Inherited properties

[James Smith]

Hello community, I have recently inherited two properties with challenges. The first home has no mortgage or lien, but has late property tax of about 1,700. The other home has a mortgage of 18,000 remaining and late property tax of about 2,000. I currently stay in the home that does not have a mortgage and my sister and her family have been living next door in the other home for over 14 years. I have been appointed the executor and I'm also the sole beneficiary of the estate.

I’m hoping I can use the equity in the property that I’m occupying to consolidate my debt and renovate the home to rent. The challenges I’m facing are; the homes are in probate for another four months while my debt has become hard to manage, I’m now worried that my credit score wont be high enough to acquire the loan I need. I also have to make a decision about how to manage the other home that my sister has been occupying rent-free for years. My sister, not paying rent is an issue because I inherited the mortgage debt that she barely pays on monthly. My hopes are to find a solution where I gain financial freedom and my sister can stay in her home.

I understand I have not given great detail, but I can provide more information if someone has a question. I would appreciate feedback and help about this situation. Thank you.

[Jim Blatchley]

@James Smith First, sorry for your loss. This must be a difficult time, so hang in there.

Next, I'm not an expert on probate, so the following is just a place to start. There are some experts on BP, so hopefully they can be more helpful. One that I know is Sharon Vornholt.

Here's a website with some info, http://wills.about.com/od/howtoavoidprobate/a/probatebills.htm . You can do further searches and find more info. What I gather though, is that the estate will have administrative expenses, which include property taxes and they will have to be paid before the estate can exit probate. If you can't afford to pay these expenses, then any remaining assets will be sold in order to pay these off. If there are no other assets other than the homes, then one or both would have to be sold to cover these bills. The fact that there's only $3700 total owed for property taxes, then perhaps there are other assets that can be sold to cover it. There are certainly other options available too. You might be able to partner with a local investor, get a hard money loan to pay the expenses and do the rehab. You could then get a HELOC (Home Equity Line Of Credit) to pay off the hard money loan. If your credit is really bad though, you might need a co-signer for the HELOC. I don't know what your family dynamic is, but your sister probably needs to contribute in some form, if she wants to be able to stay in her current home.

I will stop now and hopefully Sharon or someone else with more knowledge on the subject, can shed more light. Good luck and keep us up to date on your progress.