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Inherited property in rough shape-- WWYD?


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Our best friends (they live out-of-state) just inherited a relative's house in the Houston area. They accepted it sight unseen, based on fond childhood memories of the place, thinking that they could just immediately sell it.

Of course, things have changed since childhood times. The house is in an area that's becoming increasingly sketchy in recent years. What homes are selling there are going for under $100K, most between about $65-$85K, and there are a handful of foreclosures in the subdivision as well.

We went to check it out on their behalf and the place has some serious issues! Visibly cracked foundation, mold in a closet (moisture source has been eliminated, mold has not), evidence of previous termite damage (doesn't appear to be anything recent), it needs some minor-moderate plumbing work, probably new a/c and furnace, a good bit of siding and trim board replacement, garage door replacement, etc.

Inside, it looks as though nothing but the appliances have ever been updated in the house's 35 years, so while most things are functional, it could certainly do with paint; new cabinets and counter tops, new flooring coverings, windows, etc.

On the upside, it does have a new roof; all new fences and gates; a new back patio cover; new exterior doors; recent, working appliances; and decent front yard landscaping.

Of course, due to the house's age and/or the neighborhood, I'm not sure that doing the repairs would be profitable enough to really be worth anyone's time. I'm guesstimating around $50k at least for repairs and maybe some basic upgrades. Our friends don't have the cash to do that kind of thing (they can't even afford to fly out here right now, due to a job loss), nor can so many repairs and such be managed successfully from afar anyway.

There is no mortgage on the property. It is not in a flood plane. It does back to a major thoroughfare, so the backyard is very loud and generally looks and feels quite unappealing. It looks like they may have lost all of their trees to Ike. It has 4 bedrooms, 2 baths, 2 car garage and is about 2,000 sq. ft. There is an active, and we're told, notoriously wicked HOA.

How would you suggest our friends best proceed? What are their realistic options?

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Edited by GettaClue
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We went to check it out on their behalf and the place has some serious issues! Visibly cracked foundation, mold in a closet (moisture source has been eliminated, mold has not), evidence of previous termite damage (doesn't appear to be anything recent), it needs some minor-moderate plumbing work, probably new a/c and furnace, a good bit of siding and trim board replacement, garage door replacement, etc.

while the foundation may be a big issue, from the description it's impossible to tell the specifics. for way less than 50k i'm sure lots of things can be done to make a difference.

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while the foundation may be a big issue, from the description it's impossible to tell the specifics. for way less than 50k i'm sure lots of things can be done to make a difference.

ya but depending where it is, it may not be worth 50k in this market

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let some crackheads move in and get what you can in rent, then maybe in 10yrs or so it may be worth something. Just my moronic opinion

Get some repair estimates - (1) amount to make it sellable (things such as foundation repair) and (2) to increase value (paint, cabinets, etc).

Get a realtor in the area to estimate a sale value. Research the value on HCAD/MCAD/FBCAD. Ask the realtor for three values - as-is, after doing (1) repairs, and after doing (2) repairs.

That's a good starting point - what you'll have to spend and what you'll expect to get.

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