Advice for first time poster

Ive got so many questions , I need help.
Am I in the right discussion?

My emotional state is stuffin up my decision making. Im a mess.

Dad died last year and left his home to me and my brother.
Sydney Sth, 4 bed double brick, 550m2. Agents says "dress circle location", best street in suburb. $700K to $800K @ auction. ($500K last year). wow.

Dad did not want us to sell it. wanted it to stay in the family. I promised him Id keep it, as an investment, he was OK with that.
Everyone keeps tellin me hes dead, he wont know, sell it. I cant do it.
He worshipped that house, built it all by himself from the ground up, 50 yrs ago. You know the story, hand dug the foundations, cleaned the second hand bricks, (15 thousand ) etc etc.

My brother wants to go to auction to get max cash, I want to buy him out. He wont except my offers, thinks he can always do better in the market. Hes already mentioned the Supreme Court can force me to auction.

Im a prop investor already, with two good inv props neg geared. worth $1.4M less $720K owing, $850/wk income, int only.
We own our home as well except for $70K LOC. Bank holds deeds for all three, with Xlinked security.

Dads house is debit free.

I'd have to borrow all, to buy my brother out.
Im already at max borrowings for my income, (assuming I must still have a life). Havin trouble crunchin numbers to see if dads house can hold its own, debit V rent income & neg gear. My brains a mess.

My business side says, Its not everyday you get to buy a sydney house at half price, dont let this opportunity go. This can be Inv prop # 3. Its solid and very low maintenance, for a house of its size. It wil easily return $500-600/wk.

One day I can pass it on to my kids. (yeah i know, they'll sell it for sure):(

Im not sure what my question is, i just need help.
 
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Sounds like the problem you have with your brother is getting a valuation he will accept.

But even if you pay your brother top dollar for his share you will still be better off in the medium to long term.

Your brother is focussed on return - make sure he knows the fees you guys can save if you buy it rather than sending it to auction.

Wish I had your problem :)
 
If you promised your Dad that you would keep it, you should keep your promise, you're not in a position where you are desperate for the funds.
You'll feel a lot better about yourself too and it can be something to remember him by.

Mind sharing which suburb it's in?
 
Ive got so many questions , I need help.
Am I in the right discussion?

My emotional state is stuffin up my decision making. Im a mess.

Dad died last year and left his home to me and my brother.
Sydney Sth, 4 bed double brick, 550m2. Agents says "dress circle location", best street in suburb. $700K to $800K @ auction. ($500K last year). wow.

Dad did not want us to sell it. wanted it to stay in the family. I promised him Id keep it, as an investment, he was OK with that.
Everyone keeps tellin me hes dead, he wont know, sell it. I cant do it.
He worshipped that house, built it all by himself from the ground up, 50 yrs ago. You know the story, hand dug the foundations, cleaned the second hand bricks, (15 thousand ) etc etc.

My brother wants to go to auction to get max cash, I want to buy him out. He wont except my offers, thinks he can always do better in the market.

Im a prop investor already, with two good inv props neg geared. worth $1.4M less $720K owing, $850/wk income, int only.
We own our home as well except for $70K LOC. Bank holds deeds for all three, with Xlinked security.

Dads house is debit free.

My business side says, Its not everyday you get to buy a sydney house at half price, dont let this opportunity go. This can be Inv prop # 3. Its solid and very low maintenance, for a house of its size. It wil easily return $500-600/wk.

One day I can pass it on to my kids. (yeah i know, they'll sell it for sure):(

Im not sure what my question is, i just need help.
The only way would be to sit down with your brother and work out what he wants everybody has a price in mind,and tell him again what your Father wanted to happen,sure auctions can work well but they can also backfire on you just as fast,last weekend in Brisbane there was 178 properties offered for sale,with only a 43.5 per cent clearance rate may be different down your way, but there is still over 63,292 properties for sale in QLD,more listing then this time last year,and 23,035 properties for rent in QLD,find the numbers for NSW,from Auctions-clearance rates- properties for rent,and show him the numbers then make your offer..
good luck willair..
 
Sounds like the problem you have with your brother is getting a valuation he will accept.

But even if you pay your brother top dollar for his share you will still be better off in the medium to long term.

Your brother is focussed on return - make sure he knows the fees you guys can save if you buy it rather than sending it to auction.

Wish I had your problem :)

Simon, his dad did die. I for one did not feel it as a blessing when my brother & I inherited his property, nor something I wished on others.

