Any experiences w/ "We Buy Ugly Houses" (Homevestors) ?

[major_mama11]

After four years in our current home, we never had any luck selling our first home, a charming little house that has potential but is definitely a fixer upper. DH's buddy has been living in it rent-free for two years, paying utilities only. The agreement was that the dude was supposed to fix up the house in exchange for no rent, and eventually he and his wife were supposed to buy the house from us, as soon as they saved up a down payment.

Well, long story short, the guy has yet to do a single repair on the place (despite a fix-it background), nor have they ever paid rent. And to top it all off, they are now looking into buying a different house as they want a nicer house now. They say they will pay us for a year in back rent, but I'm not holding my breath...

Well, hearing that they are backing out on buying the house from us is the last straw, and I have already contacted the "We Buy Ugly Houses" people. The roof is in such bad shape that most banks would not risk a loan on the place.

DH disagrees about selling it, and wants to hang onto the house, thinking that "someday" he will have the time and money to fix it up enough to get back his equity when selling it. (He is the type who rarely finishes a project). DH hates the idea of "losing money" on the house, since we will likely end up getting slightly less than we owe on it. (We owe around $36k on it). I just want to stop throwing good money after bad. I want out from under this extra loan, taxes, insurance, etc...

Without that house, our housing costs would only be $450/mo on our current place... things would be soooo much less stressful!

I've rambled enough. Stories about getting out from under fixer uppers, anyone? Did you fix it up or sell as-is?

[sunnysandiegan]

Regardless of what you do, I wish you the best.

[Poddi]

I don't know about the "We buy ugly homes" people, but can you get an home equity loan and use it to fix up that house? That's what my dad did. He was trying to sell a house for a whole year with no offers. Then he looked around for handyman to fix it up. He found some guys with very good rate. Spent about 20k in renovation, relisted it and sold it within two weeks for 80k more. I think it's possible to find good cheap sources if you look around and compare. I think in this economy you can find lots of ex-construction guys willing to do it for very little. His 20k included new paint, new carpet, new kitchen counter, sink and appliances, a complete bathroom added and a crystal chandelier. Make sure you choose neutral colors and currently popular styles. Good luck!

[Cheshire]

If you don't want to spend any more on it then talk to a number of different people. Ask a real estate agent to give you the market value on it.

Then, don't be in too big a hurry. There are lots of folks out there looking for good investment houses that need work. Call some local rental management companies and ask them if they have any investors that might be looking. A lot of times there are folks that own a lot of houses and have the management companies handle all of the rental aspects. And, most of the times the management folks have a good relationship with those owners and through the grapevine might know some who are actively looking for properties.

It's the ones who don't advertise that they buy houses that you want to find. You might find a good/fair deal through a homevester but you might get an even better deal through someone you have to search out.

Sorry the renters flaked on you. I'd send them a bill and tell them they can make installment payments. That sucks.

Best wishes!

[HeatherAtHome]

I'm wondering if your price is right?

We looked around at a couple houses before settling on this one. (Which we love!) It came down to two similar houses, both fixer uppers, this one had slightly more land, was better situated (for us) and had more pluses (like huge kitchen, tons of flowers in yard, big trees, big closet etc). And this one was jsut over half the price of the other. Seriously. We have some friends that were looking into buying and fixing it up (they're in construction) but changed their mind. The house was priced at $119,000, originally $129,000 and they were so dreaming. We looked at a lot of houses and this one IMO should have been at $95,000 TOPS, preferably $85,000. It's been two years and the house is still for sale. (FSBO instead of agent now, just a sad little peeling paint sign in the yard).

Another idea is to say to the friend, never mind back rent, just do the roof for us! No clue how much it would cost you, you could either ask him to pay for supplies and/or just do the work.

[major_mama11]

Thank you so much for the input everyone! I truly love this board!

DH and I had another loooong talk about the house last night. DH is in favor of getting our so-called renters moved out and then making some improvements on it that would make a big difference in making it sellable. He thinks putting about 10k into it would gain us 20-30k in what we could get out of it.

