Urgent advice/suggestions needed.

[Jeremiah Coleman]

Hello All,

What I need help with is a advice/suggestions on what you think I/my family should do with the properties we own. During the recession, my brother was able to purchase 3 properties in California. However, shortly after he was involved in a motorcycle accident and now has severe brain damage. Thus, he can no longer manage the properties and is simply living off of the rent/SSI with no money saved for future renovations. He currently rents them out for below market value to friends/family to guarantee himself a check with the expectation that they wont ask for anything. This can only go on for so long. So here is his situation. 

1st house: Financed for $80k, owes around $65k (my guess, based on 7 years of paying mortgage). House is now Zestimated at $258k. 3 beds, 1.5 baths. Rent zestimate around $1550, but it needs some updating to get to that point. This is the one he lives in, by himself as his wife left him after the accident.

2nd house: Paid cash. 2 bed, 1 bath. Zestimate is $202k but has a medical lien on it for the amount of $73k. Currently rents it for $850 but the zestimate is $1350. Needs serious updating and possibly some foundation work. 

3rd house: Paid cash. 2 bed, 1 bath, in the process of converting garage into 3rd bedroom. Zestimate is $210k, with a rent zestimate of $1350. After his accident, his wife convinced him of putting the house in her name and then left him. She now occupies this house. However, if I can prove to her that the value can be invested in a different market and more money can be made, I believe she would sale.

So, here I am trying to help out, as he is unable to help himself. What would you do in this situation? The zestimate indicates $460k in value minus the $138k he owes on the lien and mortgage for the first 2 houses. So $322k, in a very generous estimation. The 3rd house he is trying to fight for, but doubt he can do anything about. That would add an estimated $210k, so possibly around $500k all together. 

I was thinking of helping him invest in an out of state market such as Cleveland or Indianapolis, get a few turn-key properties, hire a PM, and live off the rent. Should he sale his properties? Get a HELOC on his 1st house and invest it in a different market? I have about $10k saved that I could help him with, but dont know the most efficient way of spending that money. Should he just keep the properties, hope the value continues to appreciate and do the small repairs that family friends/contractors can help him with?  

Obviously by reading this, most of you can probably figure out that I have no idea what the hell im getting into. I am currently in the process of learning, but have my own career to focus on. Any advice/suggestions would be much appreciated. 

Thanks

[Jay Hinrichs]

Do nothing ABSOLUTLY do not sell and buy half way across the country chasing a few % larger returns.. the risk for someone like this with no other income is far to great.

keep what he has and work on boosting the rent.. do not sell .. try to agressivly negotiate the med lien.. many times they will take 10% on the dollar .. especially with someone who cant work.