Options to Buy My Mother's Home to Convert to a Rental Property

[Michael Klick]

My partner and I are new investors, but believe there is an opportunity with the house that my mother owns. Getting into her retirement years, she has mentioned selling her house in order to downsize into something more manageable. With the house already having a built in apartment, parking space, and the potential to be a multifamily rental space, we are not sure on the best option for all involved to help her move out while also turning it into an investment property for us. The details of the home are as follows.

Colonial built in 1800 (updated and maintained over the years)

Property Value - $420,000-$440,000

Mortgage Remaining - $260,000

2-3 Family Rental Opportunity, potentially more if renting out rooms with share use of common areas. 

0.7 Acre lot, A driveway with parking for multiple vehicles, located on main street in our area, easy walking distance to markets, parks and plenty of other conveniences(library, ect.)

Our uncertainty lies with the best way to approach transitioning this from her ownership to ours so that we can start with favorable numbers while also ensuring she isn't simply taking a loss by selling it to us at below market value. If anyone with more experience can share an approach or ideas that might work in this situation, we would appreciate it. Further details available upon request of course, we just wanted to lay out a baseline. Thank you in advance. 

[Patrick Roberts]

Will she need the buying power and cash from this house to buy something new, or will she be renting/moving in with family? I think this likely the starting point for how to structure any deals. She could sell outright for cash, seller finance and wrap the existing loan, lease to you with a purchase option and then you wrap lease to someone else, then list goes on. The questions I would get answered first are what does she plan to do next, and when does she plan to do it?