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Updated about 4 hours ago on .
Duplex with crawlspace, septic, drainage, tree, retention wall related issues sale?
Hi All,
I bought a single family converted duplex 136k from a wholesaler and spent 200k so far as I did not get opportunity to do proper due diligence.
Area is appreciating but lot of challenges with this property like below
1. Bad rain drainage issues which i resolved by building French/trench drain on side and back by spending 10k
2. Rain drainage water used to sit in crawlspace and did crawlspace water proofing for about 10k.
Still see sump pumps in all corners get some water from sub surface not sure where it gets it.
3. Septic field lines failed in backyard and installed new small Elgin septic fields in front yard between drive ways and put a motor and dozing tank to collect from both septic tanks and pump through crawlspace for 30k
4. Upgrade electric both sides for about 30k
5. Upgrade floors kitchens and bathrooms etc 20k
6. Fix roof mold issues like 10k
7. HVAC move to attic to replace package unit and other side replace fan and heater for about 20k
8. redo plumbing work 20k
9. spent 10k to fix sagging floor issues by putting concrete blocks in crawlspace.
There is big neglected strip mall in back as attached with loud noises and some weird smell of tobacco etc. also has big dogs barking at people even if I go to the corner of my backyard lot.
There is one bad neighbor who has big dogs always barking who elevated his backyard and rain water runs naturally towards my side
Big trees other side in neglected waste land which I think belong to strip mall owner behind and city also pushing some rain water in to that waste land.
I am in dilemma now
1. My current PM (say PM_1) does not sell my property as they only do Project management with whom I am there for 5 years now. If I terminate lease with PM_1 for this duplex end up paying commission of one year on one side tenanted unit and 250$ for other side vacant unit.
3. new PM_2 says he can sell my property around 350k even it is under PM_1. Is it good idea to keep property management with PM_1 and sell with PM_2?
4. new PM_2 says since PM_1 did not advertise properly and not taking prospective tenants calls and taking long time to rent now. PM_2 promise he can rent in 21 days for 1350$
5. I am not able to decide selling is good idea to avoid big ticket repairs which puts burden and not sure when I get what repairs on this 1961 crawlspace septic tank duplex with rain water drainage issues etc.
If I can some how absorb all these crazy repair costs and contractor challenges it will definitely appreciate in next day 5-10 years (already new built sfh and townhomes selling in this area around 400k-500k) then I can probably sell as I did most of the hard work already and brought up to good shape compared to what it was when I bought.
Also I see big trees next to unit as seen in the attached photos which concerns me that if they fall on roof (which might be baseless fear). Please advise.
Also behind there is retention wall belonging to the strip mall owner (who does not care for my concerns as per my talk with his property manager few years back) where I built back french/trench drain which is leaning towards my property side which I am concerned may collapse.
6. PM_1 said his other friend broker can list for sale but not himself which i am not sure a good idea.
7. If I move to PM_2 can he list for sale and also same time for rent (which he confirmed yes) ?
If I get 350k or more is it good idea to sell at breakeven price after owning 6 years now ?
or get good tenant for around 1200$ on vacant unit (i reduced rent from 1350 to 1200 as not much interest in current market) and hold few more years absorbing repair costs and contractor issues, trees issues, retention wall issues, tough neighbor issues, loud music, tobacco etc. smell issues, dogs barking issues.
7. So far last 5 years with PM_1 provided overall decent experience but not like excellent or great especially after mergers with big companies.
8. If PM_2 sell this duplex he said he charge 4% .
If PM_2 sell for 350k how much percentage I have to pay in taxes?
If I do 1031 exchange can I save on taxes ?
PM_2 agent says he can take 2% while buying new property in 1031 exchange as buyer agent
Please advise on these confusions
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