Need a little creativity to close off market duplex in San Diego

[Twana Rasoul]

Hello BP,

I’m trying extremely hard to get creative enough to make a deal work for seller and their family here in San Diego (lead came from hand written cards FYI). My wife and I would really like to owner occupy one side of this duplex. Quick details:

- Seller’s owns it solely by herself in a trust since (husband passed 6 years ago). Owned it since 1980s.

- Free and Clear

- Property needs work and only one side is occupied currently, seller not in a rush to sell but not too fond of keeping it as a rental any longer (most of her sons feel the same way).

- Seller wants to sell it to me but doesn’t want to be hit with a big Capital Gains. Seller is thinking they are better off to pass away and then for the kids to sell with no Capital gains due to step up in basis.

I’ve offered seller financing, 30 year with balloon in 7 (hoping that whatever capital gains they would be hit over the time period I can make up to them even more so through interest payments), I still need to send them the break down of how much they will make through this method in total. The family doesn’t seem too crazy about carrying back the note however.

Are there any other creative methods anyone else has done in this situation? I would like to find a route that will get me the property but to make sure at the same time the seller and family doesn’t get screwed over on their taxes through any misunderstandings.

Hope that makes sense.

Thanks in advance,

TR

[Twana Rasoul]

@Mike M. Thank you. I’ve been studying up on this...I’m going to present it as an option. Was just worried that somehow CA would still consider a lease option renewal as a transfer, thus triggering capital gains. Sounds like if I take your route, I pay theme rent and then exercise my option to purchase on pre agreed to price after property is passed to beneficiaries so that they will inherit and then sell on a stepped up basis?!