The unusually wet winter caught a lot of people off guard. In some areas, with the water level being higher than ever, septic tanks were dishing out a lot of grief. One older couple, who owned up in the Timberline area, had had enough and moved to Reno to escape sewer problems in February of this year.
Now they are enjoying a simpler life, and one that is more accessible to the areas of Reno that the wife likes to visit. They don’t plan to own again, they just want the ease of renting and are happy to let someone else take care of maintenance issues!
After a nice hour-long phone meeting, we met at the Timberline property to see what we could do. Once they sold this property, all of their loose ends would be taken care of. They could put the proceeds from the sale of the house into some municipal bonds that would generate enough cash flow to cover their rent up in Reno.
And… most importantly, he would never have to drive down again to pull another weed, or complete the necessary repairs and upgrades to the interior that would be required to get full market value. He just didn’t want to do any more work, and didn’t want to deal with a Realtor and the whole traditional selling process.
We discussed a cash offer, and a seller carry offer. If he and his wife had been willing to offer terms (be the bank) on this property, then I could have paid them more, but in the end they decided to cash out and walk away clean. They had cash in hand within 7 days, and they were happy as clams. And they didn’t have any capital gains taxes to worry about, because of the 121 exclusion for homeowners.
If this had been an investment property for them, they may have wanted to carry a note to defer a lot of their capital gains taxes, while creating some nice cash flow for retirement using IRC 451, the Installment Sale.
Now, it’s up to us (my brother, mother, daughter and myself) to get busy fixing things up so we can get it back on the market later this summer. That way some nice family can have a turnkey home to move into and enjoy.