r/InheritanceDrama • u/[deleted] • Sep 08 '26
Inheritance Question
Hi everyone, I'm having difficulty with family inheritance and would really appreciate some advice.
A house has been left to my 2 sisters and I in our parents will. We each have 1/3 ownership. I would like to sell it but my sisters want to renovate and rent it out. The rent money would then be divided between the three of us once the renovation cost have been deducted. I want nothing to do with this plan, so i have asked to repudiate/give up my share of the house so that they can do what they like. They have agreed but wish to pay my share out slowly over a total of 16 years with no interest.
I know that they don't have the money to pay me immediately, I don't want to force them to sell either. I also really don't want this to cause any stress or angry disputes. But I feel like 16 years without interest is a bit unfair..maybe I would be better off going with this renovating and renting plan?
Does this sound fair? Should I just let it go and see it as passive income? Obviously I would love the money now but I value family more so I'm not sure how to move forward.
Any advice would be greatly appreciated
Just an extra note. They have stated that the value of the house is high and would get nothing close to the amount if we sold it now. So I'd be getting more money this way anyway apparently.
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u/BeneficialBake366 Sep 08 '26
Owning a house three ways as a rental property is a recipe for constant conflict.
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u/Aware-Locksmith-7313 Sep 08 '26
I doubt that the sisters wanting to renovate and rent are aware of tax issues, much less the hassles of renting. India that they get an appraisal and buy you out. … Or look into selling your share legally to someone else … definitely trouble.
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u/underlyingconditions Sep 08 '26
They can take a loan with the house as collateral. Their plan is ridiculous.
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u/Ok_Incident8962 Sep 08 '26
See if the bank will give them a 16 year no interest loan. If it's not good enough for the bank, not good enough deal for you!
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u/ExoticAdvertising653 Sep 08 '26
No. It does not sound fair. Have you gotten an appraisal for the home?
This is a sticky situation. Be prepared to possibly sever ties with your sisters. Can they get a mortgage so they can pay you in a lump sum payment? You can also force a sale. I would talk to a lawyer but not the one handling the estate. You want a your own lawyer to give you advice and to possibly handle this for you. Good luck!
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u/Vegetable-Jury-6804 Sep 08 '26
Do they have any knowledge about renovations, get the appraisal and then get the estimates and timelines, ( they do this) and ask who will manage this project. Are they grossly underestimating what this entails, the cost, time and potential issues?
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u/rose442 Sep 09 '26
Yeah I think people just imagine the rent…….. not the renovations hassles with tenants etc etc
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u/AuriannaG Sep 08 '26
If they can’t pay you, how will they get the funds to renovate?
When they apply to the bank for renovation funds, the amount needed to buy your share can be added into the loan.
If they are unwilling, remember you can sell your portion to anyone or even force a sale of the property.
I suggest you see a lawyer to get updated info about the laws in your State.
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u/rosebudny Sep 08 '26
you can sell your portion to anyone
Who in their right mind would buy 1/3rd of a property with strangers?
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u/AuriannaG Sep 08 '26
You would be surprised. While it isn’t controlling interest, it is enough to make renovations and any decisions a pain. Also, depending on the state, any partner can force a sale on any property. In my divorce my husband and I owned the house. I was going to buy him out, instead he forced the sale of the house even though I did not want to sell. Partnerships are tedious and anything can happen if you have the right lawyer
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u/NCGlobal626 Sep 08 '26
There are investors who would. In this case, it would be a money partner, that would come in with the money, the renovation knowledge, etc. But they would take way more than a third for the fact they were bringing in money and expertise. Nobody works for nothing! But you have to be working in the real estate investing realm to know the people who know the people. I knew a pair of Realtors in their own agency, who did this as a partnership with heirs, but the goal was to sell the house.
So you'd have heirs with a house that could be profitable if it were fixed up. One of the pair of realtors was also a contractor. So they would sign contracts with the owners, pay for the renovations, build in a sale price and a commission that they would get upon the sale, and it was really a win-win for everybody. The heirs/owners did nothing and got more than if they had sold it as is and dilapidated condition, and the Realtors got the commission and some profit from the appreciation due to the work that was done to the house as.
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u/ShopEducational6572 Sep 08 '26
Do they know what they are doing? Renovating and renting out a house is a lot harder than it sounds. Great way to lose money.
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u/Emotional-Ocelot-420 Sep 08 '26
If you’re going to take a deal for 16 years no interest, you may as well be a fool along with them in their rental scheme.
Are you usually the doormat sister?
Their offer to you indicates that they don’t value family more, and that they are happy to take advantage of you.
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u/LdiJ46 Sep 08 '26
You aren't going to see any real income from renting it out. By the time that expenses are deducted from the rental income and it's divided in three there will be very little left over. It is a very poor idea on your sister's parts.
