How to finance uninsured repair? And whether to enhance while repairing?

[Marshall Drum]

Situation: I own an investment property townhome (not primary residence) that I still owe ~$195k on 30 year mortgage at 3.3% rate that originated at $230k back in 2020. The townhome has appreciated in value to about $350k (per Zillow and RedFin) over the few years I’ve owned it, so estimating $150k in equity, about 45:55 self to bank equity ownership.

The townhome now has a leak that has lingered and gotten worse over the few months waiting for an insurance claim decision, ultimately being denied coverage so now I’m stuck with having to cover the entire expense.

I’m also considering selling the property once it is fixed so I can take the funds from this 1 single family property in Houston to apply towards funding a possible multi-family property in Austin, TX.

The quotes to fix are around $15k-$20k, which I’m not excited to just pay out of pocket, nor do I think I really can at this point in time.

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Question: What are some smart financing options to still fix the leak knowing that I’ll probably sell in the near future?

I don't believe a HELOC is applicable since it's not my primary.

Maybe a DSCR (debt service coverage ratio) loan? Might not be right either since the property wont be income generating since the tenant had to move out to get the repair fixed.

Worth it to "fix up" to make more sellable for higher ROI? If I'm already going to be having to fix a lot of the main living area drywall, flooring, and balcony tiling, should I consider options to "enhance" while I'm at it to make the expense more worth it?

I'm leaning towards a cheaper “band aid” solution but the leak still needs to be repaired the right way to make sellable and have it covered in sellers disclosures. Thoughts?

[Melanie P.]

What is the cause of the leak? Are you aware that every day you let water leak in the repairs from damage the water is causing to the property get more expensive?

Address the leak immediately, once the house is water tight get everything dry and then you can approach the cosmetic repairs over time.