First, keep the building stable
Before any talk of selling, someone has to make sure rent is collected, bills are paid, and the property stays insured. Tenants still have leases and still need repairs. Contact the insurance carrier to confirm coverage continues after the owner’s death, find out who has been managing the property, and locate the bank account where rent is deposited.
If there is a property manager in place, ask for the current rent roll, the deposit ledger, and the last twelve months of income and expenses. If the owner managed it personally, you may need to piece this together from bank statements, a checkbook, and tenant conversations. A calm, organized handoff protects the building’s value while the legal side is sorted out.
Who has authority to sell: probate and trusts
How the building was titled determines who can sign a sale. If it was held in a revocable living trust, the successor trustee generally has authority to manage and sell under the trust terms, often without going through court. If it was held in an LLC, the operating agreement usually controls who manages the company after a member dies.
If the building was titled in the deceased owner’s individual name without a trust, it typically passes through probate. The court appoints an executor or administrator, who then gains authority to sell, sometimes with court approval depending on the state and the type of administration. Probate timelines vary widely, so ask the estate attorney early how long it is likely to take and whether a sale can be negotiated before it finishes.
Buyers and title companies will ask to see proof of authority, such as letters testamentary, a trust certification, or LLC resolutions. Having these ready avoids delays once a contract is signed.
Stepped-up basis and other tax basics
Inherited property generally receives a stepped-up basis equal to its fair market value at the date of death. In practice, that often wipes out much of the capital gain and depreciation recapture that built up during the original owner’s lifetime. If heirs sell soon after inheriting, the taxable gain may be small.
A qualified appraisal as of the date of death documents the new basis, and it is worth getting even if you plan to sell quickly. Gain from appreciation after that date is taxed normally, and new depreciation starts from the stepped-up value if the heirs keep renting it. Estate tax, state inheritance tax, and community property rules can add complexity, so the estate’s CPA or attorney should confirm how these apply to your situation.
When there are several heirs
Co-heirs often disagree about whether to sell, when, and for how much. One may want to keep collecting rent while another needs the cash. Getting everyone the same information at the same time reduces friction. Share the rent roll, expenses, repair needs, and any offers openly.
- Get an independent opinion of value that all heirs can see.
- Agree in writing on who communicates with buyers and brokers.
- Consider a buyout if one heir wants to keep the building.
- Set a decision deadline so the property is not left in limbo.
- Ask the attorney about options if heirs cannot agree, since some states allow a court-ordered partition.
Selling from out of state
Many heirs live far from the building. Managing tenants and contractors remotely is hard, and traveling back and forth for showings adds cost and stress. A broker listing can work if you hire a local broker you trust to run showings and coordinate diligence. A direct sale to a buyer who operates nationally can reduce the number of trips, since inspections and document review happen without you on site.
Closings can typically be handled remotely with mobile notaries or signing services, and the proceeds wired to the estate or trust account. Confirm the process with the title company in advance.
How Skyline works with estates and heirs
Skyline Capital Investments buys apartment buildings of 5 or more units nationwide, directly from estates, trusts, and heirs, and through their brokers. We buy as-is, so there is no need to clear out units, repair deferred maintenance, or deal with problem tenants before selling. We can review an estate property with limited records and help identify what is missing.
We understand that probate and co-heir approvals set the pace. Once a deal fits, we provide a written LOI and set closing around the estate’s timeline rather than pushing an artificial deadline.
