Buying in-laws home?

[Brian Garrett]

Hello BP Community.  We're still getting our feet wet here and on sound financial ground to shift into real estate investing (someday I'll post in the newbies forum (I'm still considering myself a newbie).  But I had a moment and thought I'd toss this out to the crowd to see about strategic options.

My wife is one of three siblings.  Relationships between the siblings is good, so no real issues there.  We are the only DINKs of her sibling group, so we are in a better position financially overall.  My wife's folks live in a very desirable townhome in Westminster about 200 yards from the townhome we are in and are in their 80's and slowing down.  Their townhome is paid for and with any luck their remaining days will be spent there.

My wife really would like to buy the property as an investment vehicle and the ranch townhomes regularly go for around $300/$325k at least.  If they are on the market for 24hrs that's considered a long time.  Certainly we don't want to assume that we would inherit a third of the property, but that's the way the math would work out given that they should pass while living there.  We would like to approach not only her folks with a deal where we would trade her inheritance in the home for equity in the property and buy her siblings out for ownership in the property.

The reason I ask this is because we want this to be all above board and everyone agrees to the deal so there are no hard feelings should/when the time come to pass.  If anyone is against the deal, no biggie, we'll walk away from even suggesting it in the future.

So - the question is, is there a method or way to use the 1/3 of the potential inheritance as equity in the property and only needing to borrow against the remaining inheritance balance to pay off the other siblings?

The easy way is to obviously take out a full loan, pay off the other siblings, but then we would be borrowing more money than would be necessary.

Maybe I'm missing something obvious - but that's the only clean way I can see to approach this process.  I'm hoping greater minds may have a better idea on how to structure the deal.

Input is welcome.

Thanks.  :D