Partial Interest In Property - Residential - Anticipate Zoning Change

[Eric Anderson]

I am in the process of buying 50% ownership in a residential house located near an NFL new stadium. The parents owned (deceased) the house and left 25% to 4 siblings. The siblings can not agree what to do with the property so two siblings, who want to cash out now, approached me on buying 50% interest for $250,000. I have an attorney handling the transaction. This should be completed within the next week.

Once I own the house, I will own 50%, Sister1 25%, and Sister2 25%. The appraised value is probably $400,000 (zoned residential).

I would like to remodel the house (4 beds 2,.5 bathrooms), projected at $200,000, and rent as a short term rental during the year on AirBNB (similar). On football weekends (8 per season) I can rent the house for $4,000 (net), and park cars during the football weekends. The revenue looks like the following:

Football Weekend House Rentals: $32,000 (8 home games × $4,000 per game for full house rental during game weekends)
Short-Term Airbnb Rentals: $47,952 (333 non-game days × 48% occupancy × $300 nightly rate for year-round vacation/corporate rentals)
Game Day Parking: $9,000 (8 home games × 15 parking spots × $75 per car for tailgaters walking to stadium)
Total Annual Gross Revenue: $88,952

Looking for input on the following:

1. Assume I pay $250,000 cash to buy out 2 siblings, what are my options to finance the $200,000 renovation project?
2. What approach would you take with the Sisters if they want to stay involved?
- silent partner, not contributing time or money except holding their position
- how do you handle the increased appraised value after (1) the remodel and (2) after operating for 2-3 years?
3. If the sisters were silent partners, what are they entitled to from the operations of the property?
4. I will work on changing the zoning to a higher use than residential over the next 2-3 years. There are a block of 8 houses which could be rezoned based on the location and geographical boundaries. This change in zoning could 2x the value.