How to Pitch Seller Financing to Elderly People

[Christopher Freeman]

Hi All,

I'm considering putting a somewhat avant-garde offer in on a multi in my area. The seller is close to 90 years old, has 3 children, and, having owned the building for 60 years, likely has no mortgage. She does not seem like a very technical investor, so my gut says she's not 1031ing it and will likely get hit with a pretty big capital gains tax bill. She does have an accountant son-in-law, so he might be able to help her understand why my offer benefits her estate planning needs.

I'm playing with the idea of a master lease option contract that it is intended to outlast the seller. (Obviously I would need this binding on successors and heirs.)

My thought is that if the seller dies before I can execute my purchase option and the asset passes to the children (preferably through a trust to avoid probate delays), then they would have a stepped up basis and therefore avoid or minimize capital gains tax when I buy them out.

Is this a feasible deal structure? I'm assuming I need to tread carefully here. What should I watch out for, and what do I not know that I don't know?

What are some things I should take into consideration from a marketing perspective? Obviously drawing attention to someone's proximity to end-of-life can be a sensitive area.