Pitching Seller Financing for Estate Planning

[Marc M.]

Hi Folks,

I'm wondering if anyone out there can help me get the 30,000 foot view of how seller financing could be an advantageous route for estate planning? My father in-law owns a 3-unit rental property that he's had for 40 years. He's kind of an old-school landlord and the rents are a bit under market rate. I would like to pitch a seller-financing deal that would keep the monthly income the same for the in-laws, but allow my wife and I to go in and increase rents and monetize the property through other means...like sub-metering the water, strategic improvements etc. There is no question that this property will be passed on to my wife or her brother, but that might be another 15 or 20 years....and I'd imagine it would make more sense for my father in-law to sell his property to his heirs over time than let it go through his estate as a taxable item. It's better to leave this world with fewer assets, right? Has anyone had experience with this scenario before and provide an example of the tax benefits of spreading out a taxable sale over time (as opposed to buying it outright now, or waiting for it to be passed on as inherited property in the future)?

Best,

marc