Buying Property With Friends

Ugh. Just found out that friends are planning to leave a vacation home to their kids (at least presently–lots of time to come to their senses). I was like “NO!”

“Why not?” friend asks.
I couldn’t even speak. Um…Do I really need to point out that you have three totally different kids, in different life styles who love each other but not always on same page and with very different tastes?

You saved them furniture but they didn’t like that and bought their own? (Okay they took some out of desperation to fill a vacant bedroom here or there but then out it goes).

That you and your brother fought for past 5 years over inherited property? And neither of you wanted it? It was all about the selling? (Let’s multiply that scenario by 10? and 3?)

All I could say was “do them a big favor and just sell it before you die”. If they want something let them buy it.

@gouf78 - Advise them to sell it to the kid they love the best. Which obviously won’t work. So tell them instead they should instead give it to the kid who needs it the most.

If they still don’t understand, tell them they’ve done a poor job of parenting if their 3 unique children may end up with different needs and wishes for their own lives, and not want only what the parent wants them to want when they want them to want it.

Then again, your suggestion was probably better.

“not want only what the parent wants them to want when they want them to want it.”…

I’d more than die laughing but it’s way too true.

I don’t know, I think when the time comes we’ll talk to the kids and ask them what they want us to do. I suspect the kid with the modest income, but who loves our vacation houses will want to have access. He’s already has shares in the property, but the cabin wouldn’t go to him till we passed away. Our other son has plenty of money for the upkeep, but no interest in them. We’d probably leave him extra money, to make up for not having the property, but only if he’s okay with it. He might also just say he doesn’t care about the money. Or 20 years from now, he might be a totally different person.

People inherit houses all the time. They deal with it.

H’s family went through this. His grandparents owned a (winterized) house on Lake Michigan in a resort town. After they died, it was owned jointly by the two sons, my FIL and his brother. Eventually, the brother wanted to sell out, because he and his wife were buying a place in FL instead. After they took a bunch of nice furniture and heirlooms from it, FIL and MIL decided to buy them out instead of selling. Then MIL, and subsequently FIL, died. House now owned by H and his 2 brothers. They formed an LLC to hold it. It was rented a good deal of the time to cover property taxes, utilities, repairs, etc. During this period, we were largely unable to use it, because we live so far away. Brother based in Michigan and his wife used it quite a lot, also oversaw renting, renovations, etc, but all was paid for by the LLC. Third brother is fairly nonfunctional, did nothing much. There was a local cleaning service, but not a rental manager. (BIL’s choice.)

Ne’er do well brother’s house was foreclosed on during the recession. Third brother would not consider selling to save his house. Our S went to college. We discovered that MOST schools counted H’s 1/3 share of the place as a disposable asset, although we had no power to realize its value unless other brothers agreed to sell, brother in charge refused. He also refused to buy us out, which he could have done. Our EFC was therefore judged to be about equal to our gross income at that time. (Luckily, we found two schools that understood the situation, and took the asset out of the equation.)

I said to H, just wait, nothing will happen until X and his wife want to sell it, and then it will go. Sure enough, X and wife decided that they wanted to buy a condo in the area where their best friends have a place. They INSISTED on selling the place, even though H offered to buy them out. Nope, the whole thing had to go. It wouldn’t be “safe” for the third brother financially. What a joke. We had actually taken the third brother in when he lost his house, and were prepared for him to live with us indefinitely, something the other brother would never do! But the place had to be sold because we would rip him off or something??

H viewed it as a potential retirement home, and moreover it had enormous sentimental value for him. (We went there for our honeymoon, when he thought it was being sold, before his parents changed their minds. We went a number of times in those years.) He told his brother that he would hire a local management firm. No dice.

I’m sure that BIL and SIL felt that they had the right to decide, because they were mostly “in charge” and responsible. But the fact was that, except for calling on me to help them by doing the online rental listings that enabled it to break even, they didn’t want us to interfere.

It definitely damaged H’s relationship with his brother.

Wow. That’s quite a cautionary tale.

I thought if anyone was a part owner of any property they could force a sale under a “quitclaim deed”?

Forcing a sale of real estate tends to cause lasting bad feelings among co-owners. It is a last resort type of action to take—even if a co-owner CAN do it, everyone will live with the consequences.

MIL recently moved from her home into a retirement community. The home she moved from is in a vacation area - she rented it out for many years prior to her moving there permanently (with FIL, after their retirement). Her plan was always to leave it to her 3 sons (including my H). We had decided long ago that we would not want to own it jointly with H’s brothers. Much too complicated with all the families involved, which now involve 3 generations. The other 2 brothers didn’t want the house and MIL was all set to put it on the market. The day before she listed it H and I had a change of heart and decided to buy it from her - but on our own. Bought it for very near market value so no hard feelings between the brothers. Still determining “ground rules” for family stays…

In any event, NO WAY would we have considered joint ownership. With family, friends, or anyone. Had one of H’s brothers wanted “in”, we would have walked away.

Forced RE sales. LLC members do not own the property that is in LLC, instead, they own shares of the LLC, and the operating agreement of the LLC typically addresses how the LLC property can be disposed and whether and how any member can sell their share to anyone (including buyouts etc.).

^^Exactly.