(Apologize in the advance for the long post, but need to provide some context before jumping into the questions)
Ok, so the story behind the reason why is long and mostly irrelevant to the information I'm seeking, but we have a home back in Ohio (our first home) that is being rented by a family member and half of the house has been just about destroyed. We're talking significant bathroom water damage, black mold, **** roach infestation, broken windows, ruined finish on the hardwood floors, etc. We won't be able to recoup our costs from him due to him having next to no income due to being on disability. So suing or anything like that is not an option. So far we're close to $20k in repairs and there's still more being discovered by the contractor (a fried who owns his own business and legit knows what he's doing. Basically doing work at his cost to help us out.). Our savings has just about been wiped out by this.
We bought the home in early 2000's and once the housing market collapsed, the prices dropped way below what we bought for and still haven't come all the way back. Before all this work started a couple weeks ago, we couldn't have broke even to sell the house, which is why we were renting to a family member, trying to buy time til we could break even. Now we're looking at $20k+ in repairs and counting and even if they get everything fixed for no more money (which won't be the case), we'll still be unable to sell it for what we owe + the repairs to break even.
The guy doing the work has said he just keeps discovering more and more problems (some due to how the house was built in the 40's) and said we should seriously consider just letting the house go and bite the bullet on the money we've already spent so far. He said if we don't do that, we'll probably never be able to sell it for what we'll have in it and would likely have to be long-distance land lords for the rest of our lives waiting to be able to sell it, which is something we REALLY don't want to have to do. Who's to say a new tenant won't ruin the place all over again? For some perspective, this is a house that even after all repairs are hypothetically completed, we'd be lucky to be able to sell for around $80-90K.
We currently have a home in NC that is now our primary residence (purchased ~3 years ago) and we were literally just getting ready to apply for a loan to buy property and build a new house and then sell our current home. (We've got a decent amount of equity in the home so far considering we only put 3% down and have only owned it 3+ years.) That now seems to be squashed for the foreseeable future. What we're now wondering is, if we did just let the house go and have it foreclosed, how much devastation should we expect it to do to our credit (both of us are 800+ credit scores currently), and would we be forced to pay some kind of fees, taxes, penaties, etc for it being foreclosed? Is there less "damage" done financially and credit-wise if we were to try to do a short sale on a home that is literally still under repair and partially gutted? How long do you think we'd be hindered by this before we could pursue the process of getting a loan buying property and building a home?
Sorry for all the questions and the long read, but GREATLY appreciate any insight anyone can offer that has some kind of first-hand knowledge and isn't just guessing.
Ok, so the story behind the reason why is long and mostly irrelevant to the information I'm seeking, but we have a home back in Ohio (our first home) that is being rented by a family member and half of the house has been just about destroyed. We're talking significant bathroom water damage, black mold, **** roach infestation, broken windows, ruined finish on the hardwood floors, etc. We won't be able to recoup our costs from him due to him having next to no income due to being on disability. So suing or anything like that is not an option. So far we're close to $20k in repairs and there's still more being discovered by the contractor (a fried who owns his own business and legit knows what he's doing. Basically doing work at his cost to help us out.). Our savings has just about been wiped out by this.
We bought the home in early 2000's and once the housing market collapsed, the prices dropped way below what we bought for and still haven't come all the way back. Before all this work started a couple weeks ago, we couldn't have broke even to sell the house, which is why we were renting to a family member, trying to buy time til we could break even. Now we're looking at $20k+ in repairs and counting and even if they get everything fixed for no more money (which won't be the case), we'll still be unable to sell it for what we owe + the repairs to break even.
The guy doing the work has said he just keeps discovering more and more problems (some due to how the house was built in the 40's) and said we should seriously consider just letting the house go and bite the bullet on the money we've already spent so far. He said if we don't do that, we'll probably never be able to sell it for what we'll have in it and would likely have to be long-distance land lords for the rest of our lives waiting to be able to sell it, which is something we REALLY don't want to have to do. Who's to say a new tenant won't ruin the place all over again? For some perspective, this is a house that even after all repairs are hypothetically completed, we'd be lucky to be able to sell for around $80-90K.
We currently have a home in NC that is now our primary residence (purchased ~3 years ago) and we were literally just getting ready to apply for a loan to buy property and build a new house and then sell our current home. (We've got a decent amount of equity in the home so far considering we only put 3% down and have only owned it 3+ years.) That now seems to be squashed for the foreseeable future. What we're now wondering is, if we did just let the house go and have it foreclosed, how much devastation should we expect it to do to our credit (both of us are 800+ credit scores currently), and would we be forced to pay some kind of fees, taxes, penaties, etc for it being foreclosed? Is there less "damage" done financially and credit-wise if we were to try to do a short sale on a home that is literally still under repair and partially gutted? How long do you think we'd be hindered by this before we could pursue the process of getting a loan buying property and building a home?
Sorry for all the questions and the long read, but GREATLY appreciate any insight anyone can offer that has some kind of first-hand knowledge and isn't just guessing.
