Tony D'Amato
It's all about the inches
I have questions.
Who here is a real estate expert?
- Thread starter Tony D'Amato
- Start date
What aspect of real estate.
Althalucian
All Star
I know a bit. What are you curious about?
Building? Buying multifamilies? Legal stuff?
Building? Buying multifamilies? Legal stuff?
Tony D'Amato
It's all about the inches
Mainly general advice about debt, but also some legal.
So I have an elderly relative, she has a home. But she has a lot of debt. For 1, she owes like 200k for the home. Then 70k for a 2nd mortgage. Also about 7-8k in back taxes. The house is probably only worth like 75-100k. But its on a bit of property in southern cali. So if u fixed shyt up, the value would definitely increase. But w/ all that debt, is it even worth getting her to sign the house over to a relative to keep it in the fam?
So I have an elderly relative, she has a home. But she has a lot of debt. For 1, she owes like 200k for the home. Then 70k for a 2nd mortgage. Also about 7-8k in back taxes. The house is probably only worth like 75-100k. But its on a bit of property in southern cali. So if u fixed shyt up, the value would definitely increase. But w/ all that debt, is it even worth getting her to sign the house over to a relative to keep it in the fam?
Do you know if the land is worth anything? Is it in a up and coming area?
Tony D'Amato
It's all about the inches
Houses in the area sell for 300k and up. Depending on upkeep.
In a perfect world, they would tear it down, and build a duplex or put 3, maybe 4 units for living on the property. But the debt tho. And more loans would be required. May be cheaper just to buy elsewhere and build rental properties, right?
GnauzBookOfRhymes
Superstar
First you need to find out the actual value of the land. Any realtor who works in that area should be able to get that number for you. That will inform the next step. Also make sure to understand the yac sale rules in the county. Depending on how far back those unpaid taxes go, the unpaid tax obligations can be sold to real estate investors. If your grandmother doesn't pay the taxes within a certain period of time, the holder of those obligations can try to essentially take the property from her.
Tony D'Amato
It's all about the inches
Now those were income taxes, not property taxes. They can still do that?
Tony D'Amato
It's all about the inches
U still around breh
GnauzBookOfRhymes
Superstar
U still around breh
What's up? Answer to your question above is that income tax delinquency can't lead to your property being sold through a tax sale. But depending on how long has passed the authorities can put a lien on the property.
I would definitely look into your states version of an Offer in Compromise program to get a handle on the taxes. That is available for federal taxes as well. Essentially it is a way to set up a payment plan that takes into account the taxpayers ability to pay. Always best to have a plan in place BEFORE the bill becomes inflated through additional interest and penalties. Generally speaking as long as you have a plan in place and you're making scheduled payments additional penalties will not accrue.
Tony D'Amato
It's all about the inches
Payment plan already in process. Its federal taxes by the way.
So do u think even w/ debt, its worth trying to keep the property when the inevitable happens and she's no longer w/ us?
GnauzBookOfRhymes
Superstar
Like all things in life...it depends...obviously everyone's situation is different, especially when it comes to finances. Some things you should consider:
1. Actual value? You need to do the research to determine what the local real estate market looks like. Are other properties selling and possibly being rehabbed? Any new construction? If it's obvious that gentrification is coming and the value will quickly rise then obviously it makes sense to try and keep it. Otherwise you'd be crazy to wrap that mortgage and upkeep costs around your neck - especially if you yourself want to purchase your own home in the near future. I would get the opinion of at least 4-5 realtors.
2. How many family members would be willing to make payments? Where will the money to cover the 270k mortgage payment? If you know it's going to be a financial heavy lift to maintain the mortgage and upkeep, be wary of over stretching yourself/ ruining your credit.
3. You may want to consider possibility of renting the property. A lot of renters are willing to pay a premium for a single family home bc of the space etc. Again you need to be sure of what the market can support. They have property sites geared specifically towards single family home rentals. See what comparable properties are renting for. Take into account any money you have to put in to get the place in rentable condition. That might be a way to hold onto the property while waiting for values to rise.
4. If you decide to keep it then consider refinancing if you can get a lower rate than what grandma was paying.
5. Is family member in danger of imminent death? If so consider what her will might say or whether she even has one. What if she becomes incapacitated? All of these situations can leave you in a difficult position even if you decide you want to keep the property.
First thing, get a sense of the current value and the generally accepted forecast for that area in the next 3-5 years.
1. Actual value? You need to do the research to determine what the local real estate market looks like. Are other properties selling and possibly being rehabbed? Any new construction? If it's obvious that gentrification is coming and the value will quickly rise then obviously it makes sense to try and keep it. Otherwise you'd be crazy to wrap that mortgage and upkeep costs around your neck - especially if you yourself want to purchase your own home in the near future. I would get the opinion of at least 4-5 realtors.
2. How many family members would be willing to make payments? Where will the money to cover the 270k mortgage payment? If you know it's going to be a financial heavy lift to maintain the mortgage and upkeep, be wary of over stretching yourself/ ruining your credit.
3. You may want to consider possibility of renting the property. A lot of renters are willing to pay a premium for a single family home bc of the space etc. Again you need to be sure of what the market can support. They have property sites geared specifically towards single family home rentals. See what comparable properties are renting for. Take into account any money you have to put in to get the place in rentable condition. That might be a way to hold onto the property while waiting for values to rise.
4. If you decide to keep it then consider refinancing if you can get a lower rate than what grandma was paying.
5. Is family member in danger of imminent death? If so consider what her will might say or whether she even has one. What if she becomes incapacitated? All of these situations can leave you in a difficult position even if you decide you want to keep the property.
First thing, get a sense of the current value and the generally accepted forecast for that area in the next 3-5 years.