Back story: I purchased a house in 2009 for $67k. Lived in it for 3 years, then moved into my wife's house. My family (mother, father, sister, sister+daughter) was getting their home foreclosed on so I let them move into my house. Rent was far below market value, they just had to reimburse me for the mortgage. They lived there for the last 5 years. They haven't destroyed the house, but they didn't maintain it nearly as well as I would have liked. I'm glad I was in a position to help my family, but I greatly regret ever letting them move in. Long story short, I've asked them to leave, they have a new place and will probably be leaving within the next month.
Zillow zestimate for the house is $150k. From other comps in the area this seems a little high for the condition it's in, but accurate if it was all fixed up and move in ready. I don't like the stress of renting the place out, though I would be much happier if I was getting fair market value (probably $400-500 more than I'm currently getting). I still think I'd rather just sell it and be done with it since I have so much equity in it (I owe $35k on it). I think I probably need to fix it up (though if the market is hot enough than I can just reduce the price by an equal amount and just let the buyer deal with it I will do that). I haven't spoken to a realtor yet, but I have some idea of some things needing to be fixed:
Replace glass sliding door and address the leak at same location
Update kitchen (new counters, maybe new cupboards)
new flooring throughout house (currently carpeted)
replace bathroom vanity
lots of minor fixes to door handles, etc.
fresh paint throughout
I don't have the cash on hand to make these repairs, but I should have more than enough equity in the house. Will it be an issue for me to get financing from a bank or credit union seeing as how this is my second house and not my primary residence? I have no intention of renting it out, I want to sell, but which answer is more likely to get the bank to lend me the money necessary to fix it up? It seems like a no brainer for my credit union to lend me the money to fix it up since I have A++ credit score and can use the house as collateral, but sometimes mortgages and lenders don't make any sense so I wanted to seek advice here first.
I'm also a big proponent of DIY and sweat equity, but seeing as how I work a full time job, have a baby on the way in October, and will still be paying the mortgage for every month until it's sold, I think I should probably hire out all the repairs to get it done and on the market ASAP. Saving $500 by DIY but paying $700 for mortgage doesn't make much sense to me, especially since I have to put in all the effort.
I'm thinking I might need to dump $20-30k into the house, but then should be able to sell it for $150k.
$150k - 6% realtors fees - $30k loan - $35k mortgage = $76k
The mortgage on my main residence is $46k @ 5.5%, so my plan is to use the proceeds from the sale to eliminate my main mortgage. That leaves me mortgage free with about $30k in taxable investments.
Any thoughts or advice on this?