How to buy Grandmas properties?!?!?

[Jason Glenn]

First off I'd like to say thanks for the many invaluable post and disscousins on the bigger pockets forum. I am a long to reader and a first time poster. with that out of the way I have a thread of questions.My grandmother has spent a life time buying rental properties to live off of in old age. she is by no means a day investor, she just did what made sense. As she is coming to the age where she needs to start consolidating her properties. I told her I'd like to buy them from her. in short what's the best way to go a out this. all properties are clear and free. she owns them 100% there are 5 single families and 1 duplex. she uses the monthly rent to live off of. what is the best way to structure a deal where she can continue to use the monthly income essentially till she passes? Also I live out of state. so my concern would be, should i set up a LLC and start my real estate empire that way? should we do seller financing and I raise rent on the tenants and take the difference as cashflow.... I'm lost and need help. any ideas would be greatly appreciated.

[Mitch Messer]

Hey @Jason Glenn. I'm not a huge fan of buying from family. There's an unavoidable conflict of interest: Grandma should be trying to get top dollar, while you are looking for the best deal you can get. Not only that, but if you've got cousins you can expect to hear how you "stole" those great properties out from under from their favorite Grandma, regardless of the sale price. Not worth the hassle.

Rather than buying Grandma's properties, you might consider helping her sell in a way that can give her everything she wants. Use this as an opportunity to flex your deal-structuring muscles. For example, you might get her under contract (to establish your interest as a principal in the deal) and then attempt to wholesale the properties as a package. If the sale proceeds have to last the rest of her life, she'll want to make absolutely certain she's exploring all her options (not just the ones that work better for you).

Also, be mindful that Grandma is going to need serious taxation, asset protection, and estate advice, at very least. So, help a granny out and make sure she's got a team of competent and attentive advisors!