Hey guys, I am working on a deal where the owner has passed away and her 7 children are looking to sell both her home and her commercial building.
I want to bring up owner financing but am not sure what that looks like with multiple parties on the lender side of the table.
They are all motivated to sell and move on but none want to pay capital gains tax. They have also mentioned it would have been nice to have the rental income.
Thank you for your time guys!
That's going to be like hearding cats! The more heirs, the more challenging. I would focus on the tax hit they will take if they sell, and explain how owner financing it to you will give them years of payments, or some combination of a down payment & seller finance. Let us know how it goes!
Thank you for taking the time to reply!
With multiple parties on the sale side of the deal do they need to be combined in an entity of some kind or is it several small loans? Then position of the notes come into play.
Thats a legal question I can't answer. Is this going through Probate? You might want to get a real estate attorney to help. I find many of the ones I use on http://legalleague100.com , Look in the members tab for the state. A lot depends if its owned outright or there is a existing loan. If so, that loan either needs to keep being paid and you can do some sort of wrap loan around it, or pay it off if needed. Otherwise if there is no loan, anything you do would be a first lien. Good luck!
I have never had success when trying to get owner financing if there are more than 2 people. Husband and wife or 2 siblings will work together. Anything more and it is a nightmare trying to get them all to agree. If there are 3 or more siblings or heirs, I just give them a cash offer.
If they want a little more than I really want to pay, I might offer a down payment now and a payment in full within 6 months or a year with no interest. This way I can fix up the property or market it with ownership instead of trying to wholesale it.