Opinions wanted. Hoarder House... Flip, Wholesale or Hold?

[Jake West]

Purchase price $52,000

Square Feet 1460

Year built 1978

Comps in the area sell between $105,000 (All original) - $145,000 (Completely remodeled

My mother in law recently retired and is in a bad situation. She owes about $47,000 on a house in my local market, Lubbock, TX.

She and her partner are hoarders. On a scale from 1-10 they are definitely a 10.

They recently moved in with their oldest daughter when the pandemic hit and because the house is no longer livable. My wife and I are considering stepping in to help them as well as help our own family. We have had estimates to clean and sanitize for up to $10,000. Once the clean up is complete we will analyze how much repair is needed. We estimate repairs to range from $35,000-$60,000.

The company who gave us estimates to clean, made an offer on the house of $30,000 and say a remodel would cost up to $80,000.

I am curious what you would do and why.

Options:

1.   Clean up the mess and find an investor? Asking price $70k-$78k. Pay mother in law $5k above what is owed. Minus expenses I estimate about $6k-$12k profit
2.   Flip it – Maybe a $10k-$30 profit
3.   Keep it and rent it – Rents for $1,100-$1,200 – House payment of $890-$960

Things to consider:

All renovation money will come from private funding (this would be my first short term flip). I would not be willing to pay a hard money lender considering my inexperience. I am interested in long term and we currently have plans to sell our home in 1-2 years. We have about $150,000 in equity and the plan is to build a 4 plex with our FHA loan. We would live in it for about a year while we build our permanent home.

I am sure there is more pertinent information needed and I’d be happy to elaborate on the details.

So….What would you do and why?