Buying out 50% parner of short term rental - checklist items
I will try to keep this as short as possible. I am looking to find the most fair solution for both parties as my partners have been great and I hope to do future deals with them.
We have a furnished short term rental in Maui. We split the down payment and are both on the loan. The market has gone up substantially from when we bought. For business and personal reasons, my partners want to free up time and money as they bought a new business and wont to focus solely on that. There are 3 options. 1- We sell and split the proceeds, 2- they find someone to take over their half or 3- I buy their half out. I am looking at #3 now. I am not too keen at purchasing at the current market price as I believe its nearly topped out, however looking at bigger picture, I would be owning it at the half way mark between the bottom of what we bought at and the current market now.
Condo was bought at 366, value is probably in the high 400s now, perhaps higher. The complex we are in has had several 2/2 sell lately in the 520-560 range. Ours is 2/1. One 2/1 is pending now with the same sq footage and floor plan, but on the top floor with vaulted ceiling (which makes the place feel bigger and gives much more sunlight). Our agent estimated our place in the high 400s and this place is pending at a 510 list price (waiting on to close for actual price0. Any ideas on how to determine our price? Thinking best bet is to either wait on close of 2/1 and negotiate a few less for ground floor or wait on appraisal to come back for my refi.
Aside from the purchase price, I am trying to make a check list of items we need to address financially so neither of us are getting an unfair deal. Here is what I have so far -
1- Address taxes, insurance and hoa fees already paid or owed at time of close. Work percentages of what needs to be paid back or paid to at close.
2- Closing costs (assumed 6% fee and whatever legal costs to transfer full ownership of llc)
3- Determine date of ownership takeover and remove all payments for already paid for stays so when we split the bank balance we are truly splitting everything earned up to that date and nothing after.
4- Payments owed to cleaners/maintenance for work performed
5- Airbnb and VRBO membership fees already paid
Am I missing something? Are there any major non financial considerations that I need to address? I apologize for the length, but I wanted to offer up as much as possible rather than ask for advice without showing I have done the work up front (big pet peeve of mine)