Selling as is

[Steve Crisp]

My childhood home has been sitting for 5 years. Needs a roof, electrical, HVAC, new kitchen, walls and fireplace, and has a collapsing back patio. I thought about fixing it up myself and keeping it in the family but Im out of state and have no one to trust to follow up with Project Managers. I decided to sell for $50k but keep getting offers from $20-35k. I'm not disparate so I have declined those offers. Is there a strategy for selling AS IS?  Is there something I can do to walk away with a decent amount of cash or should I just off load it as fast as I can? 

Yesterday I thought about getting the roof inspected. Think it might be smart to get my own estimate on repairs. If I can restore it for $20-35k, then I can rent it out myself. Wanted to take these thoughts out of my head and toss it to the Universe and see what comes back. 

[Randall Alan]

@Steve crisp

@Steve Crisp

I think the first question is: What is is worth fixed up?  You say you decided to sell it for $50,000.  Where did you get that number.  Hardly anything is worth $50,000 today, even in horrible condition.  Just the land is probably worth $25,000.  So there's that.  You don't tell us how many square feet it is or anything to get a basis on, but I would do a quick lookup on Zillow... turn on "Sold homes" and look and see what things are selling for per square foot around your house, and then you will start to have a number that means something to you.  Around where I'm at, properties that are COMPLETELY TRASHED OUT are being listed for $100/sqft... and the same house fixed up will sell for $200/sqft, if not more.  So if my area was your area, you would say to yourself, "There's a $100,000 more in the deal if it is fixed up.  The next question is, "What would it cost to fix up?"  It's all simple math really... if the fixes are $50,000, and you could sell it for $200,000 instead of $100,000, isn't it worth the fixes to make the extra $50,000?  And the opposite is true as well.. if you would be upside down fixing it up, sell it as is.

You can DEFINITELY list a property right on Zillow or the MLS in crappy condition. Last week I saw a fire gutted listing in our area for $80,000. Whole place got smoked, hole in the roof, car port damaged, etc. Was pending in 2 days, and they raised the price 3 times on MLS because of excess interest (I guess) to $95,000. A realtor could be a real asset for you here... could get you valuations, offer professional opinions. Would probably be worth it.

There is definitely something to be said for passive income though.  If you could rent it and make $500/month because you already own it (after repair loan, and all the property expenses), I would seriously consider that if you are into rentals.  We have 37 doors, and find it really pretty easy on a day to day basis to self-manage those.  One would be a snap... would be an extra $6,000 every year using that $500 figure.  In 10 years, the property will probably be worth double, and you will have made $60,000 in rent in that time and still own the asset.

Hope it helps!

Randy