Raphael,
there are some good spreadsheets on the forum for example which should be able to give you an idea of costs vs rental income based on how much you wold end up owing etc if that would help you.

I am living in my dad's unit. I bought my brother's 1/2 it really cheap compared to now that it's worth more thanks to a bit of a boom earlier on. Feel I should help my brother out somehow because of this.
 
Ive got so many questions , I need help.
Am I in the right discussion?

My emotional state is stuffin up my decision making. Im a mess.

Dad died last year and left his home to me and my brother.
Sydney Sth, 4 bed double brick, 550m2. Agents says "dress circle location", best street in suburb. $700K to $800K @ auction. ($500K last year). wow.

Dad did not want us to sell it. wanted it to stay in the family. I promised him Id keep it, as an investment, he was OK with that.
Everyone keeps tellin me hes dead, he wont know, sell it. I cant do it.
He worshipped that house, built it all by himself from the ground up, 50 yrs ago. You know the story, hand dug the foundations, cleaned the second hand bricks, (15 thousand ) etc etc.

My brother wants to go to auction to get max cash, I want to buy him out. He wont except my offers, thinks he can always do better in the market. Hes already mentioned the Supreme Court can force me to auction.

Im a prop investor already, with two good inv props neg geared. worth $1.4M less $720K owing, $850/wk income, int only.
We own our home as well except for $70K LOC. Bank holds deeds for all three, with Xlinked security.

Dads house is debit free.

I'd have to borrow all, to buy my brother out.
Im already at max borrowings for my income, (assuming I must still have a life). Havin trouble crunchin numbers to see if dads house can hold its own, debit V rent income & neg gear. My brains a mess.

My business side says, Its not everyday you get to buy a sydney house at half price, dont let this opportunity go. This can be Inv prop # 3. Its solid and very low maintenance, for a house of its size. It wil easily return $500-600/wk.

One day I can pass it on to my kids. (yeah i know, they'll sell it for sure):(

Im not sure what my question is, i just need help.

You have 4 choices
1) Ask ur bro what price he wants to sell
2) Get a valuer
3) Put an asking price and see what offers you receive.
4) Let it go to auction to test the water. Put a ridiculously high vendors asking price so that it does not get sold during auction day( I am not sure whether this is ethical) and you can know what the highest bid. keep in mind u have to share the realtors cost.

Since your bro. is not negotiating and looking at option 4, make it clear he cannot go back to option 1 or 2, if the auction goes pear shape. Option 2 is the best choice as it is fair.
 
if it doesnt sell at auction, why would you not want to give your borhter the choice of option 1 again, (assuming you still wanted the property yourself) ?
 
jay, assuming you paid your brother market value, dont worry, sleep well. someones gotta sell, someones gotta buy. no-one had guns to their head. maybe do sumtin with your will..?
Ill look for those spreadsheets, tried to do my own but cant stay focused.

simon, I agree, but I cant afford to pay top dollar. I cant believe it was valued at 500K last year and 700K now, I cant believe it. all were written valuations. i also cant believe my brother couldnt give a toss what dad wanted, he just wants cash and as much as possible.

Will; good points, Ill check clearance rates in the papers. Ive done the whats your price thing, he just gave me a blank stare. said sumtin about that ill end up with something that will grow in value. Its like he doesnt want me to own it. he did not like my father, had nothin good to say about him. this is weird. im getin emotional again...
 
I say take it to auction immediately.....with a high reserve.

And you want to keep your thoughts to yourself about what it is worth. REA's are likely to tell you anything. Do some research yourself and go to a few auctions this weekend in the area.

But don't hold out against your brother.
If you wait and prices go up, you'll pay him more.
If they go down, he'll blame you for stalling.

And if you want to be fair to the public, provide an independent building and pest inspection so others don't waste their money. It will be small change compared to the auction fees. And if it is 50 years old, you might find it needs a bit of mulah spent on it, which will help drop the auction result.

Keep in mind though your brother could plant a couple of mates in the auction to bid it up.
 
Is the property still held by the estate or has it been transferred to you and your brother as beneficiaries?

If it is held by the estate and the executor is to do the sale, the executor is bound to get the best price. Traditionally the law regards auctions as the way to ensure the highest price.

If the property is held by the estate and you are an executor and the sale is to be by the estate, the executor should not buy from the estate - conflict of interest. Possibility that sale will be reversed - seek legal advice.

