Newbie and Full Gut Rehab

Newbie and Full Gut Rehab

Real Estate Investor · new york · Member since 2008 · 19 posts · 1 vote

Hey, I need some advice asap! My great great uncle left his 2 story building, which consists of a store front church, and three rental units to members of the church( my family). The building has sat for some twenty years and now the city wants to demolish it. The city told the church that they either have to fix up the buliding or sell it, or they will demolish it.
The buliding needs a full gut rehab, and I am a newbie investor.
Here are the problems:

The lien holder on the house illegally sold the building to another owner, by posing as the reverand of the church. Now, my aunt's lawyer can not find the lien holder and is trying to get the deed back in the church's name. There was no reverand of the church, becuase he died years ago.

The building is in a neighborhood on the edge of urban revitalization, and there is new constrution up, and most of the buildings on the street are being gutted and rehabbed.

My aunt's real estate agent found a buyer who want's to pay my aunt $65,000 for the building and pay off the liens. However, the land itself is worth way more than that, we are taking about NYC! The land itself is worth $200,000.

So, now the entire family is fighting over money, and telling my aunt to take it. But, I asked her how much she wants, and she said atleast $100,000, and I jumped up and down.So, I figured I can pay off the liens of $25,000 and the purchase price with a rehab loan. I am even thinking of moving in and using the HUD 203k program to rehab the building.

How can I remedy this situation?I don't know anything about doing a full gut rehab, because I am a newbie. But, this property fixed up is worth atleast $600,000. I need help asap before they tear this thing down.

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  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    18y

    The title's messed up, so that's likely to require a lawsuit to straighten out. You need to find a knowledgable real estate lawyer and figure out how to do that. That may be quite expensive. The false seller sold it to someone, and that someone thinks they own it, and will fight you on this matter.

    Depending on how long ago that happened, they might even have some claim. Again, you're going to need a lawyer (and money to pay that lawyer.)

    Family's involved, so there are going to be hard feelings no matter how this comes out. At best, someone's going to think they should have received more money. If you buy it from your Aunt for $100K, and they all divide the money (sounds that's what's behind your other relatives telling her to take the $65K), they will be happy (ok, might be) for the moment. But, if you turn around and make a big payday off the deal, they're going to think they're entitled to some of that money, too.

    You say you're a newbie. Do you have good cash reserves and credit that would allow you to actually fight this battle? If you have no experience and no money, then you're certainly not going to be able to pull this off by yourself. Can you find an experienced partner to actually do the deal? Getting a little slice of profit is better than none.

    Jon

  • Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
    18y

    Jon has done a good job of answering the questions posted.

    If the family if fighting over money they do not have yet while they let the building sit for a long time I would consider just walking away.

    If you want to help the family, great. Just do not expect to get a fair deal as family politics will matter way too much. If you do all the work and get a great price for the place will they thank you or continue to fight?

    Why did no one step up years ago and deal with the place?

    BTW - If the dirt is worth a fair bit letting the city demolish it and putting a lien on the land for the work might not be all that bad. It could take time to clear the title so a demo in the mean time might actually help reduce some of the liability issues.

  • Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    18y
    Originally posted by "REI":

    BTW - If the dirt is worth a fair bit letting the city demolish it and putting a lien on the land for the work might not be all that bad. It could take time to clear the title so a demo in the mean time might actually help reduce some of the liability issues.

    Very good point. I've seen more than one gut rehab that cost more than building new. Especiall since you're NYC and since it's a church - I'm assuming the zoning is commercial.....

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