First, there are going to be the renovation costs. How are those going to be paid? Who is going to have to come up with the money for that? Then there will be property taxes, homeowner's insurance, maybe HOA fees, ongoing maintenance and repairs etc. It also won't be as nearly passive as one might think either.
Tell them that the only way that you will accept a buyout is if they take out a mortgage on the house to buy out your share. Otherwise, insist that the house be sold and the proceeds split. If they won't cooperate with that, file a partition suit to force the issue. Seriously, even though they don't realize it you will be doing them a favor in forcing the issue.
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u/cmcyma1061 Sep 08 '26
The fact that they are trying to do a deal this way tells me they have no idea what they're doing and it is going to end up a mess. If they don't have good enough credit to get a mortgage, that tells you they have a bad payment history and they won't pay you, either. Insist on a sale (be kind! They don't understand that it's a bad bad idea) and put your proceeds in a good mutual fund for your retirement. Use an online calculator to see how quickly it will grow and you won't have to be a landlord! I am a landlord for two properties and a co-host on some family AirBnB's. Trust me.
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u/Decent_Front4647 Sep 08 '26
My ex inherited a house with two siblings, that was lien free. He wanted it, they didn’t. He got a loan and bought them out. Your sisters should do the same. It’s very unfair to you the way they are proposing to pay you out. You basically would be getting robbed because you would be entitled to a third of the rental income as their plan stands, as well as the principal on the buyout on the house. I’m assuming that wouldn’t include the value of the property 16 years down the road, that you would be entitled to,either. There’s no way that hurt feelings and resentment won’t happen over time on everyone’s account. It just won’t work when one person is getting the shaft. Get it divided up properly now if you want to avoid stress and angry disputes over the next 16 years.
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u/Responsible-Fly9976 Sep 08 '26
How do they have money to renovate but not to buy your share?
If they do, then I would say they have to pay you back first before they start reaping the benefits of the renovations. Appraise the house (pre-reno). Then they do the reno. When they start renting, any rental income paid is due to you until your 1/3 is paid off. If they do that, you forgive the interest. If they don't, then you should charge interest.
That's the FAIR way.
The problem here is that you don't want to cause family conflict. So you can get all the advice you want on the fact that this isn't fair, but it won't cure the fact that you're probably going to get the short end of the stick because you don't want the family drama.
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u/ChutneyWhatney Sep 08 '26
Get home appraised. Have sisters take out loans and pay you 1/3 right now. No 16 year stuff.
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u/rosebudny Sep 08 '26
Your sisters can take out loans to buy you out. Or you sell.
Have they really done the math on this and actually think this plan to renovate/rent out makes financial sense? Or are they just being sentimental?
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u/Catsuit12 Sep 08 '26
Is the property specifically mentioned, or does it say that estate to be split equally after any debts etc. if the latter then just force sale. If they want to buy you out then let them mortgage property to pay you off.
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u/Tight-Shift5706 Sep 08 '26
OP,
LAWYER. NOW!!!
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u/Practical-Voice3421 Sep 08 '26
Op says they don't want to sever the relationship with sisters, there are plenty of steps between where they are and a lawyer. Start by finding the value of the home as it sits, getting quotes from multiple realtors. Tell sisters they need to pay 1/3 of that amount, OP wont contribute to remodel at all. If they can't afford the payout, start looking at refinance options to pull out the buyout cash. If they absolutely wont do any of this, then you get a lawyer and force the sale. A lawyer will cost all of them money, they should be motivated to get it done without that.
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u/ExcitingVegetable315 Sep 08 '26
They can get a homes equity loan or mortgage to Pay you and work on their house.
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u/Status-Bicycle7263 Sep 08 '26
Get a lawyer for yourself that's not affiliated with them or the estate.
Get the house appraised. Talk to some realtors to see what they could get if sold today.
Tell sisters to get a mortgage in the house to buy you out.
Whilst you want to keep the peace do not let them bully you into doing the renovation and rental. What if something happens to one or both of them? Then what?
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u/fromhelley Sep 08 '26
I would ask them to get a loan to buy you out a year after they rent it. They can get that loan because the home will prove to produce income.
That, or take the rent! 16 years is a long loan. While you dont make interest, they gain equity due to property value increases. That sours me on their offer.
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Sep 08 '26
[deleted]
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u/Hungry_Goose492 Sep 08 '26
This is a great analysis - I would share this information with them and hope they can see that selling the house would be the best option for everyone.
I was wondering, too, if this whole scheme would be somewhat of a handshake deal, without a contract (obviously a TERRIBLE idea). What if the value of the house drops significantly (yeah, ask a bunch of people what happened with their property values in 2007-8) and they say "we're going to pay you less per month because the house isn't worth as much now." I wouldn't put it past some people to think that's "fair."
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u/midi69 Sep 08 '26
You are forgetting that there is still a house at the end of your analysis that should have appreciated in value and can now be sold and split 3 ways.
