Hello BP members, first post here but been listening to the YouTube channel for a few weeks now and I'm pumped. I have a very specific deal/idea in mind that I would love for you experts out there to poke some holes through it and tell me if I'm right or wrong.
My wife and her two siblings inherited a house from her parents worth about 480K, it's in a trust now I believe, one of the siblings lives in the house currently. I'm suggesting to my wife that her and her sister (currently living in the house) get a HELOC against the value of the house and to do some BRRRR deals with that money instead of just selling that house which will probably take some time the way the market is behaving in Miami already. According to the trust, when the house is sold the proceeds have to be split up 4 ways. This way way the play money amount is larger (assuming 70% of value) vs the proceeds split 4 ways.
What do you all think of that strategy? Am I off? Am I on the right path here? Your input is greatly appreciated.
p.s., the 3rd sibling will probably not want to be part of the BRRRR process
Thanks in advance for your time.
Welcome to BP @Alain Martinez Your idea seems sound as long as the other heirs are willing to invest in real estate.
Thank you for your response @Ned Carey
who is the 4th way? wife and two siblings AND>>>>? All I will say is you 4 better be VERY on the same page about how things are gonna be run. Risk/reward... timing... if it were me... especially if one person isnt into it, I wouldnt risk my family peace over it. Sell the house, make an LLC with whoever wants in... make a charter or something, a plan and go forward eyes open...
highly suggest you all speak with a trust attorney (or two) so if you structure it the way you suggest, there's a clear division of profits, responsibilities and an exit strategy.