preparing to inherit 3-5 debt free homes.. now what?

Question

hello new (first message) hope i'm posting in the correct place, apologies if not.

So here's my situation...I'm 35 (only child/no kids, renter, total debt 60K -primary student loans, good job in tech) I have small family and all my relatives are 75+..its become apparent but very emotional as they need me to step up on inheritance, estate planning stuff. The bottom line is inheritance falls to me (age 35) & my cousin (age 55+) he made it clear he doesn't care about any of this; my aunt will probably leave him another home to manage; so I'm going at this alone. My family owns 4 debt free home in a part of maryland near the bay (not waterfront property but in a small tourist town).

Everyone keeps saying i'm sitting on a gold mine aka retirement plan I finally had to work past the emotions of losing my family and recognizing how lucrative rental property can be. So right now while everyone is alive in well I’m trying to work with a lawyer to do a quit claim deed; the family is willing to sign and add my name to the deed asap. The property taxes are very easy to manage they pay that themselves.

Out of these 5 homes; right now 2 are occupied; 2 are dilapidated; oh and this is kinda major problem one property has lien of 40k I had to call the court of Maryland to match the story my aunts kept telling (can't verify this online) so that's last on the list to be fixed. Also that heir property belongs to great-grand parents so lawyers say I may have to see if living kids of my deceased uncles want input as they have rights.

Anyway right now I'm overwhelmed and lost as I just started listening to passive real estate podcast but we are not there yet; I need to continue to save and pay down my personal debt so I can get a loan to do some renovation work AFTER I can get my name legally on things.

thoughts? ideas? i'ma tech nerd and Real Estate is way outside my area of expertise but I'm willing to learn. I'm super motivated bc if I can flip this project the right way I want to retire at 50/55 and live off the rental income

Jeff B. · Answer

When title is filed in your name, IMMEDIATELY get a market appraisal for each. This will become your new basis and establish the point for your future capital gains. If you sell almost immediately, your basis will equal your FMV and your gain will be ZERO while the check will be FMV.You have several options, flip for profit, hold for cash flow and appreciation or outright sell and take the family around the world.Best wishes to you.

Loren Clive · Answer

I'd definitely get the cousin issue resolved before doing anything. Talk to a lawyer.

Christopher Reid · Answer

@Kay Na Welcome to BP! There are a million different angles that you could take for solutions here. I would start by asking yourself if you want to invest the time to educate yourself on the many many options that are available. BP is a phenomenal place to learn and ask questions, listen to podcasts, read read and read. Another options would be to form a "team" of sorts. Professionals in respective fields of construction, real estate Law, appraisers, etc and treat your situation as a business.Feel free to message me with any questions, I'd be happy to offer any advice that I can.

Deanna McCormick · Answer

Also.I'm sure you realize a Lien is a Debt and that (house) on that property can't be sold until that is satisfied, at time of sale or before so it's a outstanding debt. 2 dilapidated houses are how bad ?? if they can't be rented out for use... they are costing taxes and and insurance costs until they are fixed up.. so a loss and every month they continue it's a added cost. I'd start with bids for repair there first, or a close second to get the ball rolling.

Deanna McCormick · Answer

Your not getting what I'm trying to explain, You can't make a contract for your uncle to sign until after your mom's died,, what happens if he chooses not to agree then..Right now,you don't own the property,, the only person that can control who gets what is your mom.. she would need to stipulate a set amount your cousin gets and change her intentions to protect you !! you need to stress that.Does each property have a separate title,, or is it several houses on one piece of land... if all are on one piece of land your stuck.. your only choice is to have your mom take out a loan against the property and get the property back into decent shape before she dies, or what your planning is to sink your money into a money pit with no real GUARANTEE the property will actually be yours someday.. you have no protection for your own personal investment .. One thing you could look into is if the property could be divided, a piece of the land could be sold to cover needed expenses for upkeep of the other houses.. how may acres are you talking and find out minimum lot size for your township or county so you know if it's possible..

Kay Na · Answer

how does that work legally? i feel weird putting my cousin on a contract but that's why my mom stayed out of this 'house situation' and made me stay out of it. She knows i'm going to pay the bill and my cousin does nothing. But i'm not from the old school; I will make him sign a contract if it doesn't help with anything legal, rehab, property tax expense than he has to go.I can't sell any of them; sorry let me provide more details they are all in a row; Its alot of land around them so I was thinking maybe see what can be salvaged and try to add to the portfolio might can squeeze two more 1-2 bedroom houses on the land

Kay Na · Answer

@jeff B. ok i been using the Maryland government Dept of Assessment & Taxation to gain valuesin total the homes are worth $330k. How does that differ from the market value?I want to save and/or borrow to rehab each so they can be rental income.I don't live in the maryland area I'm 35 and if I can retire around 55 I can stay in one of theseor if I can make enough retire in Hawaii :)

Deanna McCormick · Answer

Lots to figure out and good that your looking at now with everyone able to match stories and plan.1st although you say cousin doesn't want anything .. that could change.. so either get him off the books now or have his share,, made smaller like 5%You should plan on selling at least one property to cover debt from the other properties and maybe have enough to do some rehab work besides. So basically if your Mom uses a Trust this would probably be the best way to protect assets and not have to go thru probate,, Your situation is similar to me.. your just younger but your mom could live a long time.. So with the 4 properties my parents owned they had debt (mortgage ) , but had wishes they wanted us to run the properties after they were gone.. I decided to sell 1 property and then decided to sell another.. my sanity now intact.. I took the funds paid off the other beneficiaries. so I call the shots now. Study up on what is required by a trustee to do.. it's person whom is the executor for a trust.. I had to research a lot. Anyway I guess the point is your "Personal Money" is yours you can save up but don't fund any of these properties with your money, "if you have to share" any portion with someone else in the future or if your name is not on them. Makes no sense..you use your mom's funds to run her properties, if she can't afford it she sells something before it becomes a total loss.