My Siblings and I Inherited Two Paid-Off Rental Properties. Keep Them, Buy Each Other Out, or Sell?

Can three people who love each other split two houses without splitting a family? That's not some hypothetical question.Today I've got a question from three siblings who just inherited two paid off houses near the coast and they already want three different things. One wants to sell, one wants to rent and one hasn't said a word yet. The way most families handle this is exactly what breaks them. So stick around.We're getting into this right now on today's show. Hello and welcome to Financially Confident Christian. I'm Ralph Estep Jr. And I just want to thank you for joining me today.Today we're going to talk about what to do when siblings inherit property together and can't agree what to do moving forward. In today's show, we have a mom who left two paid off coastal homes to three siblings.One wants to cash in, one wants to keep him rental income and one won't say anything. And this isn't about houses. You get that right.It's the fear that a property decision permanently changes a relationship that matters far more than the property. And if you've got a question for this show, I would love to answer your question on the show.You can get to me by going to financiallyconfidentchristian.com/question Again, that's financiallyconfidentchristian.com/question let's get right into today's listener question. Listener writes this.My siblings and I just inherited two paid off houses near the coast from our mom. One of my sisters wants to sell everything and split the cash. My brother wants to keep them as rentals and split the income.Honestly don't know what I want yet and I'm scared this decision is going to turn into a fight that changes our relationship forever. Ralph, how do three people with different opinions actually make a decision like this together? Thank you. Well, thank you.And this is a very common scenario. I've seen this play out time and time again. And I'm going to start out by saying something bold.Real numbers and honest conversation come before the vote because in the end you're going to have to vote about this because you can't take this property and cut it into three pieces. A lot of people will be saying, well, let's just get a quick agreement. But that can build later conflict and that always backfires most of the time.I'm going to talk to you about a process today that's going to protect the money and protect the relationship because I think your mom would have wanted the relationship to be more important. So where do you start? First thing you're going to do. Get the appraisals first. Go hire a licensed appraiser.That's going to give you real market values for both properties. This isn't a time to guess. This isn't a time to make assumptions. You need to know what the real numbers are.That one neutral number that's a starting point for all three of you. Nobody can accuse anyone of undervaluing it once it's in hand. Once you have that appraisal, there's no argument.You can't divide what you haven't actually measured. So it starts there. Here's a little secret I'm going to tell you to do one of the things I thought about.Each sibling writes down what they want to do before you even have a group discussion. Each sibling properly writes their preferences and the why. It's really simple. My preference is this, and here's why. Write them down.Don't have a conversation first, because what that'll do is it'll surface the real motive. Maybe right now, one of you needs cash. Maybe one of you likes that ongoing income. Maybe one of you sentimental about those being mom's houses.So write those things. And before you have a conversation, share the writings with each other. Just pass them out like we used to do in grade school.Pass your paper to the left, pass your paper to the right. Do the same thing with your siblings. Share that writing.Because once you share that, it's going to create understanding and not three competing positions. And this also might stir up that silent sibling who just wants some private space to think it through.First, understand the why before you argue about the what or how you're going to do this. Once you do that, then price out what's keeping the property would cost you. My experience with this coastal costs are expensive.You're going to have things like wind insurance, flood insurance, property management, ongoing maintenance and repairs. It's one thing to say, well, let's just keep them. We'll get the income through it.But you've got to calculate the realistic net rental income, not some gross rent number you might know. Well, we can get such and such in rent from this. That doesn't mean anything to me. What is the actual net income you're going to get?And then compare that net honestly against selling and investing the proceeds. Simple example. Let's say the properties are worth $500,000. You can rent them and get X number of dollars per month. X number of dollars per year.Well, if you were to sell them, how much of a return could you get from those same Investments. When you do this, it keeps that these rentals from becoming this assumption into a calculated decision.Know the real cost of keeping something before you decide if it's worth keeping, because it sounds like the brother right now, he wants to keep it. But has anybody really sat down and counted the cost? And then maybe put a real buyout on the table.Maybe you've got one or two siblings that want to buy each other out. One of them wants cash. Once you have that appraisal, once you have actual financing, then you can actually put this in writing.And that's going to satisfy the sibling who wants out without forcing a sale. And it gets overlooked constantly because nobody offers it as a third choice. That buyout isn't a compromise. It's often the option nobody mentioned.I'm going to say one more thing, because one of the things about family and death especially I say this in my practice