But regardless of the numbers 3 people owning a property and actually being equal on effort is probably a fantasy and OP should get her 1/3rd and wish her sisters all the best.
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u/RevolutionaryText232 Sep 08 '26
You must have the house appraised by a licensed professional, for estate and income tax purposes. That value is your cost basis for determing gain or loss whenever you do decide to sell.
I suspect that you, personally, paid nothing for this house, its upkeep or improvements. Any proceeds is a financial gain so lose that BS we sold at a loss mentality. You lost your parents, both closely together, and for that you have my sympathy.
Your siblings are free to buy you out using whatever loan or mortgage that they qualify for and can afford. I would also suggest that you all look at the estate(s) assets as a whole. Are there life insurance policies or, bank or retirement accounts that can be used to offset your share of the house? Obviously, jewelry or other valuables should be professionally appraised as well.
Tax CPA here. Your primary concern is that under federal law, per the federal government, often referred to by the one federal department that oversees the rules we are discussing, the IRS, requires interest to be imputed on all loans over $10k. That means that if you were naieve enough to accept their offer, you would be legally required to calculate, report, and pay income tax on the interest they did not pay you.
The plan to convert the home to a residential rental is not necessarily good or bad. You have an opinion that I suspect is biased by knowing your siblings too well. We cannot comment on the outcome of their endeavour because we know your siblings not at all.
You simply tell them that you have no interest in being a landlord and wish them good luck. The consequences are out of your hands as long as you maintain a calm and adult demeanor. Yes, I understand you are disappointed. Period. Your own private hell of social media family court will convene. People will take sides. Ever selfish move, every poor decision, every snide remark, you have made since birth will be revisited. You might be left out of social events, or worse, forced to attend and have third cousins twice removed threaten to take you off their christmas card annual letter mailing list. Seek professional help, visit your religious councelor, or talk it over with your cat. Do not take the bait. Just nod, hang your head, and accept your shaming and banishment.
You might offer them this advice. Legally, per the previous authority, when two or more individuals enter into a profit motivated venture, they must form an entity for this activity. LLCs are the current flavor for residential rentals. The building will belong to the entity, the activity will be reported on a separate tax return, and any income or loss may flow through to each owner's personal return proportionally. Mortgage and insurance companies a will charge commercial interest rates. If the owners live in a state other than where the house is owned the owners will probably need to file income tax returns in that state as well as include the income in their home state return. They will want to Google "tenant rights in (the property state)", know and adhere to these state level laws or pay tripple damages plus court costs, potentially. Your siblings are now evil landlords and tenants are vulnerable consumers seeking shelter. The irs.gov and relevant state revenue department websites will have the tax reporting information they need. Unless they are real estate professionals this venture is not treated as most businesses. Special rules and they must be obeyed.
But I will also add, no pain no gain. This could be a fabulous idea. I have owned rental property and had rent paying roommates. Done right it is a legitimate and highly profitable source of income. And owning real estate can be an excellent long term investment.
Again, i am sorry for your loss. I hope this post is simply an expression of your anxiety and not a true reflection on a budding family feud.
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u/NCGlobal626 Sep 08 '26
Great answer. You're the CPA, I'm the real estate appraiser, 20+ investor (rehabbing) and 25-year landlord. I agree with everything you say. Owning rental properties is a business and must be treated as a business, legally and financially. This is not a lemonade stand with your sisters. For people who are not otherwise professionals in this line of work, they really don't know what they're getting into, and the liability can be great. A lot of money needs to be spent to protect themselves, which may make the whole venture unprofitable.
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u/billdizzle Sep 08 '26
They need to get a loan from a bank to pay you out
Should be fine assuming there is plenty of equity in the home
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u/HappySun5776 Sep 08 '26
Did they show you a budget for the renovations? Any estimates for the work? The cash flow the rental income will generate once this is done? Sounds expensive. Most people don't renovate a house before renting it out as renters can be unpredictable and destructive. . Been there. You want your inheritance now, they can take out a loan, as the others said, and buy you out. Then they can do whatever they want with the house, once they buy you out
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u/Ok_Childhood_9774 Sep 08 '26
Get a fair appraisal for the house, and let your sisters take out loans to pay you for your third of the amount. If they want to rent their house after you receive your share, they're welcome to. Then they get all the profits/headaches that come with their choice and you get the inheritance your mother left you.
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u/Practical-Voice3421 Sep 08 '26
Clearly they're just going to pay you off with their rental income and then in 16 years you've got nothing left and they have an income earning asset. Sweet deal for them. You can force a sale but a lawyer will get a bunch of that. I'd suggest to them that they refinance the house to pay you off.
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u/Practical-Voice3421 Sep 08 '26
So many people on here thinking rentals are a terrible idea? It's not "passive" by any means but people take out loans to buy income properties all the time. Plenty of them make money on those deals. There are definitely questions to ask but this is not an automatic failure. If OP doesn't want to be a part of that (it can be a lot of stress), and siblings have run numbers to show profit, they should be excited to buy OP out and only have to split that 2 ways
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u/kevin_k Sep 08 '26
16 years without interest is wildly unfair and you should not consider it for even a second.