If the property is held by you and your brother as beneficiaries, your brother is right he can go to the Supreme Court and get an order for the property to be sold. Why not agree but with the proviso that either of you can bid on the property.

Finally whatever the relationship between you and your brother is now or in the past or whatever it was between each of you and your dad, you have both lost a parent. People grieve in different ways. People's perceptions of whether a parent has treated them fairly or not are their reality. My wife's family is in a similar position after her grandfather died last year. One of the sons whole attitude is coloured by how he perceives other children were favoured.

Also look at it from an outsider's perspective, you are saying to your brother I want the house but I can't afford it at current market value, although Dad gave the house to us both I actually want 64% and you can get 36%, that is the effect of offering him $100K less for his half than the latest valuation. Is your brother being fair to his family if he gives that up when you are going to be using the place as an IP and not a PPOR?

Whatever you do don't end up going to court. This will cost you emotionally and financially. You need to step back and get your mind in order. Possibly suggest a mediation.
 
An alternative:

Sell the property, and split the proceeds. Then, take your share and set up a fund (trust or other) to be used for the education of your children, your children's children, your... you get the idea. The amount you will have to put in should generate substantial returns every year, and these returns can be shared amongst eligible children for education costs. That way, something your dad worked so hard for will be used to benefit his decendents for many generations to come, and they will always remember him as the source of something very special that lasted a long time.

Your brother will be happy because he'll get some cash, and you and he won't have to let this come between you.
 
Also look at it from an outsider's perspective, you are saying to your brother I want the house but I can't afford it at current market value, although Dad gave the house to us both I actually want 64% and you can get 36%, that is the effect of offering him $100K less for his half than the latest valuation.

I didn't read it that Raphael wanted to split it unevenly. He said he couldn't believe the value had risen so much, but that is what three comparable sales will show in a formal valuation or even an appraisal.

If it eventuates that Raphael cannot afford it at half the market value, then that is a different scenario and a decision will have to be made when that information is known.

Either way, the relationship between brothers sounds fairly strained anyway.
 
Hi Wylie,

It looks llike the 700K was a potential selling agent's appraisal and not a valuation. Raphael hasn't said what the purpose of the $500K "valuation" was.

If I've misunderstood Raphael I apologise to him.
 
Sorry for your loss Raphael, i saw another thread about this i think?

If i was in your position i'd do anything to keep your promise, and it's quite sad that your brother won't do the same.

Do some research for yourself, the prices of properties selling currently in the same area, rental returns etc. Also find out exactly how much you can afford to borrow.

Then perhaps get another valuations done?

If you can't borrow enough to cover half, would you be willing to sell one of your current IPs? Not anyone's first choice obviously. Or try civily talking to your brother.

It must be really hard, and i'm sure everyone here is supporting you. Goodluck :)
 
Raphael,
You may want to explore the following idea further with lawyer/accountant as I'm not sure about all the practicalities.

1. Get a couple of independent valuations done and agree on a value with your brother based on these valuations.
2. If you can afford 50% of that then buy your brother's share. You keep the property.
3. If you can only afford say 40%, pay him 40% (through a loan secured against the property) and put the property into a family trust that is owned 90% by you and 10% by your brother. He gets most of his cash immediately and the property still remains in the family. In the future when you have the means, buy off his 10% share.

Cheers
Truong
 
Im overwhelmed by the responses. Thankyou all.

OK, the executors (not family, but are minor benos'), arranged the first valuation, ($500K) about one year ago, sumtin to do with probate.

Estate is not yet wound up, but is in final stage. I expect it to happen soon. I do not expect the executors to manage sale. They want out and will want to pass on to us bros, for us to sort out. everything else is sorted.

JRC, I dont understand the 36 / 64 bit, I have no problem offering 50% of worth, Ive got a problem offering 50% of an RA appraisal. I guess thats all part of the discussions with bro, but he wont talk. My first offer was a bit more than the original appraisal, but I can see the markets moved since then.
Im asking him for a $ response, but he wont give one. I think he just wants to sit on his butt and see what the auction brings. Its like he doesnt want me to own it.

Truong I like your option 3, but Im starting to realise i dont think I could get that sort of co-operation.
 
If a family member would've threatened me with the supreme court (and was serious about it) i would just walk down and put a caveat on it. Then walk down to the bank and borrow as much as I could on it.
Then borrow with a small 50k second mortgage on it from PB pty ltd (and another caveat). A few other tiddly bits...
Then go back and smile and say "Go for your life".
I luv my family :)
 
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