Tear Down & or Rehab - Please Educate Me - Posted by Elizabeth (NJ)
Posted by Elizabeth (NJ) on August 07, 2003 at 20:29:39:
Here is the situation. A woman who came to one of my bankruptcy seminars asked me to buy her house. Her mother (now deceased) bequeathed it to her & 3 other adult children. (Everything has gone thru probate so no problems there.) It’s in an area that is a mix of commercial and residential and one block away the houses are going for $250K and up.
This house is big but pretty broken down; the adult brothers are living there.
Medicare has a lien for the mother’s healthcare, and there may be other liens.
Seller wants $40K.
Comps show the property is worth at least $100K.
There’s a parking lot next door and the owner of that lot just happened to be there on the day I looked at the house and he asked me if it was for sale. OF course I said I don’t know.
I prepared a contract to buy it for $40K, prepared a Power of attorney by which her siblings authorize her to act as Attorney in Fact on their behalf with specific regard to the sale as well as releases for me to communicate with Medicare etc. to negotiate a compromise of the lien.
My thinking is that the land itself may be worth more as a commercial property instead of trying to rebuild/rehab the house.
My question is would you tear down the house and rebuild/rehab or market the property based upon its commercial value?
As I’m just learning the ropes I appreciate and thank you for all advice, suggestions, etc.