Investor · Chicago, IL · Member since 2016 · 29 posts · 9 votes
A parent split down payments with me after receiving an accident settlement at age 18 to co-own two multi-fam properties located in different states. But now over a decade later, I realize they've not been managed properly and as an wiser adult I'm setting out to right that wrong.
I've never missed a mortgage, and have happy renters in all units, but I agonize over the lack of pristine account books, and not knowing if they are better off in an umbrella policy and land trusts, or if rather organized as an LLC.
One huge stress factor is that I solely pay property taxes, maintain and manage the units, and keep them rented while my parent routinely demands the split partnership if sold. It's a recurring, uncomfortable discussion as I intend to hold for the longterm, and moving on as an adult with marriage and my own investments.
Where should I begin to tackle this issue with grace?
Being in this situation with a parent must add a whole new level of stress. I had a similar unbalanced relationship with a business partner and finally just made a proposition to buy him out. He got a better deal than deserved, but the price was worth the peace of mind.
Being in this situation with a parent must add a whole new level of stress. I had a similar unbalanced relationship with a business partner and finally just made a proposition to buy him out. He got a better deal than deserved, but the price was worth the peace of mind.
Thanks Roy. That's definitely something I'm hoping to look into, but obviously need to get all of the transactions and money flow accounted for before understanding what a fair buyout would be. My parent has already speculated outrageous numbers - and it makes things even more complicated because I do love them and want the best for everyone. I'm just hoping that the solution is me taking over, strategizing correctly, and having a reasonable passive income that we can both enjoy fairly.
If you do not already have one, there are a few here on BP whom you could interview ... or at lease they would be able to tell you the information to bring and the questions to ask when you interview a local CPA.
The easiest route would be to sell split the profits and go your own way.
Maybe the easiest, but a bitter pill to swallow, as I really love these properties and feel their markets are trending upward for a bigger payoff. Hopefully I can get all of the books in order and then make a better decision regarding a buyout, or a better understanding of the partnership as we move forward to establish an LLC.
Investor · Chicago, IL · Member since 2016 · 29 posts · 9 votes
9y
To update this thread, after 6 more months of emotional/financial stress, I'm now working towards dissolving the partnership with as much transparency and diplomacy as possible.
Rather than start out new books with a CPA, I'm hoping to hire an accountant for a financial audit going as far back as possible, to confirm the unfortunate workflow (expenses paid from various personal accounts, unreliable reimbursements from building accounts, etc).
I really hope clear the air and wipe out any ambiguities so that we may come to a fair solution for a buyout.
If any property owners have ever conducted such an audit, I'd love to hear about your experiences.
If any of the accountants tagged previously are capable of conducting something like this, I'd love to hear about costs and logistics.