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Old 07-31-2012, 02:20 AM
 
4 posts, read 4,068 times
Reputation: 10

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Hello,

My ex-husband recently passed away in February (cancer) and he left his house to the kids (son 21, daughter 18). Both of them are in college and are getting financial aid plus scholarships. At this time they do not work but instead focusing on getting through school full time.

My son and daughter still live in my home because the cost to dorm is outrageous. Their father never supported them financially and I have been unemployed since 2010. I was actually shocked that he left the house to the kids.

The house is new construction, legal two family in Queens, New York. The area is very diverse and is in walking distance to the park, restaurants, public transportation, etc.

Their father bought the house in 2005 (when all of the house prices were inflated) for $1,015,000.

Right now since we cleaned the house and it is completely vacant the kids decided to put it on the market to see what happens. The highest offer is $1,130,000. The Real Estate wants 4% if they sell the house, which is about $45,000.

There are no liens on the property but there is a $190,000 mortgage....the monthly payment is about $1,900.00. The taxes are $6,000 a year but I think it is included in the mortgage payment (escrow?).

Also, their father does have some bills left that have to be paid such as hospital bills, credit cards, etc but so far no big THOUSAND+ dollar bill has come in the mail yet....just a lot of hundred to four hundred dollar bills that do add up.

I'd say a safe number would be $30,000 in total for all of my ex-husband's bills.

Both of them talked it over and my son and daughter both decided they want to invest LONG TERM and don't need the money right away.


Now the kids are thinking....what is the best & safest investment?

Selling the house and putting the money into the stock market or trust fund which could be risky? We would have to contact a financial adviser because none of us know about the market.

OR

Keep the house and rent it?

The first floor can be rented for $2,000/month, second floor, $2,500/month.

Since the kids are not working and have virtually no significant credit line they would never be able to buy this kind of house by themselves at least in the near future or get a good mortgage rate like the one that is already in place.

If the mortgage owed was $500,000+ then I think they should sell but since the mortgage is so low and can be paid off in 4-5 years via rental income I think they should keep the house for investment.

Please let us know your opinions. Thank you and god bless.
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Old 07-31-2012, 05:44 AM
 
Location: The Triad (NC)
26,859 posts, read 57,900,981 times
Reputation: 29278
Same advice as in the other thread you started.

btw, even though a house is at the center of it... this isn't really a RE question.
It's a will/estate & responsibly provide for children through college question.
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Old 07-31-2012, 07:08 AM
 
2,618 posts, read 4,106,655 times
Reputation: 1870
If you can make $4,500 a month, when you payment is $1,900, that is by far the safest investment. Queens, near a college (doesn't matter which one), upscale neighborhood (probably becoming more so each year) = safe investment. If you are at all concerned about the day-to-day of being a landlord, consider a property manager. They will eat into your profits, but you would do virtually no work.
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Old 07-31-2012, 12:53 PM
 
Location: Barrington
41,862 posts, read 31,734,681 times
Reputation: 14080
Quote:
Originally Posted by SCCC View Post
We would have to contact a financial adviser because none of us know about the market.
Do this before you do anything else, including getting online opinions from strangers.
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Old 07-31-2012, 01:23 PM
 
3,751 posts, read 10,209,292 times
Reputation: 6560
You need serious financial/legal advice - not the kind that can be found online.

I am not sure, but believe that since your husband has passed away, the bank that holds the mortgage will want the mortgage to be refinanced.

Because leaving a dead person on the hook for the mortgage is silly.

So, that $190K of mortgage debt may need to be refinanced into your children's names, or yours and your children's names if they are not mortgageable on their own.

But again ... lawyer, planner!!

