Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
General Landlording & Rental Properties
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 7 years ago,

User Stats

2
Posts
0
Votes
Michael Herndon
  • Atlanta, GA
0
Votes |
2
Posts

Mediating Disaster Rental for 96 Year Old Relative outside ATL

Michael Herndon
  • Atlanta, GA
Posted

I've recently been asked to help mitigate a very troubling rental scenario for a 96 year old relative. I've been reading up on real estate and BP for my own future investments, but this is such a cluster that I'd like to verify a couple of things:

Situation: Relative is a single, 96 year old woman with a fully-paid for primary residence, and a few hundred thousand in investments, plus social security and pension. Rental income would be nice--although not necessary--but this property has been a money loser for years.

Property is a 2 or 3 bedroom single family in a rural suburb 1 hour+ of Atlanta on about 2 acres of land; valuation guess is $40k. Property was probably built in the 50's, and has had virtually no maintenance since an overhaul around 1980. Tenets are a couple in their 60's, along with a grandchild, and have been there for about 20+ years. The man is intermittently employed, and they pay the very low rent ($450/ month) sporadically, and often have to pay several months at a time. Rent is always made through money order as earlier checks bounced. As best we can tell, there was never a lease, or it expired about 18 years ago.

Lots of deferred maintenance on the house (e.g., needs new roof, and just found out from the tenant that the electrical heater -- not sure if this is furnace, or space heaters -- haven't worked for a while, so they've been using a gas heater). Also just found out from the relative that they had a limb puncture the original roof "a few days ago" and water leaked into the living room. They have a tarp on it, but haven't had a roofer inspect, etc. The insurance company that insured the house has also said that they're pulling out of this area, and are planning on not renewing the existing policy that expires in November.

Of course, there's no umbrella insurance on the property, and no family member has visited it in at least 15 years.

Thoughts: 

Since the relative doesn't really need the money, she should immediately reduce the liability (e.g., danger of gas heater) by offering the tenants cash for keys, and forgiving past-due rent (they'll never pay, she'll never sue, and she would never collect even if she did)? Tenants should also be asked to stop using gas heater immediately. Any idea what a reasonable timeline and amount would be? I was thinking $300 if out in 30 days). 

If they don't want to accept, should she go forward with an eviction -- again, more so just to reduce her liability than anything else? 

She would consider selling it to them, but they'd likely fall behind on payments, and I can't imagine that they'd be able to do bank financing. So it seems morally questionable to do owner-financing, and then reposes it, and there are still all of the concerns about potential liability on the property?

Should she file a claim with the existing insurance company for the roof (although I imagine that it's unlikely to be paid given the age)? Any chance that they might pay for any water damage that occurred? Any reason not to file a claim? Any suggestion on finding a replacement insurance company (e.g., go with a broker, or just search insurers' websites?)

Only after they're out does it make sense to figure out whether it makes sense to rehab/rent or sell to someone else.

Please let me know what else you need to know. Thanks in advance for your help with this nightmare.

Loading replies...