[teenyelliott]

I'm with you. Doesn't sound like a good idea. But you give very few details.

Are they actually going to buy the house from him, like a contract for deed, and he keep his mortgage, or are they just going to assume payments?

And with a new wife in the picture, I would be very wary of getting into a four way real estate deal.

[CatoRenasci]

You don't say what state you're in, and that could make a difference as real estate law varies from state to state. You need advice from a professional, preferably a real estate lawyer in your jurisdiction, or at least a very save real estate broker/appraiser. Problem is the most competent advice, from a real estate lawyer, is expensive. But, there's real money involved here, and it strikes me as worth the $250-500 you'd pay a good real estate layer for a consultation. If you're going to do the deal, you'll need a lawyer in most states anyway.

[pax_et_bonum]

...my wife was told to go in with her sisters on a "home purchase".

There's your first huge red flag.

Your wife is an adult and she shouldn't allow anyone, including her parents, to tell her what to do.

[Lil'freeper]

I agree with the suggestion to get professional advice on the matter - especially legal advice. Families, plus sentiment/emotion, plus real estate is a high-risk proposition. If the deal goes bad, it will go very, very, very bad*.

If I were in your situation, I'd get all the terms of the deal in writing. You should outline who is responsible for what, how the rental income is managed, and how the property will be disposed of eventually. If the sisters can't agree to drafting a watertight, legally binding agreement, agree on the terms, or agree to sign it then you should take that as a portent of the future.

* The number of very's in 'very very bad' is equal to the number of sisters/women involved. I say that as a woman who has learned a few family real estate lessons.

[TheOracleAtLilac]

the situation is just too complicated to deal with.

If the sisters take over payments there are tax implications
what's the value of the property for depreciation ?
How much has been depreciated already & must be recaptured for gramps taxes ?
what's the benefit of of the sibs pursuing other than as a (low probability) housing hedge ?

How much for a R.E. attorney (& possibly a contract law attorney) to draft papers covering the transfer & proportionate ownership (based on mo'ly contributions) ?

upside vs. downside...sell the shack !