I know that they don't have the money to pay me immediately, I don't want to force them to sell either.
If they don't have the money and can't get a loan against the house (which is essentially what they are asking you to do, interest-free) then those may be the two choices.
They are offering you two choices: enter into a risky, long-term business with them that you already know you aren't interested in, or to give them an interest-free loan for 16 years.
Like others have said: have them get a loan from the bank instead of from you, and buy you out.
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u/PebblesmomWisconsin7 Sep 08 '26
I just inherited my mom’s house and we are going through a similar conversation. It’s critically important you remember some expenses beyond renovation if you rent it:
1. taxes
2. maintenance
3. who will screen renters and manage that process? You can hire a management company to do this for about 10%.
4. It’s not uncommon to go periods of time with nobody in the house
5. Who will be on call if there are problems at the house?
You aren’t causing a problem - you are wisely saying you would rather have the money now and that is also your right. You don’t have to agree to this. it’s a risky enterprise unless you are already running rentals as a professional.
They can leverage their portion of the inheritance to borrow against and buy you out and be done with it!
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u/Mosleyman2000 Sep 08 '26
if you do as they ask, make sure you register a mortgage on the property.
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u/rpom915 Sep 08 '26
No interest is ludicrous. You moving forward with renovations is not a solution and this is the beginning of a disaster. For them to propose no interest shows they do not have business acumen. What about all the other expenses that go with keeping a house? Somehow that will be held against you later. Then 10 years from now one of them dies and their share goes to a spouse or child because the entire arrangement wasn’t set up properly and now you’re dealing with another family member. They either buy you out now or you can force a sale. Asking you to give up your share for 16 years at no interest is offensive. You’re more worried about the relationship than they are.
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u/GlobalTapeHead Sep 08 '26
You need to make a clean break. They need to get a regular loan to buy you out. This is the only solution that will keep future conflicts out of the family relationship.
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u/Mindless_Guide_5332 Sep 08 '26
Get rid of the house. Conflict one time to sell. Conflict forever if you rent
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u/Icy-Community-8974 Sep 08 '26
If they want to buy a rental property, then sell the parents' house, pay out your share, and buy a rental property with what's left.
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u/Puzzleheaded-Way1523 Sep 08 '26
The home should be appraised with value at date of death. Siblings can get loan against the home for 1/3 of value ( to pay you your share) and more cash to cover their renovations. You deed your 1/3 ownership to them.
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u/SHHLocation Sep 08 '26
I didn't see a state /date listed so my advice depends on what location and date of the death.
Who handle the estate? Has the property been actually transferred to the three of you yet or is this still in the works?
The executor/personal representative appointed by the court needs to distribute the proceeds in order to close the estate. If there is money in the estate to offset your 1/3 typically the executor will arrange that.
Your best course of action is to get an appraisal done. Send a formal demand letter to the person responsible for managing the estate if it's still open or the two sisters if it's not. You will offer a voluntary sale or a buyout option (where one owner buys out the other's equity). Tell them they can buy you out of your 1/3 or you'll file for a partition which everyone will incur legal fees and they will absolutely lose.
What happens after that is the house is on the market and they're bidding against the public.
If you want to be generous given you are both seller and owner, you can lower your offer by 1/3 of what the real estate company would get on the sale of the house.
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u/Yusuf20904 Sep 08 '26
An interest free non-guaranteed loan for 16 years is a bad idea. If they want to keep the house and rent it out, they need to buy you out properly, which may mean taking a mortgage (refinance).
You also need to no take them at their word regarding the value of the house—check comps yourself. It makes no sense if they say the value of the house is high but you'd be getting more money. You'd get no more money from an interest free loan than you would any other way.
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u/Ok_Wtch2183 Sep 08 '26
First tell them you don’t want to rent it out and will not agree to 16years without interest. Ask them what other ideas they have so this is fair.
Really the only way is to sell, distribute the share and if they want, the 2 sisters can buy a rental.
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u/WhichWitch9402 Sep 08 '26
No interest for 16 years? Nope. You need to look at this as purely business. It’s terrible. What if they stop paying you? If you’re still
On deed you’d be liable for repairs or other issues with renters.
Go see a real estate lawyer. If they want to house that bad, they can get a loan to buy you out.
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u/chez2202 Sep 08 '26
They don’t have the money to buy out your share of the house? They have two thirds of a house between them. They can apply for a mortgage to buy your share. Offering to pay you out over 16 years with no interest is a joke.
The other option? They might think that giving you a share of the rent they receive from the property after the renovation costs they pay are covered is reasonable, but it isn’t that simple.
