90 Year Old with a Dead House - 550k - How to Structure

[Timothy Michael Mick]

I have a 90 year old friend with a triplex. A few years ago, a pipe broke in the upstairs. She hired a family member to fix it but ran out of insurance money before he could complete it. Now the building is sitting there, down to the studs:

-550k House ARV

-3 units rental at $4500 to $5000

-140k owed on a mortgage

-105k renovation cost

Requirements:

Her

-No capital gains tax for entire sales price

Me

-Buy and hold

-Deed in my name upon her death

-Low Down, Monthly payment 2k to 3k

What is the creative way to structure this deal so that these requirements are met?

Here are the issues I see with standard ways of structuring this deal:

-Subject to existing financing – deed transfers immediately and she has to pay capital gains

-Executory Contract (Land Contract) – the deed does not transfer upon her death but goes to her family. The biggest risk to me is being taken to court by her family who will inherit the deed.

Is there some creative way such as setting up an irrevocable trust so that upon her death, I inherit deed to the property and her family inherits a note to what I still owe? (The issue I see with this is that 1. Capital Gains tax is triggered upon transfer of deed and I have to pay. 2. Due on sale – from mortgage (or could I inherit the mortgage as well)).

Any advice is helpful.