UPDATE: Given the rate hikes some of the property values have declined as have the monthly rental rates. Still have not settled on the inherited properties because the market is all over the map and, quite frankly, dealing with siblings who have no knowledge of the RE market is not fun.
First thing I did was have a home inspection. You know... I don't want to insult anyone .... really! However, I think that industry is bunk. I made sure I hired someone that was "certified" to at least 'feel' they would provide more insight than just my views. The report I got back only had check marks that he 'inspected' the area. No commentaries except that the roof "MAY need to be replaced". A blind man could see the roof needs to be replaced! Has needed ti for 7 years!!! My expectation was that I would get a report that said "yes... I inspected that area and found.... nothing/repairs listed/needs update to code/ or something more than a simple checkmark. Please correct me if my expectations are off mark!
Main concern comes with number crunching... Income/Expense/ROI. Given the rent has gone down in these 2 markets, the value has maintained BUT the cost to bring the home property up to date is still high due to inflated construction materials. Need new roof, 2 baths and the kitchen at a bare minimum updated and here that is going to cost $95K. (I really REALLY wish I could do at least some of it myself but I just can't. Well, the tile work and painting but that's like spitting in the ocean trying to create a title wave.) Now... that, in and of itself, is not 'terrible' but add to the financing to buy siblings out, and the lower rent, I'm not even going to break even BUT have a loss! So the ROI doesn't seem to be there on the inherited properties. One would think its a cake-walk. Additionally, have not been able to locate someone to discuss the taxes on inheriting the properties. Don't even know what those may be or when they need to be paid.
Had considered 203K financing but I think that has its own pitfalls because, my understanding, have to use THEIR contractors. How do I know 'their contractors' are going to do the best/proper work and not cut corners?? Govt run policy/process does not necessarily mean it's good.
Plan is to have at least one of these properties to provide additional income during retirement but it doesn't look like I can make that happen unless I flip the house and reinvest the proceeds. THEN taxes will be paid on the net UNLESS.... maybe... 1031 exchange! Maybe get both houses, sell the one that's ready for rent and put THOSE proceeds into the other house.
Your thoughts are more than welcome!!
