Formula for BUYING OUT A SIBLING on a mixed use building.

1 Reply

Hello,

I was quick deeded a building upon my mothers passing. Unfortunetly, its a mess because the building was in a relatives name and when my mother passed the relative quick deeded the building to me for a dollar.

I know its a mess.

Anyways, one of my siblings doens't want to hold onto the building and wants to be 'bought out' and so we are trying to figure out a buyout price.

there are 3 siblings total.

The building has been in my name for 5 months only. I am not gonna sell it for a bit. My sibling is looking to be bought out immediately.

The building is probably worth about 390K and has an outstanding mortgage of 20K.

When buying out a sibling, do I take into account capital gains? If so, shoud I just do the 15% since I won't be selling it till after a year.

So, I will have to refinance or take out an equity loan - ITS A MIXED USE BUILDING....units/restaurant.

Should i just divide the appraisel by number of siblings minus 15% for capital gains etc.....what is the formula for buying out a sibling?

Since I will not be making much money (about $300 dollars profit per month from the building IF I TAKE OUT AN EQUITY Loan since the building doens't generate alot of income...how should i figure buyng my sibling out...he feels he is enttiled to exactly a third, but that seems high since he can play with the money now wherease I can't...

alll advice appreciated.

Battlelord,

You need to get a real estate minded accountant and attorney to help with the details. The details of your situation are too complex and generally too involved to get serious advice that you can use from this board. Good luck and hopefully you will have a solid investment when this is all done with.

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