Originally Posted by sunnysandiegan

The key here is I do complete projects. I start them, too. DH often does the middle stuff 'cause that's where I struggle at times. We make a good team.

DH has sooo many projects on that house that he started but didn't finish- no wonder no one would buy it. Maybe I will have to take the initiative to get the projects finished. I'm 100% sure if I started going over there every evening to fix it up, DH would be pretty quick to join me. (Mainly because he's such a perfectionist that he would be terrified that I would screw something up ).

Originally Posted by Poddi

I don't know about the "We buy ugly homes" people, but can you get an home equity loan and use it to fix up that house?

We will be redoing our home loan within the next year, and this is something we might consider doing, as it's probably the only way we will be able to afford to fix up that place. Even a $10k HEL would go a long way towards getting the house into a condition where a bank would be willing to let someone take out a mortgage for it- the main two issues are the roof and the leaky basement.

Originally Posted by Cheshire

Call some local rental management companies and ask them if they have any investors that might be looking. A lot of times there are folks that own a lot of houses and have the management companies handle all of the rental aspects. And, most of the times the management folks have a good relationship with those owners and through the grapevine might know some who are actively looking for properties.

This is definitely something we might look into! I was looking into the "Ugly Houses" people mainly just because I was very frustrated with the whole situation and wanting it over with. We can afford to keep paying on both houses for long enough to either look around for an investor, or to fix it up enough to sell it directly. Now that we have talked it through a little more, I realize that it would probably be wiser to not rush into anything.

Originally Posted by HeatherAtHome

I'm wondering if your price is right?

Ha- Yeah, it's not even listed right now, but when we were actively trying to sell a few years ago, DH wanted $59k for it, which was waaaay higher than we should have listed it for, considering the crappy condition. FTR, DH paid 79k for it, but he was very naive and had an unscrupulous realtor who lied about the leaky basement and other things.

We looked around at a couple houses before settling on this one. (Which we love!) It came down to two similar houses, both fixer uppers, this one had slightly more land, was better situated (for us) and had more pluses (like huge kitchen, tons of flowers in yard, big trees, big closet etc). And this one was jsut over half the price of the other. Seriously. We have some friends that were looking into buying and fixing it up (they're in construction) but changed their mind. The house was priced at $119,000, originally $129,000 and they were so dreaming. We looked at a lot of houses and this one IMO should have been at $95,000 TOPS, preferably $85,000. It's been two years and the house is still for sale. (FSBO instead of agent now, just a sad little peeling paint sign in the yard).

Another idea is to say to the friend, never mind back rent, just do the roof for us! No clue how much it would cost you, you could either ask him to pay for supplies and/or just do the work.

If it was any other guy, we would probably ask him to do the roof, but Renter Guy really has no work ethic. Just for perspective, this past week, Renter Guy mowed the yard for the first time in a year, but only after one of the neighbors complained about the 3-foot-high weeds. And he was FURIOUS about the town forcing him to mow it or else pay a fine.

DH used to do roofing as a side job, so he will just roof it himself.
------------------------------------------------------------------------------

Thanks for the perspective everyone! I feel much better about the situation now. I think if we can get the renters out (hopefully they will pay up on the back rent, but if not, I will just consider it a lesson learned ), and work our butts off fixing up the house this summer and fall, we might be able to have it in sellable condition by this time next year. If we could even just get the amount out of it that we owe, I would be delighted. We will definitely price it more realistically when we put it back on the market!

[Olma]

I'm sorry for your experience with your 'friends'. We learned the hard way too that friendship and housing combined is a recipe for disaster.
Anyway, have you thought of keeping your fixer-upper as an investment property and rent it out to decent people for real money? Or just rent out and then sell when the market turns for the better?

Good luck!

[Austin'smom]

I think your first step would be to have a realtor come by and give you an estimated market value, then you would know if you have some equity in which you could either sell as is or get a loan for repairs then sell. They would also be able to tell you which repairs and improvements would increase the value of your home the most. I was in a similar situation with a condo a few years ago, however I got really lucky that it was still a sellers market.

Good luck!!