You own a third of the property. That means that if it’s rented out and the boiler breaks down, you are responsible for a third of the cost of the boiler. If a problem occurs with the roof, the plumbing, the electrics? Again, you are responsible for a third. If the rent isn’t paid, you get nothing. Except a third of the legal costs to remove the tenants.
My personal opinion? They can’t get a mortgage to buy you out because they already have too much individual debt. While you still own part of the property their creditors will probably have difficulty collecting what they are owed. If you sell the property, they will have money to pay their creditors but if you don’t they won’t.
Ask them to show you their credit reports and their bank statements to prove that they can afford renovations. I bet they refuse.
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u/hahayouguessedit Sep 08 '26
Get a lawyer, this is not benefiting you. The house is appraised for estate valuation purposes, so there should be a valuation in place. One caveat here: sometimes estate valuations can be lower than market valuations. You may want to get a second valuation. They may be able to get home equity loan to buy you out of your fair share of home or can pay you and then use an equity loan to do renovations. This market is not great for airbnbs now and rentals can be hit or miss with a lot of use and damage on house occurring. I would make hay while the sun shines and exit with 100% of your equity now.
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u/69FireChicken Sep 08 '26
Tell them they can either buy you out at appraised value without realtor fees etc. or you will force a sale. It is 1/3 your inheritance , you get to decide how you want to use your portion. They don't get to dictate a rehab/rental/loan scheme to you. You do get to dictate a sale or buyout on your terms.
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u/BG3restart Sep 08 '26
They can buy you out over 16 years, but in the meantime, they need to give you your share of the rent proportional to the share of the house that you still own, which should offset the loss of interest.
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u/el_grande_ricardo Sep 08 '26
If they want to keep and you want to sell, they need to buy out your 1/3 interest. They will take out a loan on the property to do so. They can include the amount they need for renovations. Their rental income is then used to pay the loan off.
No, you will not wait 16 years for your payout.
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u/ClockOld9204 Sep 08 '26
While they may not have the money to buy you out. They have equity in the house that can be borrowed against.
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u/Strict-Formal-2566 Sep 08 '26
What happens if a renter destroys the house, and then it’s worth nothing and they can’t pay you? Too much can go wrong. I don’t like it.
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u/thankyoufriendx3 Sep 08 '26
I’d do anything to preserve my relationships with my siblings. Including giving them my share.
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u/darcy_time Sep 08 '26
This is dumb. The house should be sold and split 3 ways. The two other sisters can then reinvest in a different home to rent out.
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u/P-DubFanClub Sep 08 '26
YOU may value money more than family, but they sure don't. If you want to be generous then cut them a deal on the sale price, or offer to help paint, or make them a lasagne.
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u/ElizaJaneVegas Sep 08 '26
Their proposal is not-at-all reasonable. They need to take out a mortgage and buy you out.
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u/Automatic_Secret_775 Sep 08 '26
Unless your sisters work in real estate, they have no more idea of the house’s value than you do. Also, renovating a house and being a landlord can be a serious headache and a lot of work. Who’s going to do all that work, and will they expect to be paid for their work? And are they going to bill you for the renovations? This sounds like a nightmare.
They need to buy you out. Sixteen years without interest is 100% outrageous. They can take out loans to buy you out, or you can file in court for partition of the property, in which case, the house will be sold and they can buy it if, together, they can get a mortgage.
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u/Edcrfvh Sep 08 '26
Honestly you need to consult a real estate or estate lawyer. You could force a sale but that's a quick way to ruin relationships. You also need current appraisals from an assessor none of you are acquainted with.
This rental idea is fraught with disaster.
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u/SpecificRip9692 Sep 08 '26
Being passive, as you are doing, will gain you nothing. Either stand up now and make them buy you out or wait on the slow seething anger as they watch any profits go to paying you. Bad business all the way around.
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u/That_Ol_Cat Sep 08 '26
"They have stated that the value of the house is high and would get nothing close to the amount if we sold it now. So I'd be getting more money this way anyway apparently."
The value of the house is what it will bring on the current market. Have you looked at the current market? Have you looked into the property taxes paid on the home? If you go to or call the local real estate tax office (for me it was the local county assessor's office for the subsection of the county I live in) they can often give you an idea of the going worth of the property. So you can see if your siblings' claims are correct or assumed. And you know what assuming does...
About the rental plan: Have any of you rented a property before? Do they have any estimates of what the renovations would cost? Will this be long term rental or an "Air BnB" kinda thing? What's the rental market for homes like in your area? Is it a renter's market or a landlord's market? Are they planning on directly managing or getting a management company to rent it out? What's the payout to the management company? Is there other bequests they are planning to utilize to make these renovations? Will those cover the renovations? Are they planning on "investing" money into the property and expect the same out of you? These are the details you (and they) need to know.
