Thanks in advance for any help you can offer. I’m in a unique situation here. My grandma has this three-unit property in a major city. There’s a big house in the front and a duplex in the back. She never raised the rent, and now she wants to sell because she needs money for full-time care. A real estate agent said the low rents make it tough to sell at market value, plus she still owes money on it. One tenant is moving soon, which could let her fix up the unit and rent it for more or sell closer to market value. My wife is interested in buying it since the area is super popular now. Any tips? I’m happy to answer more questions!
Get a professional appraisal of the property’s current and potential value with market rate rents. Family deals can get messy, so have everything in writing and consider a real estate attorney.
This is tricky. Your grandma needs a Board Certified Eldercare Attorney. They can help structure the sale and protect her from any Medicaid clawbacks. A trust, then a sale to you might be the best route.
Sounds like she might owe a big tax bill when she sells. Plus, she’ll need cash for renovations. If raising the rent isn’t enough, maybe a cash-out refinance could work better.
Sutton said:
Sounds like she might owe a big tax bill when she sells. Plus, she’ll need cash for renovations. If raising the rent isn’t enough, maybe a cash-out refinance could work better.
What’s a cash-out refinance? I’m not super familiar with that.
@Peyton
It’s when you take out a new mortgage for more than you owe and take the difference in cash. Can be helpful for renovations!
Definitely get everything in writing. Family situations can get complicated. Maybe think about offering grandma a life estate or care agreement as part of the purchase.
I’d say don’t wait to inherit. Too many variables can change, and the property market is unpredictable. Timing is key!