Easy to do a rough calculation on the value of Prop 13. Let’s say it is at 150k but is worth 1m. 850k x 1.1% = $9,350/year. At 4% discount rate that means the lost Prop 13 value of selling is $233,750.
That’s quite a large loss.
But from your post I kind of see a situation where the poorest of the siblings just moves in and never pays rent. Will the other two evict them? Fight it out in court?
Another source of conflict is one sibling will likely end up doing most or all of the landlord work without getting extra from the rent.
