Inherited House: Renovate, Sell, or Wholesale?

Question

Our close family friends inherited the father's house, but it needs significant renovations. They are unsure of the scope and cost of the repairs. They would like to keep the property, but we're uncertain if it's financially feasible or the best course of action. What are their options? Should they consider selling as-is, finding a wholesaler, or pursuing renovations? What are the potential pitfalls and benefits of each approach? What is a good first step? Thank you!

David Krulac · Answer

Been to Victorville and Barstow.  That aside, If it were me I'd get a professional estimate of what repairs would cost, and make the decision to keep or sell based on that.  I recently bought an estate property that was vacant for 6 years.  I offered a price based on repair costs and a sale price they could get if they fixed it up (retail).  They decided they wanted the walkaway do nothing price.  The house had the utilities turned off for the 6 years, and was filled with the original 1 owner's furniture, clothes, appliances, car and ecn food in the frig (without elctric on for 6 years).  I took it all, relieving the estate of doing any work. There was a quarter stick of butter in the frig with the papaer still on it, and it looked normal.  A worker asked me if how it tasted.  Told him I have a rule never east anything out of a frig with the electric off for 6 years!

David Krulac · Answer

@Ryan K. By a professional estimate I mean having a contractor bid the work, not just me estimating the jobs.  I expect a free estimate from a contrator who possibly would be doing the actual work.  And I may get multiple bids for the same work, like multiple paint bids, multiple roof bids, multiple flooring bids, etc.

Adam Bartomeo · Answer

There are very few times that anyone should go with a wholesaler. Most wholesalers are not good at what they do, are unlicensed (which is illegal in most states), and lock up the property in a contract with zero risk to the wholesaler. You are better off finding a good agent (this is a difficult task). You will always get more money listing it but sometimes it takes a bit longer wind has a little more red tape. You could also list the property FSBO at a reduced price since there wouldn't be an agent.

Paul Cijunelis · Answer

All of the things you suggest are options to the beneficiaries. Sounds like the house is not local to you, OP. Without having much info, I would need to know the financial situation of the 'close family' to determine a best approach. I would ask...

Are carrying costs a problem moving forward? How long will they have to cover property taxes etc for the decision they make?

For costs, if you're an investor, you can probably do a video walk through to get a ballpark estimate on rehab. Again, see question #1.

Selling as-is means selling it cheap, no hassle, quick sale. Wholesalers drag out the process if you go with a bad one. they are not buying the house. they only want your signature. Renovating usually means you need money to renovate. Do they have spare cash? Do they have good tastes? Are they familiar with what they should do for colors, amenities, etc? If not they could spend money and time and offend buyers if they update the property incorrectly.

There are other options, such as landlording. Contact a local property manager. Can they get it rehabbed for rent for you? Is it near a nice beach for STR? There are so many questions...

Ryan K. · Answer

Thanks for the message an insight. When you say professional quote do you recommend just paying a trusted contractor to do a walkthrough or do you first recommend getting an inspection to figure out what’s fully wrong/needs to get fixed before bringing in a contractor? Thanks again.

Inherited House: Renovate, Sell, or Wholesale?

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