After a few excellent BRRRRs in Boulder County, CO in the past few years I think I finally have a bit of a dud. Not the property itself but rather the circumstances. I would greatly appreciate anyones input as I am flying solo here and trying not to take too great of a loss.

Plan: BRRRR via SFH to up/down Duplex

Orig. Timeline: 6 months

Orig. lending: Traditional Primary Residence mortgage w/ 20% down which came from an $89,0000 HELOC with variable rate (9% currently) on my other home

Additional debts: $55,0000 private loan from family member, $22,0000 on credit cards

Anticipated additional cost to complete the duplex conversion: $50,0000 in materials and labor, additional city requirements, and the actual permit

Challenges:

1. Permit: City permit office lost most of their staff and our application was given to someone else 6 months ago after we had nearly satisfied all the final requirements and the new staff member is requiring a whole new laundry list of requirements ($) and delays in issuing permits across the city because of staffing issues

2. Additional costs: I have run out of money. The lump of cash I had on hand has been spent on the project and the carrying costs have now consumed nearly all of my personal income and real estate portfolio income cashflow

3. Time: Based on progress this far, the time I have available for the project, and delays with the city, I anticipate another 8-12 months

4. Although only my name is on the property and its mortgage, the project was started with my ex-fiance who was supposed to do the construction (thats his primary occupation) while I paid most of the costs. He has not kept up his end of the bargain for the past 15months and I am not confident he will for the remainder of the project. I do not have the money to pay someone else to finish the project and due to my job, I cannot commit to more than 1-2 days a week on the project. Its also not pleasant to interact with my ex and I would rather end this project as its the last thing keeping us interacting with each other.

5. The $55k from family member-they want it back with interest by the end of this year (in 3 months) ***this is a big one

6. The market..... I doubt mortgage rates are going to be lower or property values significantly higher anytime in the near future

So, the way I see it after running numbers the past two days, these are the options:

1. Finish the duplex conversion: No. Don't have the time, the money, the will to interact with my ex that much, or the risk appetite. Family member will not get their money back for at least another year which is unacceptable.

2. Finish it as a SFH and cash-out re-fi: I hold onto the asset for future equity and cashflow gains. I can payback family member their loan, pay off my credit card, but NOT be able to payoff my $89k HELOC since I will need to leave 20% in the property. It will break even monthly in year 1, likely start cashflowing in year 2+ by renting as a large SFH. Could always convert to duplex later when conditions are right. Family member gets their money back by the end of the year.

3. Finish it as a SFH and SELL: I already have the materials purchased to finish it as a SFH. Could get it done within 3 more months. Would have enough money to pay off all debts including my $89k HELOC or at least half of it (Sale price/market condition dependent) Family member gets their money back by the end of the year.

4. Sell as-is to an investor: I dont have to do any more labor or spend any more money. I'll get the least amount of money for it out of all the options. At best, it might pay 30% of my $89k HELOC in addition to paying off all other debts. Family member gets their money back by the end of the year. Fast. I actually had someone contact me yesterday and we did an initial walk through of the property. He's doing a 1031 exchange. We meet again next week to discuss details and potential offer.

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Number 3 would be ideal if I can sell it for enough to pay off the majority or all of my HELOC. I could break even on this whole situation and walk away.

Followed by #2 because I would retain the asset and it will cash flow soon, but I'll end up leaving that $89k in it for a long time since I used the cash-out refi to pay off other debts rather than roll my HELOC money forward to the next property.

Followed by #4 because I would get out of this whole situation fast but at the risk of having up to an $89k HELOC with nothing to show for it.

Of note, I do have another property with $160k of accessible equity in it. I cannot access it easily because I co own it with my ex who refused to cosign a loan to access the equity, I do not qualify for any additional personal mortgages such as a HELOC, and the rate is around 3.75% so I dont want to refinance the entire property at the current rates.

Overall my portfolio comes out in the positive even if I take an $89k loss on this HELOC for the curent property. It will also free up my personal income cashflow and rental cashflow again so I can start saving. I usually save up $60,0000 a year which I have been spending on REI projects the past few years. I could keep doing that or could pay off my HELOC within 1.5 years with that money. I have options basically.

So....any thoughts? I certainly am taking in as many lessons as I can from this project especially since its probably going to cost me a pretty penny for them.

Denver, Colorado

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