First Potential Investment Property

[Teddy Celeste]

Hi Everyone!

I have a great opportunity to purchase my first investment property, however, it is a bit complicated and was looking for some advice.

I currently manage my father’s house that has been a rental for 5 years. My father owns the house and it is completely paid off. Fortunately, with the value being about 600K, my father decided to split the profits between my father, my 2 sisters, and myself if we sell it. But since he would have to pay capital gains tax (since the house was purchased at about 70K), I told him I would buy them out at 100K each leaving me with 300k of equity. They all agreed since they just want the money.

I have discussed this with a loan officer but the only options he provided is that my father gift me the equity of 200K and then he would sell me the house for 400K, which he can use to buy out himself and my sisters, and I can also pocket 100K to use for investing (or purchase a house for my family since we currently rent.) However, I believe my father would have to pay capital gains tax going with this option.

Another option is to remove his name and add my name to the title and live in the house for 6 months then do a cash out refinance to buy out my family.

I know there is a lot of people out there that might know a way of purchasing/obtaining this property quickly and with the least tax implications.

Any help would be greatly appreciated.

Thanks!

Teddy