House sale with reinvestment in new construction?

My aunt (older generation) owns a three-family house from the 60s that will need renovations in the near future. Apart from a boiler replacement, nothing has been done so far. She lives off the rental income but has no money to invest in the renovations. Ergo, it comes down to selling.

I consider that a too quickly drawn conclusion. From "aunt" I infer that you might be among the heirs (but not directly related in a straight line), and from "older generation" that up until the inheritance event, perhaps not three times ten years will be fully completed (?)

In this respect, I primarily see a tax planning issue here.

For a three-family house, the most obvious approach to me would be to first divide it into individual ownership units. For one apartment, I would expect that the tenant (himself or possibly adult children) could be interested in purchasing; the aunt would keep a second one entirely for herself; and for the third, she could gift you an ownership share in exchange for a corresponding renunciation of inheritance. This is just sketched out roughly with a blunt pencil, only a good tax advisor can refine it. Such an advisor might also say, for example, to contribute this and that (still undeveloped) plot of land together into a company.

A three-family house alone can just still be regarded as a building – but together with another property, in my opinion, the boundary is crossed where one should primarily consider it a (not least for tax reasons) asset.