listen up realestate gurus, i have a piece of property that has unpermited improvements!?

Question

unpermited add on's and coversions. i just found this out. i have about a 500 neg cash flow on it and im guessing its gonna cost big money to get the changes legal and permitted. im thinking of giving up the property to the mortgage company. what are my options?

the county is aware of it.

Answer 1

Is the county telling you to fix it? Before you consider giving it up, get some estimates on bringing your home up to code. It may seem like alot of changes/modifications, but an estimate will give you a clear picture of whether it's worth keeping your home or not. Generally it's not all that much to get an addition/modification permitted if the addition was done properly.The market won't stay this way forever, and homes generally increase in value over time, so you may find out that your best bet would be to hang in there, get those estimates, see if the county will give you time (if they're harassing you about it), and see if a lender or your lender might work with getting you the money you may need to make the needed corrections. Otherwise, if the county is not pushing the issue, make the corrections as you can afford to. A house up to code is worth more than a house that isn't. If you have equity in your home and can afford to refi, then it might be a good idea to do so and keep your home. To do a deed in lieu of foreclosure is what I'm thinking you're thinking, where you hand the keys to your lender and walk away from the home, but that is a decision the lender would make, and at this time many lenders are trying to have their clients stay in their homes rather than take them back. Lenders generally don't want the hassle and expense of trying to resell the home. A foreclosure would mess you up big time with your credit. It would take at least 2 years before you could try again to get a home. Hope this helps, good luck :)

Answer 2

If no one is aware of the fact, then dont worry about it and pretend you dont know either.
If someone is making a big stink about it...check with a General Contractor and get an estimate on what it will cost to bring the house up to code and make your decision based on that...giving it up to the lender is going to negatively affect your credit and your name and adversly affect your most important asset in real estate development...YOUR LEVERAGE ability..so that is the last option...be better to loose money of a sale and pay the diff if you can afford it.