What type of loan is best for this situation/advice?

[Daniel Dietz]

Hello,

A family member has a somewhat 'unique' situation coming up dealing with an estate and I thought I would jump in here to help them get some advice.

Situation is this; they (family member) are one of three siblings who all were given equal shares of a paid in full home when the last parent passed away. The other two siblings have no interest in the house and are willing to sell their 'shares' for a very fair price. The house is 'assessed' for tax purposes for about 90K. It would honestly need about 10K-20K of work to sell for that price. 

Let's say for 'simple math' that the three of them agree that it is worth 54K as it sits, or 16K per sibling. So it would take 18K * 2 = 36K for the third sibling to buy the other two out. So, in theory, they would be able to be 'all in' or 36K purchase + maybe 14K of rehab, or a total of 50K for a house that would then be worth about 90K, leaving them with about 40K in equity. 

How would conventional lenders see their 'skin in the game' in this situation? I know that in most situations a borrower would need to bring in a share of 'down payment'. But in this case, does at least the 18K of already owned equity play a role towards that requirement? 

Thanks, Dan Dietz