Financing options to purchase family inherited Single Family Home

[Michael Alarcon]

The situation is complex. 

My Aunt K inherited a single family home with her two brothers. My aunt K wants to purchase the home from her two brothers as she's currently living in the property. The main reason for the request to purchase is to get the brothers their cash value (she feels it's the right thing to do asap, ~$60k ea.). With the current market conditions, Aunt K would have to pull out retirement funds for either down payment or cash purchase. The siblings all agree on a well below market value of the home (~2/3 appraised value, ~$180K). Aunt K is hesitant to pull any retirement funds out, as she should. She reached out to me because she knows my interest in Real Estate. I purchased my first SF rental ~ in Q1-22'. I would love to help her out but don't know the best way to go about this. 

Only options I see, I purchase the house and all siblings receive their portion. This would leave me with a mortgage that I'd request Aunt K to assist fulfill completely to be a wash until she's ready to move out. Other option I suppose is available, purchasing the home for ~120K, leaving two brothers paid out and Aunt K living in the home. Since her portion isn't paid out, I wouldn't mind paying partial mortgage until she decides to leave. The ultimate goal would be keeping the home for my Aunt K until she decides she no longer wants to live in the home. At the same time it's a property that stays in the family and in the future, can be rented at market. I'm sure there's tons of options outside of these two scenarios. What's your input? Any suggestions? Thanks a ton.For

  For my personal details. I can afford a 25PCT downpayment. I have investments totaling well over the purchase price of the home. I don't feel comfortable liquidating investments in current market but it's best solution, I will hear it out. 

Thanks

-Mike

[Kaiser J.]

Based on your description of the situation she will not likely need a down payment. If it appraises for the market value you describe then she can apply for the $120k loan, with proceeds distributed to her siblings. The siblings can then remove themselves from the deed. All of this can be done at once, with the attorney that closes the loan. 

This will leave her with a monthly mortgage to pay, but it sounds like she is comfortable with that from your other scenarios.