Elderly owner, creative financing solutions!

[Graham Atwater]

Hi all! 

I’ve found a potential deal with an open minded owner. I’m trying to structure a deal that genuinely benefits the seller and I. The seller is also very elderly and may pass soon (he’s rather accepting of this fact). He currently has the property set up in a transfer on death deed. 

Sellers Info

-Main interest: minimizing capital gains/taxes, preserving estate for his kids

-SFH free and clear, no mortgage, purchased 30 years ago for ~$150k

-Currently acting as landlord, very likely doesn’t want to continue in this capacity 

My info:

-I want to cash flow the property now 

-I want to purchase the home now or in the future 

Property info

-No tenant, rent comps $2600-2800

-Current comps of $290k-320k

I don’t know the sellers full financial picture. I do know minimizing capital gains or any other taxes is a priority for him. 
 
I know his cost basis in the property is likely very very low, so selling would trigger significant capital gains and depreciation recapture. 

Here’s what I’m thinking….

-Master lease option now, with option upon TODD actuation or some period afterwards. This allows cost basis to be raised before selling, maximizing tax benefits to the seller/his estate. It also allows me to take over property management, landlords duties, and reap the cash flow now. 

What are your thoughts? Anything I’m missing? How could this be done?

I love BP!!!