all the time. It brings out the ugly in people. One of the things I'm going to tell you right now is get everything in writing. Get the appraisal in writing.Get any keep, buy or sell buyouts drafted formally by an estate or, or real estate attorney. That written agreement. And trust me, you're gonna be, well, this is family. I don't need this route. You do.The written agreement removes ambiguity and often leads to problems down the road. This isn't about not trusting the other person. It's about protecting from future misunderstandings.When you do that, everyone moves forward with the same understanding. A clear agreement protects the relationship more than a verbal handshake ever could. Now, that's all the specific, that's all the math side of this.But I want to speak to something a little deeper. I want to speak to the fear underneath your question. Because it isn't really about houses. It's not about houses, is it?You're afraid that somewhere in the middle of appraisals and rent rolls and buyout numbers, you're going to say something to your sister or your brother that you can't take back. You just buried your mom and now the thing she left you feels like it might cost you the relationship with each other.But faith doesn't promise us that this will be easy or that all three of you are ever going to end up wanting the same thing. You may never be on the same page. It doesn't promise us that there's a decision without tension.There is going to be tension here no matter what you do.But what it does promises us is that God is present in the room while you have Those hard conversations and that peace is something you can pursue on purpose instead of something you hope shows up. I Love what Romans 12:18 says. If it is possible, as far as it depends on you, live at peace with everyone.Notice the honesty, because this is one of the things a lot of people don't think about. There are going to be situations where you might not be able to have peace. It says as far as it depends on you. You control your conduct.You can't control your sisters, you can't control your brothers. You can't control their choices. They may be acting crazy, but what does the scripture tell you as far as it depends on you?Peace isn't avoiding the conversation, it's handling it with personal integrity. Being scared of hurting them means you're the right one asking this question. Your mom left you to property.The thing that I think she'd want protected most isn't the property. It's the three of you. Handle that decision like that's true, because that really is true. This isn't about stalling.This isn't about refusing to rush something. This is about being careful, avoiding a quick decision to avoid long term problems. Build that peace.This decision deserves wisdom and you're the one asking for it. So here's your win for today. Go and get that independent appraisal for both properties. Get it scheduled this week.Find a licensed appraiser in the county where the property sits, both properties at the same time. And then tell your siblings it's happening and why nobody feels blindsided. It isn't a decision, it's just a number. Build that.Reframing an actual number that can turn this into a worthwhile discussion. Well, let's get right to our Bible verse today. It comes to us from the book of Proverbs, chapter 24, verse 3 and 4.It says, by wisdom this house is built, and through understanding it is established through knowledge. Its rooms are filled with rare and beautiful treasures. Right now you're standing in front of two literal houses deciding what to do with them.A house is built by wisdom and established by understanding. Not by speed, not by whoever argues the hardest, whoever makes the greatest discussion point.Every step today is wisdom and understanding put into practice, deciding together. This tough decision calls for both, not quick disagreement to end a hard conversation. This is not easy.I'm not going to tell you this is an easy thing. But be honest with each other. Put things in writing, get true appraisals, look at the real costs, and then honestly pray about it.Because God doesn't want this to become this breaking point in your relationship. Let's pray together right now.Heavenly Father, I just want to thank you for this family, for that mother who worked and saved and left them something that they can steward together. Thank you that they're asking how to do this well instead of just doing it fast, instead of just cutting and running.Lord, give their siblings wisdom and patience as they work through this decision.Lord, protect their relationship above the value of any property or any outcome that could happen and help each one of them speak honestly and listen well to one another.Guide them towards an agreement that honors both fairness and family and Lord, bring peace to a process that could otherwise create lasting divisions. Remind them what they inherited from their mother is far more than just two houses and we ask this in Jesus name. Amen.Friend, you asked the hardest and most loving question in this whole situation. How do we decide this together? This doesn't have to become the fight that changes your family forever.Unfortunately, I've seen this happen so many times and it just destroys families. So get that appraisal. Do those written preferences. Look at the real costs and look at the options you can do. Whatever you do, get it in writing.Make sure you all are on the same page. Share your beliefs. Share those things that matter to you.Now maybe right now you're facing a tough financial decision or you've got something you want to talk to me through. I would love for you to record a voicemail for me. It's super simple to do it.We'll put a link in the show notes but go to financiallyconfidentchristian.com/voicemail Again, that's financiallyconfidentchristian.com/Voicemail thank you for joining me today. As I always say, stay financially savvy. May God bless you and you have a great day. Ra.