My wife’s parents have a cottage in a vacation area that is only used during the summer months during peak season. The cottage itself is practically worthless but the value is in the land.
We are in discussion with a builder that will handle the raze + rebuild from soup to nuts: permitting, designing, contracting, razing, building, all of it. The value of the land is more than enough to get a new construction loan.
There is also a sibling involved and that family just can’t buy in on a new construction loan + operating expenses just yet, probably not indefinitely.
So it would be my wife’s parents and my wife and I being the two families paying on this.
I understand we need to talk to a real estate attorney about putting the new home into a trust and forming an LLC (especially since we plan on hiring a management company to rent it out for short-term vacation rentals when none of us will be there) but I have a few questions that maybe some random strangers on the internet have experience with a similar situation to this.
We can assume the parents would ultimately split their shares of the LLC for the cottage equally amongst their two children in their will. I am assuming that for now my household would be “buying into” shares of this as we’d be splitting the loan and the operating expenses exactly down the middle. The parents household having previously owned the land but will be paying the other half of the loan+expenses.
Is it safe to say a real estate attorney would be able to help all three families navigate proportional shares (and thus likely, more decision making authority where needed) and the info needed to provide to our tax preparers?
I guess the concern is, that it may be quite some time before bro-in-law’s household puts anything into this whereas my household will be putting in thousands of dollars each year. Is this something that real estate attorneys have experience with in drawing up an operating agreement for an LLC that is just a vacation house and a trust to keep it into the family – and also would be able to help determine an equitable ownership of shares (0% to the brother in law household, x% to us, y% to parent in laws, etc)?
In the end we want to all enjoy this family vacation home and make sure everything is proportional, fair and equitable to what everyone put in not just with ownership (decision making authority really since we plan to keep this in the family for generations) but also with potential income – design firm said that it can pull in quite a bit of money year around – I still need to talk to a property management firm to confirm this – as one day this loan would be paid off and there’s a potential to earn more than taxes+operating expenses+maintenance since we all live a few hours away.