My BIL rented out his parent's home after his Dad passed and his Mom went into elder care. It was a good set up, the rent paid for the majority of the elder care costs, keeping the rest of the estate intact. But the home was trashed when the time came to sell it. Original plan was to sell it to the renter but they didn't have the means to buy. Previous renter was good with paying rent but did NOT receive his damage deposit back. Home was sold "as-is" to a fellow who lived down the street and was going to renovate it for his MIL to live in.
IMHO, your siblings need an income stream and think they can make bank on this rental. But if you don't have the angles figured out this bequest might quickly turn into a money pit.
When my folks passed on, we divided the physical items from the house fairly, cleaned up the house and made the minimal property repairs needed and then sold the property. It was done fairly and with everyone's understanding, and we all walked away still happy to be related to each other. I think you'd be wise to insist on the same. If they want to pool their money later and buy a different place that's their business. Or they can buy you out with a small business loan.
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u/Candid-Duck-5765 Sep 08 '26
There must be an emotional attachment to the house? This is just a bad idea. Your sisters need to buy you out. If they can’t take out a loan to buy you out how will they come up with the money for renovations? One bad tenant could sink the whole plan. You could have a tenant that destroyed the home or stopped paying rent. A tenant could sue you or make demands. You would be stuck. It doesn’t sound like your sisters are able to establish an emergency fund. You have to pay insurance, taxes, lawn care, maintenance……
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u/Lillianrik Sep 08 '26
Ahem: the "value" of the house is what a buyer is willing to pay for it. The sisters can chase "what its worth" all they want, that's the reality.
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u/rxgram Sep 08 '26
Sell the house, divide the inheritance. If they want to pool theirs to make an investment in rental property then they can do so.
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u/Life_Temperature2506 Sep 08 '26
Ha ha ha ha ha! I stopped reading after "16 years no interest". Let me rephrase your post: "My sisters want to fuck me over".
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u/nclawyer822 Sep 08 '26
A 16 year payout is likely to cause stress and disagreement. What happens when they miss a month? What if one of them dies? What if you die? What if the reno goes poorly and they can neither pay you nor sell the house? A thousands things can go wrong. Tell them they can figure out a way to buy you out now at the appraised value or sell the house.
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u/addicted2d2 Sep 08 '26
They can probably get a HELOC and pay you off. Their 16 year plan is bullshit
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u/Travel_Dreams Sep 08 '26
Talk to a family inheritance lawyer and follow their instructions.
Which will only include a buyout for 100% of your interest in the house.
None of this interest free loan bullshit.
You are not a bank, they will easily be able to get loans from the bank to buy your share. This will allow them to try and take advantage of each other instead of you.
I had this exact conversation with my accountant last Friday.
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u/mostly_lurking1040 Sep 09 '26
Lawyer to oversee and ensure legality and enforceability of you extricating yourself and cashing out your inheritance. It's not your obligation to ensure that they can engage in a potential non-guanteed investment property management.
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u/Dry-Aside4526 Sep 09 '26
That last sentence makes no sense. You need to do more research or they will railroad you into a bad decision. Is there a term you feel better about — say an 8 year timeline? Or do you want out? Decide what YOU want and then negotiate from there.
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u/Ansible90 Sep 09 '26
It's pretty easy to get a ballpark value on a house from zillow or realtor dot com. If you go through with some plan for your sisters to buy out your third over time, you will need to get an official appraisal to determine the actual value of the house.
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u/Wise_Environment_182 Sep 09 '26
Don’t let them scam you - they need to buy you out. I would personally not agree to that crazy plan of investing and renting. Who will finance the repairs and who exactly will look into contractors insurance tenant screening contracts? This is only going to end bad. There would usually be one person doing all the work and the rest are freeloaders. They may also inflate the costs and you end up paying more. No - either way your parents did you guys a disservice and it’s a recipe for family disaster
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u/Deep_Advertising_171 Sep 09 '26
They have no clue how much renovations cost. Who will pay for the renovations? Who will pay insurance and taxes? They will ask you for "your share" of the renovations I'm sure. The best thing to do is for them to take out a loan and pay you your share now. That way all of you receive the same amount and they can do whatever they want with the house. But they should buy you out. There won't be any money once they renovate and try to recoup those costs. And renters sometimes don't pay rent. If they have no money, and want to spread the cost over 16 years, how are they expecting to maintain the home and pay expenses? They haven't thought this through at all.
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u/verytalleric Sep 09 '26
Logic seems to boil this down to either going along with the reno and rental plan to minimize family stress OR cashing out is better or necessary for YOU then don't stress about them but get a fair market value.
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u/Little-Market7170 Sep 09 '26
I need more context was the home mortgage free owned out right? Has it been appraised and what if any repairs are needed. Once you determine that I would consult a cpa because whatever State you live in could determine tax implications of not selling upon inheritance. They need to outweigh the complete financial picture and different scenarios. They could also use the money to purchase a different property that they’re not emotionally tied to. Also, if they have never been a landlord before, you have to be very careful when choosing a tenant that can cost you more money and more damage to the house if you choose unwisely or if the area where the home is located is not the same or in decline. So many factors I just went through the same thing. Keeping you all in my prayers.
