I will handle my moms estate want to develop a plan for rental house now

11 Replies

I will have to cash out three siblings and do maybe $40000. In rehab. Close to very good schools , very safe quiet area higher income area has a pool it is a 1950s ranch. Four bedroom two bath  single story on a flat third of an acre lot. In California I think I can with prop 13 keep her old tax base maybe $1000. Per year verses $6000. or more at current market ? What do I need to do to lay out plan from here? 

Step 1: Talk to siblings to make sure they are on board.

didn't really think of talking to my siblings! I guess developing a spread sheet to show them and sell the idea the same way you show a bank or an investor is what I need to do.maybe with a plan to get it rented and find a bank to get a new mortgage and cash the siblings out? Would it be good to get a signed agreement from them ?

You will lose the Prop 13 savings on the share of the house that you buy from your siblings. So you will retain the lower basis on your 25% share, but the other 75% will be re-assessed at market value when the deed records.  It might be possible to get around this if there are other assets in the estate (like liquid savings) equal to the share you plan on buying from your siblings.  If they will agree to take your share of those assets in lieu of their share of the house, you might be able to retain the lower basis value on 100% of the property.  In the end, everybody's share of the inheritance needs to be equal or this won't work. 

Originally posted by @David Hayman:

didn't really think of talking to my siblings! I guess developing a spread sheet to show them and sell the idea the same way you show a bank or an investor is what I need to do.maybe with a plan to get it rented and find a bank to get a new mortgage and cash the siblings out? Would it be good to get a signed agreement from them ?

 Sounds like you intend to railroad them into your plan.  Personally, I'd start the conversation with "what do you guys think we should do with mom's house?"

If you want to do this have the discussion then if agreeable have the contract drawn up by a lawyer.  Do I need to say that again....  get a contract on what you agree to drawn up by a lawyer for the sale of the house.  If  you plan to buy it your best bet is to try to have all of you inherit at the date of death value and agree on some price and time period after which you will close. 30-60 days maybe.   I have been through a proposed sale to one sibling with 7 of us involved. In the end it turned out okay but all our relationships are worse for wear and it had the potential to cause a permanent rift between some of my siblings.   For me the important fights were during the sick mom part but it gets complicated and to some its about the house and what it means or the money it represents.   I can't encourage you enough to talk about it now and use a written contract if you do it.  There are important aspects like what is part of the house? when does the estate stop paying for utilities and insurance? what is the estate responsible for fixing?  when would you put a tenant in ? under whose insurance?  anyway, good luck and I hope if your mom is mentally with it you have her for a long time to come.  If not I hope your journey is an easy one.

thank you my mom is still in good health at 87 ! I have two out of state siblings and one close buy, my sister and I are the executors of the trust and will have all the responsibility of settling everything and taking care of things since we are here.i am hoping I can get something written up that my mother might agree to that would be given to my siblings so they would know what was going on. Thank you for all the suggestions ! This is a really great group I'm glad I found you all.

Originally posted by @Linda Weygant :
Originally posted by @David Hayman:

didn't really think of talking to my siblings! I guess developing a spread sheet to show them and sell the idea the same way you show a bank or an investor is what I need to do.maybe with a plan to get it rented and find a bank to get a new mortgage and cash the siblings out? Would it be good to get a signed agreement from them ?

 Sounds like you intend to railroad them into your plan.  Personally, I'd start the conversation with "what do you guys think we should do with mom's house?"

  Like any other deal what I would like to do is look at it analyze it and create a plan that makes sense , then present it for agreement from the other partners (siblings) . If we liquidate we would get this amount,if we all put this much in we might sell for this much, and here is what I want to do and present my plan . What deal is going to work best is the question .for any partners or investors I would need to sell the deal.im hopping that a conversion to a rental will make the most sence .

you should probably sell as-is ASAP and split the money .

do your plan and lose money and your family thinks you are noob.

do your plan and make money and your family feels ripped off by a crook.

is the time and hassle really worth this?

The best value for an inherited property most of the time is if you can wait to inherit it.   You then get the stepped up basis for tax or sale purposes.   Selling while your mom is alive she could get the onetime exclusion but not sure if it would hurt in other ways. Best to talk to an estate attorney.

Originally posted by @Steve B. :

you should probably sell as-is ASAP and split the money .u

do your plan and lose money and your family thinks you are noob.

do your plan and make money and your family feels ripped off by a crook.

is the time and hassle really worth this?

part of the fun is putting together a plan and learning how to do this! I would want to make this work as a rental I want to make sure I get the best deal for my family. We all want to know how to put a deal together. Having watched friends that ran out of money from their dads estate before they sold the house and had to dump it at a lowball price I dont see the value of selling for as little as possible...One comment I heard was there is a moratorium on swimming pools because of our ongoing water shortage.Does that mean a house with a pool could be more valuable? Or less valuable?

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