Opportunity to sell rental property

[andy158]

I have a rental property that was included outside my bk 13 and have an opportunity to sell it. A relative expressed interest in it for their kids first starter home. The expenses have been going up and I found out last week it needs the roof replaced (inside water damage) caused by the tremendous amount of snow we had this past winter. I have three estimates from $3,500 to $4,200 to replace the roof and repair a section of ceiling that has water damage. Emergency fund is not nearly that much. I am going to attempt a temporay fix for the roof. They offered to purchase it "as is" and know of the roof issue.

My question is what affects would this have on my bk or if I can sell such assets while in bk? The profit margin would be minimal and I would even sell it for what is owed on it to make it disappear. At this point I am breaking even on it, but had hoped to use it as retirement income when it got paid off.

[NoTomatoCan]

Conceptually, yes, you can typically sell a property while in a CH13, but a few items jump out that you need to consider...

First, you definitely need your trustee's permission to do anything!

Second, since this transaction is to a family member, the trustee might be worried that it is not an arms length transaction. Your comment that you would "even sell it for what it is owed on it to make it disappear" sort of supports that. If you are selling it to family member for anything less than fair market value (taking all things like the roof and "as is" condition into consideration) than your trustee could (likely would) object.

Third, your plan will necessarily change with any sale of an income producing property. That means no income for the plan from that property, but also no expenses. Your budget needs to be reworked and may require a plan modification.

Get with your attorney on what the best approach to all of this would be.

I totally know where you are coming from though. My wife and I are still awaiting confirmation, and we kept one rental and got rid of another. Both were CF positive, but it came down to hassle factor. The one we let go was such a pain, and was in a neighborhood that was going downhill, that I felt the same way you do about yours. Just make it disappear!