woolie Posted May 3, 2012 Share Posted May 3, 2012 Well, my wife has just inherited a small house in SE Houston (50%, with another family member the remaining 50%.) Time to decide what to do... It does need significant work. The flooring is mostly old carpet that will need to be replaced. Almost all the walls have 80s wallpaper that needs to come down. The rear deck needs to be torn out. It has central A/C, but no one is really sure the current state of the system. It probably needs some roof repair, and I am just going to pretend that it does not need foundation repairs. Neither of us really has the time available to sink alot of DIY effort into these projects. A realistic sales price would be in the low 50s; HCAD has it at about 68k (down from 83k in 2008 ). However, the rental market for houses in this area seems to be OK... similar houses are asking 900-1000/mo. So, I need to start working through the situation. On one hand, it might be wise to sell the house and not have to worry about crappy tenants trashing it, not paying rent, the inevitable large repairs that will be necessary, etc. But if I lease it, we'd make a little each month and might be able to sell it for more in the future when the market is stronger. My parents have had rental properties before, so I've heard some real horror stories. It will certainly take a high tolerance for BS and an appetite for risk. Anyway, I'll keep this thread open for my "thinking out loud." Alternatively I could sell my current house in midtown, move out here, and save $$$ every month Link to comment Share on other sites More sharing options...
TheNiche Posted May 3, 2012 Share Posted May 3, 2012 A partnership between family members is usually a bad idea. It can become an especially bad idea if something that should be a passive investment actually turns out to require active participation and an infusion of fresh capital. Either get it appraised and have one party buy the other one out, or put it on the market for sale. If you're going to stick with it, then put it into an LLC and get yourselves a good operating agreement drawn up to figure out all the angles. (Actually go and hire a real estate attorney; don't just modify a template you found on the internet.) Link to comment Share on other sites More sharing options...
woolie Posted May 3, 2012 Author Share Posted May 3, 2012 Yeah, [insert long discussion about that particular family member.] I could buy her out, but then my passive investment would become somewhat more active. It just gives me a sad to have to sell it at a very low point in the market. Although in the end it might take 10k in improvements and 2-3 years of waiting just to make another 10-20k at sale.One of the neighbors has expressed an interest before; they have a large extended family and naturally want them all nearby. Maybe that will work out, and avoid the cost of selling it on the MLS. Link to comment Share on other sites More sharing options...
TheNiche Posted May 3, 2012 Share Posted May 3, 2012 Those numbers (if realistic) aren't very encouraging. I would cash out and make it somebody else's problem. Even if you leave a little money on the table -- you'll never go broke making a profit. Link to comment Share on other sites More sharing options...
Highway6 Posted May 3, 2012 Share Posted May 3, 2012 I would hate myself for a long time if 20 yrs from now, a property i was gifted and parted with for pennies appreciated 300% and i lost out on a quarter-million profit.Is this in the east-end and not in one of the few really shoddy neighborhoods ? Don't know if it will ever see Heights or even Rice military or Woodland Heights land prices... but maybe just raze the structure, pay property taxes for a decade, and wait till it triples in price.Niche... how long till East end half-acre lots are worth $300,000? 10 yrs? 20 yrs ? Link to comment Share on other sites More sharing options...
woolie Posted May 3, 2012 Author Share Posted May 3, 2012 I would hate myself for a long time if 20 yrs from now, a property i was gifted and parted with for pennies appreciated 300% and i lost out on a quarter-million profit.Is this in the east-end and not in one of the few really shoddy neighborhoods ? Don't know if it will ever see Heights or even Rice military or Woodland Heights land prices... but maybe just raze the structure, pay property taxes for a decade, and wait till it triples in price.Niche... how long till East end half-acre lots are worth $300,000? 10 yrs? 20 yrs ?No, it's not in a prime neighborhood, or close enough to downtown to experience gentrification anytime soon. If it was in the East End I would probably already be loading my furniture into a U-Haul.It's about 3 miles outside 610, near the border with Pasadena; most of the nearby listings are 50-70k. On HCAD, the lot value is 20k. Link to comment Share on other sites More sharing options...
TheNiche Posted May 4, 2012 Share Posted May 4, 2012 I actually really like a lot of the neighborhoods over in that direction, especially for the price.But...this is the kind of play that only makes sense if you're building a portfolio of rent houses that can be managed at economies of scale. For you, just say no! Link to comment Share on other sites More sharing options...
woolie Posted May 4, 2012 Author Share Posted May 4, 2012 Haha, while the idea of being a real estate tycoon (read: slumlord) has alot of excitement and appeal... not sure I have the brass to have someone forcibly evicted. Maybe in another life Link to comment Share on other sites More sharing options...
sevfiv Posted May 7, 2012 Share Posted May 7, 2012 Ha - sounds like my neighborhood! HCAD has been dropping values like crazy and investors have been scooping up foreclosures and more than likely making a nice profit - if you can cheaply tidy it up you might be able to get a better sale if you have a little time and cash.What neighborhood is it? Is it in South Houston? Link to comment Share on other sites More sharing options...
Pleak Posted May 7, 2012 Share Posted May 7, 2012 Yeah, [insert long discussion about that particular family member.] I could buy her out, but then my passive investment would become somewhat more active. It just gives me a sad to have to sell it at a very low point in the market. Although in the end it might take 10k in improvements and 2-3 years of waiting just to make another 10-20k at sale.One of the neighbors has expressed an interest before; they have a large extended family and naturally want them all nearby. Maybe that will work out, and avoid the cost of selling it on the MLS.Yeah - it would make your passive investment active. But on the other hand, if it truly is a low point in the market, what better time to buy out the other half? And begin your second career as Houston's Donald Trump? Link to comment Share on other sites More sharing options...
woolie Posted May 7, 2012 Author Share Posted May 7, 2012 ... Link to comment Share on other sites More sharing options...
woolie Posted May 7, 2012 Author Share Posted May 7, 2012 Adventures in owning houses. Always expect the worst to happen. I'll share the details at a later date. Link to comment Share on other sites More sharing options...
woolie Posted June 2, 2012 Author Share Posted June 2, 2012 Update:I am looking for a realtor, preferably as flat fee or discount broker. I will provide all photos, descriptive text, etc. I do need someone to list it in the MLS and handle offers. List price will probably be in the mid or high 50s. Interested buyers will be looking for a fixer upper or redevelopment.Feel free to contact me through a message here. Link to comment Share on other sites More sharing options...
samagon Posted June 8, 2012 Share Posted June 8, 2012 so no slumlord millionaire for you. Link to comment Share on other sites More sharing options...
woolie Posted February 1, 2013 Author Share Posted February 1, 2013 ... Link to comment Share on other sites More sharing options...
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