Real estate question

[PasadenaTrudy]

My brother and I inherited the family property from our parents. It is a commercial/residential property, 5 apts. on top, 2 business spaces on bottom. The place was built in 1915, so it is getting up there in years. We are both in our 50s now and not sure how long to hold on to it. I live in one of the apts. and collect about $35K in income from it. It is my only income. The bldg makes about $110K annually before expenses. I had a local RE agent give me a ballpark appraisal about 3 yrs ago and he came up with the value $1.5-$2.1M. What I'm wondering is, I'm betting someone would buy it and then tear it down and rebuild, since the place is so old. If we did sell it, how much is the building worth compared to just the value of the land? Or, is it better to just hold on to it, since it generates income ( there is no mortgage, dad bought it in 1964) and keep making repairs? I know it will need a repipe eventually, and that will be $$$. Had a new roof put on 2 yrs ago.

Thank you! I'm learning as I go here!

[Tuesday Afternoon]

1. I am confused. How do you collect rent on yourself? Are you saying that after you and your brother

split all the income generated your half equals 35k ,,, ? because don't you have to figure in your rent portion as part of your income ...?

[PasadenaTrudy]

2. After expenses

we split what is left over. I take more since he has a good job.

[Tuesday Afternoon]

4. that is nice of your brother. so then, you get a free place to live plus a bigger share of income?

sounds to me like you would be better off to keep this property.

isn't the value of cash down?

is this property in Pasadena?

I am not a big fan of selling Real Estate so I may be biased.

[PasadenaTrudy]

7. Yes, my brother and I are close.

I'm disabled and can't work. I managed the bldg for over 20 yrs, now we have a manager. Our dad raised us to take care of each other and we aren't greedy people. He will retire in about 5 yrs from his job as a plumber from the city of Westminster, CA school dist. He will get a pension. His wife will too as a teacher in Santa Ana, CA

The property is in the city of South Pasadena, zip code 91030.

We are glad we have held on to it this long. Our dad paid about $40K for it in '64. I agree that it is good to hold on to RE. Neither of us has kids to leave it to though

[TreasonousBastard]

3. Assuming that you and your brother...

each net only $35K out of the place, I would seriously think of selling.

If you can each net $500K or more out of the place, that might be put into an income fund and you'll be safe from tax increases, capital expenses, etc. and still have an income.

But, you have to figure what rent you'll be paying and think seriously about how you can live off the income from the sale. If you can actually get the $2 million, you should have no problem living off your share.

You can't get much more advice from a discussion board-- you have to talk to an accountant, a real estate person, and an investment advisor. And your brother.

Good luck, though.

[PasadenaTrudy]

5. Thank you..

There are pros and cons as I can see. He and I are both wondering what to do in the future.

[Tuesday Afternoon]

6. where would you go? do you want to go somewhere else? what does your brother want to do?

but, I agree with TB in that you need some professional advice.

Good luck what ever you both decide.

Sounds like a good problem to have.

[PasadenaTrudy]

8. Thanks,

I know we are lucky to have this. He and his wife may retire to Baja or Thailand, don't know yet. I'm looking at OR or NM. SoCal is hot and crowded. I would just rent something cheap..cheaper, I mean.

[Tuesday Afternoon]

9. I think it makes a difference if you both have a plan/goals that you want to accomplish.

I understand not having kids to leave the property. That does make a difference.

Neither one of you sound like you have a BURNING desire to DO something somewhere else.

Get professional advice and you both still have plenty of time.

Maybe, by the time he retires you will both have something in mind that you want to do.

[PasadenaTrudy]

10. That's true...

We would do our due diligence fo' sure. I won't be getting social security and I already have health issues at 50, so that will add some weight to a decision either way.

thanks again!

[Tuesday Afternoon]

11. hey, no problem at all here.

and it is fun (to me) to talk about real estate and the possibilities.

Good luck to you and your brother and his wife.

I hope it works out the best for all of you.

win/win = success

[PasadenaTrudy]

12. It is fun

even if you do nothing at all. It's interesting to speculate

[Hoppy]

14. Have you tried for S.S.I. Disability income? Get a referral from your county bar assoc for an att'y

Your property tax bill may give a breakdown of the percentage values of the house and land.

Consider visiting a at.E. Professional to see what the value of the place would be if it was

A. Remodeled.

B. Torn town and rebuilt.

You should have no problem getting a mortgage for this.

Also investigate subsidized housing for yourself and an Elder Law att'y for yourself to palm
N now for your later years.