Buying out family members on grandparents' house for F&F

[Ashley Benning]

My grandparents left their home in Northridge, CA to my mom and her two sisters. My aunts cannot afford to put any money into the property, and it is in desperate need of repair and update. It survived the Northridge quake, but has some damage still (grandparents needed the FEMA money to survive, and couldn't do the repairs, apparently).

I would like to buy my aunts' shares of the property, then rehab and sell the home. My mom would be a partner with her 1/3 share.

Is it possible to get a HML to buy out my aunts and finance the renovations, do you think? And how would that work? Do we need a realtor to literally SELL the full property to me and my mom, or can I just do some sort of transaction with a contract where I purchase just my aunts's shares? I have no idea what this would look like. Anybody ever done anything similar?

For those interested in the numbers, the home is 3 bed 3 bath, 2280 sq ft with pool on .4 acres. I estimate it is worth about $600-650k in its current state (kitchen doesn't work, my grandparents were hoarders... It's just a bad situation), but ARV is probably $850-900k.

[Mindy Jensen]

@Ashley Benning , you do not need to involve a real estate agent in such a closed transaction, but you would be wise to cover the cost of a real estate attorney to draw up the papers so the aunts don't feel slighted now or come back later and try to claim some portion of the sale.

Family is great, but money does strange things to people. Get it all legal and squared away before there is significant money and your time involved.

Have you talked to your aunts about buying them out, rehabbing and selling? Are they on board with your plans? 

Goings from your extreme numbers, let's say it's $600k now, and sells for $900k after rehab. That's $300 profit, would they feel like you stole something from them? (Like I said, people get all weird when you add money into the mix, not trying to talk smack about your aunts.)