checking on CraigsList, or looking for "bandit signs" (the "We Buy Houses" signs on telephone poles).
Now you have two numbers: The Realtors' estimates of what you probably could get selling it conventionally, and a figure for what an investor would be willing to offer. One advantage of dealing with an investor is that the investor actually purchases the property, and can do so quickly. However, the number you're offered by an investor may be lower than the Realtor's estimate.
Then you decide which way you want to go.
Hope that helps.