How to Structure Multi Generational Property - California

[Mark Huang]

Hello BP!

Looking for some advice on structuring property holdings.

Background: my grandparents bought several properties throughout California. When they passed it went to my mom and her 4 siblings. There's two MFH that are tenants in common and one SFH that's in a partnership. My mom and her siblings were never interested in growing it but I've always loved real estate and want to grow it to an empire to support my family for generations to come. I offered to take the lead and everyone seems open to it.

Problem: how to legally structure the properties? There are 12 cousins in the next generation which is a lot of owners. I'd want to operate a mini REIT. My goals:

-Pass property down without reevaluating property taxes

-allow members to be bought out without triggering property tax re-evaluation 

- provide liability protection for all owners 

-being able to take loans out against the property and buy more property 

-make regular payments to owners if they want it.

Solutions: from my research, we have to keep passing it from parent to child using trusts to keep the property tax basis. If anyone eventually wants to be bought out, we'll have to change the title and reassess property taxes. I see this being inevitable when one person wants out. If we have to change the title, we get a fresh start to move it into another ownership entity. Would the best choice be move them into corps? You can exchange shares in the Corp without reassessing the property taxes? I understand a Corp brings a lot more complexity and taxes but it Seemed like LLC interest can't be passed generation to generation.

i know people are already doing this and this isn’t anything new. There must be a right answer! Thanks in advance for any input. I love learning about this stuff!