Too Complex -- Looking for Help

[Clay White]

First post to the forums, and I'm sitting on a puzzle.

My wife is concerned about her father's financial position and thinks we should buy his condo. He's 82 and agreeable to selling. Average of the last year's sold comps puts the value spot on $300k. He has a mortgage at 4.125% with a 90k balance, a monthly P&I payment of $895, and 17 years left to pay. 

He's willing to sell at a reduced price, reflecting the equity that would be hers if he passed abruptly. However, she has two other sisters who are equal 1/3 stakeholders in the equity. He's agreeable to us assuming the existing mortgage. He would live in the property until he passed (or required full-time care), so we won't see returns from rental income, just appreciation and principal pay down.

I gotta admit -- there's too many moving parts here for me. How do I structure a deal that respects all the stakeholders and still produces a (potential) return? How do I evaluate returns at various price points and under complex financing structures? I've labored over homebrew spreadsheets and online sources for a couple of days, including Dave Meyer's Total Return calculator, to no avail. My other deals have been boring, on-market, house-hacked SFHs and a small multi. I'm simply out of my depth here.

I'd be grateful for any thoughts.

[Ashish Acharya]

@Clay White Selling below market value could trigger gift tax reporting (Form 709), but taxes are unlikely unless exceeding the $12.92M lifetime exemption. Buying now forfeits a potential step-up in basis, increasing future capital gains liability. Rental expenses won’t be deductible while he lives there rent-free. Work with a CPA and attorney to structure the deal, handle gift tax issues, and formalize agreements. You should get loan and wait for this property to pass with step up basis if you want most efficient tax impact.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.