Is there a smart way to 'buy'/inherit my parents second house (WA)?

My parents have a rental property in Seattle that they're tired of managing. They are both recently retired (early 70's) and now live 2 hours away. They've owned the property since 1980 (purchased for $100k) and they rely on it to bring in around $15k annually (after $8k in property taxes) to supplement their retirement. They know if they sell it, they'll pay a large capital gains tax. They'd prefer to leave it to me and my three sisters in a living trust, to avoid the tax hit/ keep it in the family/ allow one of us to benefit from it. It's currently worth around $800k.

My sisters don't have any interest in taking it on. We'd all like to create a scenario where all parties benefit from it fairly. One scenario that's been recommended is for me to buy it through a promissory note. I'd move into one of the two units, and manage the property. In the agreement, I'd 'purchase' the home for $800k (or whatever it appraises for and all parties agree on), and my monthly 'mortgage payments' to my parents would allow me to gain equity in the house (while keeping their income from the home constant), until the time of inheritance.

For example, if I pay off $200k over the next 10-15 years, the remaining value in their trust for the property would be $600k. That would be split 4 ways, so I'd own $200k in equity, and then inherit 25% of the $600k ($150k) and pay each of my three siblings $150k through a mortgage for their shares. I realize in this scenario I wouldn't technically own the house until both of my parents have passed. I think I am comfortable with that as this is the only way to transfer ownership of the home without paying a huge tax bill, and my parents have a well funded retirement an don't rely on this for much income.

I have minimal real estate experience, so I'm looking for advice/ warnings/ input on how best to proceed.

As I currently see it, the pros and cons are:

Pros:

1. Potential to create a profitable property, as my folks have admittedly charged well below market rate for the two units. the upstairs unit is 800 square feet, one bedroom apartment that they currently rent for $1,100. The main floor is 1,100 square ft, 2 bedroom unit that they rent for around $1,600 a month. The basement has a laundry room that both units have access to, but is otherwise unfinished and could potential be a third unit with some investment.
2. This agreement would relieve my parents of the hassle of managing the property
3. Affordable entry into an expensive housing market that I'd like to move back to.

Cons:

1. I would not own the property until the time of inheritance (despite very much trusting my parents and siblings, this would make things like having a home equity loan for costly repairs or upgrades difficult or impossible).
2. Little flexibility to sell the property before time of inheritance (should I need to move for work, relationships, etc)
3. It's a 100 year old house and needs work.

Thanks for any advice you can offer. Especially in regards to:

1. Structing the purchase through a trust
2. Navigating a very clear agreement with my parents and siblings to avoid conflict and resentment.

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submitted by /u/cantRYAN
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source https://www.reddit.com/r/RealEstate/comments/15y0s8a/is_there_a_smart_way_to_buyinherit_my_parents/