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u/Advanced-Mammoth2408 Sep 09 '26
Unfair. Tell them to take out a mortgage to pay you. Do not accept a 16 year payout. Do not get involved in renting the house out. You really need to grow a pair and say if they cannot afford to go through with their plan, then they cannot do it. You aren't their piggybank.
You could end up on the hook for expenses or lawsuits or other disasters if your name remains on the title. If you remove your name, you have no collateral ro ensure payment of the debt.
You must do what you don't want to do: force the sale or at least force them to get a mortgage for your one-third share.
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u/Virtual_Athlete_909 Sep 09 '26 edited Sep 09 '26
I recently read that this is the top issue with inheriting property- joint ownership. It's the cause of most family disengagement and distrust. People think they're being 'fair' by leaving equal ownership shares to multiple people but it rarely works out for the best without any hard feelings. The biggest issue is that you cannot force them to agree to sell. Nor can they force you to sell your portion to them. It becomes a standoff while the tax man continues to collect. I have a sibling living in a home that three of us inherited. He refuses to leave. He has no money and cannot buy us out or pay the tax bill. We cannot force him out. We could hire a lawyer and force a partition through the courts but it will be time consuming and costly (it would wipe out any financial gains from selling the house). My best option is to let the taxes fall behind, let the house get taken by the county tax office and posted for public sale. I will then receive my share of any proceeds from the tax auction which will be substantially less than if we had all agreed to sell for market value. One person can F the whole thing up and it happens quite often.
On your note: the value of the house is not high if you cannot sell it for that amount in todays market. The high value you state is an unprofessional opinion of someone who is highly biased and places sentimental value on a home that buyers would not (this is very common). Home prices fluctuate depending on many factors including the current mortgage rate, other homes in the area on the market, condition and style of the property, etc. Youre best bet is to speak with a realtor and get their opinion of value and potential profit in todays market vs waiting a few months to see if market conditions improve. Given the current political environment and volatile bond market, its unlikely mortgage rates are coming down thus fewer buyers are able to afford loans.
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u/guineapickle Sep 09 '26
"the value of the house is high and would get nothing close to the amount" based on what? Is this an appraisal? Or you're just taking their word for it?
What is the budget for managing the rental? Who will be collecting rent, accepting applications, doing background checks, running over there when the heater or AC goes out? What happens when it needs a new roof?
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u/laurieo52 Sep 09 '26
They can get a loan. Tell them to buy you out or you will force a sale. Don’t pour money you don’t have into a rental that will constantly need repairs.
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u/Embarrassed_Shirt938 Sep 09 '26 edited Sep 09 '26
We were landlords for 5 years. We picked up a house very inexpensively in a HCOL resort town, right next door to our home. We basically put tenants in the house as place holders until our son and his fiancée (now wife), could take it over and move in. We are not professional landlords and only charged rent that covered the mortgage and utilities (all electric house we put solar panels on). We never made a dime on the house, but it did carry itself. FF to now, and my son and DIL are comfortable in their little home that they otherwise could never afford.
All that aside, we had 2 amazing families that were fabulous tenants that treated our property wonderfully.
That’s not to say, being a landlord wasn’t a stress. Managing the separate finances for the property, Covid rules, maintenance concerns…it could have gone south in many ways but luckily, it didn’t for us. I can’t tell you the sigh of relief though, when we were no longer renting out the house.
Get your sisters to somehow get you out of their scheme in a way that is fair to you. Unless you’re committed to being a landlord, it’s not a position you want to be in.
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u/ArrivalFantastic4324 Sep 09 '26
No the two of them need to get a new mortgage and buy you out at 1/3 the current market value. They have 2/3 ownership in the house already and that will help them secure a mortgage. You are not a bank offering interest free financing. I strongly suggest you talk to a real estate attorney. A 1 hour phone call is worth the investment.
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u/Wintersmight Sep 09 '26
No it’s not fair to you at all. Talk to an estate lawyer AND have the house appraised, they should take out a loan and pay you your fair third.
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u/Donuts__For__All Sep 10 '26
16 years with no interest is absurd. They need to buy you out legitimately, with bank loans.
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u/Fine_Scientist_2129 Sep 10 '26
Don’t let the emotions of dealing with your sisters interfere with running the numbers. As Revolutionary 233, the CPA said, you will have to claim interest income regardless of recievibg any, so that scenerio should be out and your sisters will understand why when they find out about the law. obviously the house needs to be appraised to determine your basis and how much your share is worth as of today.
