Updated about 10 years ago on . Most recent reply
Indirectly purchasing a multi-family property
I have been looking for multi-family properties to invest in. I found a property that fits my criteria. I toured the property, and talked with the current owner for about 30-40 minutes. When I asked the owner why he is selling, he said he didn't want to. He is in it with his two sisters (sounds like an inherited property) and they decided they wanted to sell. (I am assuming 1/3 ownership by each). He said he would buy out his sisters shares but doesn't have the financial resources right now to do so. I have been debating in my mind if purchasing the two sister's shares in the entity that owns the property would be better than purchasing the real estate directly. I have not proposed this idea to the owner but I assume he wouldn't mention it so freely if he wasn't at least open to the idea. There is 10 years left on the mortgage. This would save a lot of money by not having to pay closing costs, commissions and would avoid starting another 25 year(or more) mortgage on the property. Aside from those things I just mentioned and the fact that I don't know the owner from Adam what are some additional reasons that this would or would not be a good idea?