I'd keep the house and use the rental income to maintain it/provide small income stream (even if using a property management service, if you are out of state it is probably wisest move), because real estate in the New York City region is probably a fairly safe investment. Other metropolitan areas are more volatile, NYC is unlikely to lose its appeal any time soon.
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Old 07-31-2012, 01:48 PM
 
Location: Austin
7,077 posts, read 16,898,623 times
Reputation: 9484
With the numbers you posted, how is it not a no-brainer to keep the house and get the income? If the kids have no jobs right now, doesn't the income make sense to you? Who are you trying to convince one way or another? Trying to convince yourself it's a good idea, or your kids?
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Old 07-31-2012, 02:17 PM
 
29,988 posts, read 35,862,752 times
Reputation: 12719
If there is only a 190K mortgage on a $ million+ home, allow the estate to sell the home, paying of the mortgage. Keeping a million dollar home for a rental, unless in an exclusive tourist resort, is insane, IMO.

If the intent is for rental income down the road allow these young adults to look into that moving forward after the estate is settled. They'd be better off purchasing a duplex or multi-family property and living in it while they complete college and renting out a property built with the intention of being a rental. Don't throw pearls before swine (or million dollar homes before renters) unless you have a wealthy executive renter for the entire home in a long term contract.
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Old 07-31-2012, 02:35 PM
 
4,626 posts, read 7,203,593 times
Reputation: 4735
Well, first of all, The Executor of the Estate or appointed Administrator has to do their job. And that entails dealing with the debts of the Estate, any Estate taxes and the deceased's final tax returns.

If there is not sufficient cash assets to pay the bills, then something of value would need to be sold.

If it is the house, then the proceeds would go to the children after all the debts are paid.

You should really have legal and financial representation.
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Old 07-31-2012, 02:36 PM
 
Location: Old Town Alexandria
14,506 posts, read 23,188,178 times
Reputation: 8832
Quote:
Originally Posted by SCCC View Post
Hello,

My ex-husband recently passed away in February (cancer) and he left his house to the kids (son 21, daughter 18). Both of them are in college and are getting financial aid plus scholarships. At this time they do not work but instead focusing on getting through school full time.

My son and daughter still live in my home because the cost to dorm is outrageous. Their father never supported them financially and I have been unemployed since 2010. I was actually shocked that he left the house to the kids.

The house is new construction, legal two family in Queens, New York. The area is very diverse and is in walking distance to the park, restaurants, public transportation, etc.

Their father bought the house in 2005 (when all of the house prices were inflated) for $1,015,000.

Right now since we cleaned the house and it is completely vacant the kids decided to put it on the market to see what happens. The highest offer is $1,130,000. The Real Estate wants 4% if they sell the house, which is about $45,000.

There are no liens on the property but there is a $190,000 mortgage....the monthly payment is about $1,900.00. The taxes are $6,000 a year but I think it is included in the mortgage payment (escrow?).

Also, their father does have some bills left that have to be paid such as hospital bills, credit cards, etc but so far no big THOUSAND+ dollar bill has come in the mail yet....just a lot of hundred to four hundred dollar bills that do add up.

I'd say a safe number would be $30,000 in total for all of my ex-husband's bills.

Both of them talked it over and my son and daughter both decided they want to invest LONG TERM and don't need the money right away.


Now the kids are thinking....what is the best & safest investment?

Selling the house and putting the money into the stock market or trust fund which could be risky? We would have to contact a financial adviser because none of us know about the market.

OR

Keep the house and rent it?

The first floor can be rented for $2,000/month, second floor, $2,500/month.

Since the kids are not working and have virtually no significant credit line they would never be able to buy this kind of house by themselves at least in the near future or get a good mortgage rate like the one that is already in place.

If the mortgage owed was $500,000+ then I think they should sell but since the mortgage is so low and can be paid off in 4-5 years via rental income I think they should keep the house for investment.

Please let us know your opinions. Thank you and god bless.

By law, they aren't legally responsible for their father's medical bills.

Since the house is in their name, they should get a property manager to help rent it out, renting in Queens NY should be a good market, easy to find renters since you are so close to the city.

Since they are of legal age, it is their decision, whether to sell or keep it and rent it out.

They really should contact an estate/ real estate attorney. Since you are in NY the law is a bit complex.

Queens Real Estate Lawyer - Local Attorneys & Law Firms in Queens, NY | FindLaw
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Old 07-31-2012, 02:59 PM
 
4,626 posts, read 7,203,593 times
Reputation: 4735
The debts of the estate have to be settled first before hard assets are distributed to the named heirs.
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