Possible for seller financing when property is in Estate

[Ethan Miller]

I have found a 4-plex property that is being sold. The owner has past away and the property has been placed into an estate. I have been able to contact the daughter that is currently in charge of the decisions and said she just wants to off load this property as she has been self managing since he has passed and doesn’t want to deal with it especially since she lives about 3+ hour drive away. Another part of info is there are 8 heirs to the estate and she said it does have a small mortgage on the property.

Is there a way or an easy way to do seller financing with this situation? I tried to explain the tax benefits but she said when it is in an estate there are no taxes to be paid. Is this true as I have never worked with an estate before?

Looking for any tips or suggestions. Thanks!

[Lynnette E.]

The cost basis is reset on the date of the owner's death.  So there is no capitol gains due.  When the property is sold they will actually have a loss to report because they take the value of the property on the date of the owner's death and can subtract commission, closing costs, etc.  This loss may be enough to even "offset" the rental income the property generated.

So yes, she is likely correct.

I managed my mom and dad's estate and Trust.  There were 11 heirs.  Some of the heirs may be willing to take a monthly payment, but there is no way someone dealing with an estate will want to drag the closure of the estate out, and especially with many heirs.   And it is also not likely that all the heirs will want a monthly payment.  

You need to find a money partner.  Settling someone's estate is not easy and dealing with multiple heirs who want their share yesterday is difficult.  So to not loose this deal, find a money partner...even if it is a loan for 3 years and a balloon payment.