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saving a home out of family foreclosure/ how to update

Posted by dixiedoll (My Page) on
Thu, Feb 4, 10 at 10:55

we have been offered the opportunity to get a family home out of foreclosure. We, of course, will have to pay to do this but dh and I are mulling this over with the intentions to flip the home or find someone to rent long term.
Either way we have some cosmetic issues. The home has a pine paneled den and kitchen cabinets are pine paneled. The floors are in need of sanding and there are wood floors throughout sans the kitchen and bathrooms.
The house is 2800 square feet. It needs to be painted throughout, floors sanded, and the bathrooms are the old ceramic tile look. The bathroom counters need to be replaced and tubs reglazed.
The home however has a huge lot, fenced in yard and in a great school district.
My questions are as follows:
1. What would you do to the pine paneling?
2. How do you designate how much to spend on repairs?
3. Do you think this is too big of a list of repairs?
The structure is sound. A new roof was put in over three years ago.
Almost everything is cosmetic.
Do you have any suggestions on how to proceed?
This home was lost in a divorce and we want to try (out of respect) for longtime neighbors to save it from foreclosure. I doubt we will make much...probably just break even but we are considering this very seriously.
thanks for any and all suggestions.
dixie


Follow-Up Postings:

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RE: saving a home out of family foreclosure/ how to update

I would first talk to a realtor and have them walk thru the house with you. Don't hesitate to ask them what they'd charge for their time and expertise.

You need to find out the current value of the home and what sales are doing in your area. My first question would be why didn't the house sell (I'm assuming it was on the market?) A realtor can also tell you what to expect in rental rates and whether the income will cover your mortgage.
Have you had an independent inspector check the home? Otherwise, how do you know the structure is sound?

I'm not understanding your reasoning for buying the property. Are you financially able to take on the debt and the repairs, plus any 'surprises' that may arise during the remodel? From what you've described of the home's condition, my guess is you'll need to also replace most/all appliances and fixtures.
Are you planning on doing the work or using a contractor? If you're hiring it out, bring in a least 2 contractors and get bids.

The repairs you've listed are typical updates. The pine paneling is an easy fix. Either paint it or tear it out and drywall (more expensive!)


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RE: saving a home out of family foreclosure/ how to update

amz,
thanks for the input. this property has never been put up for sale. It is in foreclosure litigation and was my husband's homeplace. We gave it to our son and his wife. They borrowed on it and could not make the payments. Ultimately they divorced. So basically we can afford to pull it out of foreclosure. Not much in our area is selling but hopefully it will improve.
We do know the history of the house and that there is basically nothing wrong other than cosmetic issues.
We are just wondering if tying up our money in a house will best serve our interests..........
thanks for your interests.
dixie


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RE: saving a home out of family foreclosure/ how to update

Depending on the value of real estate in your area and the expected rental income, this could be worth doing financially. The updates and repairs you describe are mostly cosmetic and if you are able to do some of the work, such as the painting yourselves, you can save substantially. A home in a good school district that is freshly painted, with newly sanded floors should be desirable to rent or buy, but it depends on what is happening to real estate in your area. You need to do more research about home values and expected rental income.


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RE: saving a home out of family foreclosure/ how to update

Wonder what the followup to this situation was?
Did you take the house on and make the rennocations?
Sell it or rent it out?


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