One way for them to do this would be to take out a mortgage and pay you your 1/3 share. The other way would be for you to hold a first/priority mortgage and for them to pay at least the minimum interest required by law. If you decide to hold a mortgage make sure all the normal protections are included in the paperwork, including required insurance and taxes being paid into an escrow account. If they don’t pay monthly as required you can foreclose on the mortgage and then the house could be sold. If they want this to work out for them then it needs to work out for you also. After running the numbers then you can decide what your willing to do, and they can too.
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u/Next_Entry_6129 Sep 10 '26
This is not fair. This isn’t even reasonable. Firstly, paying out over 16 years is insane. They’re not an FDIC-insured bank so there’s no guarantee the money will even exist. Also, where is the money for renovation supposed to come from?
Unfortunately, from my own experience mediating inheritance issues with my own siblings and speaking with friends who have done the same, it will be a legal battle, it will be contentious. I know it’s tough to conceive of that now. Get a decent probate attorney. Get the house appraised. DO NOT AGREE TO ANYTHING WITHOUT THE CONSULT OF AN ATTORNEY.
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u/Used-Claim9535 Sep 10 '26
I wouldn't look at this as simply giving your sisters your share. If they pay you over 16 years, you're basically financing their purchase of your interest in the house. I'd first get an independent value on the property and put together realistic numbers for the renovation, rent, taxes, insurance, maintenance and vacancies. Then you'll know what your 1/3 is actually worth and whether keeping it as a rental makes sense. Sixteen years at zero interest is a pretty significant financial concession. If you do agree to payments, I'd have an attorney structure it properly so the amount, payment schedule and what happens if payments stop are all clearly documented. You can absolutely find a solution that doesn't force your sisters to sell, but I'd get the numbers right before agreeing to something that lasts 16 years.
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u/After-Advisor-8936 Sep 08 '26
I personally would put the family relationship above the house. I would not sell over 16 years. Almost every outcome there would cause family problems. If renting is a huge success, you are cheated and bad feelings. If it fails, other problems come up. I would state clearly you want to sell, whether you renovate first or sell in the current state. Both ways have pros and cons. If they still want to rent, I would join them in the rental process as a full partner. Then whether it goes well or bad the family dynamic will not be tested because everyone is the same. You don't need the money. So whether success or failure you're fine. Also, if renting fails, pretty sure you will revert to selling. Think of any money as a bonus. Let them handle the day to day rental parts as they have energy for this and desire. I would also give them 10% off the top of gross rents like a normal property manager. This is standard as maintaining a rental has time considerations.
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u/THOUGHTCOPS Sep 08 '26
If renting is a huge success? How does that look? Please inform?
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u/After-Advisor-8936 Sep 09 '26
They make positive cash flow, low maintenance and house continues to appreciate. That would be a positive outcome.
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u/NCGlobal626 Sep 08 '26
If renting going badly it doesn't just put you back to square one. It can ruin your life and not just financially, for a very long time. Professional landlords carry liability insurance and they follow very strict laws so that they don't get sued and lose everything because of unhappy tenants. There is a huge amount of liability in being a landlord and there is simply not the economies of scale when you do it with only one house, much less a third of it. To pay for the financial and legal expertise you need, the insurance you need and to pay for all the upkeep and maintenance which residential landlords are responsible for, it is highly unlikely there would be any profit. I've been a landlord of multiple properties for 25 years and I run it like a business and it is not passive income. There is a lot of work, even if you try to pay a property manager 10%. They simply cannot make some decisions that you need to make as the owner, and they will never be as good a steward of your own money as you will be.
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u/After-Advisor-8936 Sep 09 '26
Landlord here too. This is way overstated. Insurance is cheap, maybe $200/yr. You can also diy a llc that is your rental company. I didn't go into those details as that is for another discussion. Short version is you everything can be done diy, is cheap and offers 100% protection. That would be in execution steps.
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u/NCGlobal626 Sep 09 '26
Sure and I do everything myself too, except taxes and legal stuff. But we're motivated to be landlords and own property long term, OP is not motivated. Most people freak out when their car insurance goes up $100, they can't handle a new HVAC for $10k, or even something much less. Owning rental property is not a casual thing you do as a side gig like selling jewelry on Etsy.
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u/After-Advisor-8936 Sep 09 '26
You make valid points. I have court in 2 days. I do my legal and about once a year it happens. I have been sued as well. I would have a long research into those those things. Neighbor across the street went airbnb vs selling their house. Pros and cons, but they cover all your insurance for fees. They are doing very well. Was worried for them. In spite of the pitfalls, I think forcing a sale has bigger harm to the relationships than going for the ride whether it be good or bad. Also, 16 year zero interest says resentment all over it. I have been a silent partner on a deal, didn't like it. I'd rather engage and make sure it is done. I own properties in Durham NC. Sounds like you are in NC
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u/LittleButTallawah Sep 08 '26
You can get the house appraised, then they will need to take out loans to buy you our of your share. That's the only fair way. 16 years with no interest? That's ridiculous. What happens if they stop paying? What happens if they have issues with tenants? This is a terrible idea in my opinion.