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Old 06-14-2014, 12:28 PM
 
4,649 posts, read 6,492,106 times
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There are many people who take out reverse mortgages with no expectation of paying it off. Once they die if the family(Estate) doesn't pay it off the bank sells it. Pay off the mortgage today with the same stipulations they have with the bank and when they pass or move out the house is yours. Then you just rent or sell.

Even if later on they have to move the homeowner has gotten some money back especially if they took a lump sum and you get a home at a discounted cost depending on the payoff amount. When a person does a reverse mortgage usually there's a cash flow issue.
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Old 06-14-2014, 12:28 PM
 
14,267 posts, read 24,025,211 times
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Quote:
Originally Posted by newenglandgirl View Post
And also, who pays the property tax, water, sewer and repairs? If the owner does not live on the property, the insurance may be higher too.

That is really up to the OP. The OP is liable for property taxes for sure. Most of the utilities could be billed to the renters. The insurance on the building may be SLIGHTLY higher in a rental. It would not increase substantially unless the property is vacant.

In France, there is a living situation where the tenant pays rent until the owner dies. When that person dies, the title is transferred to the tenant at the death of the owner. A 30 year old agreed to this agreement with a 65 year old woman. 42 years later, he died and she was still kicking.
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Old 06-14-2014, 12:56 PM
 
4,137 posts, read 3,797,075 times
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We offered to do this for a couple of years ago for an elderly neighbor who didn't need the money but was having trouble with the aggravations of maintaining a vacation property (we lived on the same street as the vacation property). We would buy it from her at the assessed value, maintain it for her, let her live in it for free for the rest of her life, she would pay utilities and continue to pay for yardwork,etc. but we'd do all the little repairs, take care of the house. We would have been happy to do this because the lot was an excellent lot, and values have only climbed in this area. She considered it, since none of her children live in the area. She warned us that people in her family have lived into their late 90's and that she was in good health. We told her that we knew that, was no problem for us. Ultimately, she decided not to go ahead with this. We both knew that it was probably the bottom of the market, and that the property was likely to appreciate substantially over the next ten years. She also knows that we will help her out if she needs help, as we've always done. We're hoping that she will change her mind.
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Old 06-14-2014, 04:47 PM
 
Location: Tucson for awhile longer
8,872 posts, read 13,571,770 times
Reputation: 29034
I constantly get requests from charitable organizations (my college, my grad school, the local museum, a botanical garden I support), that I leave them my home in my will. They almost always mention that the deal can be structured so that they get the house right now while I continue to live there the rest of my life. It must be do-able (and being done) if so many groups are hyping it.
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Old 06-14-2014, 05:39 PM
 
14,267 posts, read 24,025,211 times
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Quote:
Originally Posted by Jukesgrrl View Post
I constantly get requests from charitable organizations (my college, my grad school, the local museum, a botanical garden I support), that I leave them my home in my will. They almost always mention that the deal can be structured so that they get the house right now while I continue to live there the rest of my life. It must be do-able (and being done) if so many groups are hyping it.

It is VERY easy to do. Most charities will provide the attorney and other professional services to "make it happen." In addition, they COULD provide some income stream in addition if that were necessary for the donor. Generally, atthe income level where you see that happen, a current income stream is not necessary.
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Old 06-14-2014, 10:03 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,669 posts, read 40,039,994 times
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Great Idea,

I'm pursuing this type of assistance as well to help elderly age in place (as possible.. until home becomes a threat to their well being).

Legally you cannot do a private Reverse Mortgage (directly), but you could arrange a similar arrangement though placing the home in an LLC with appropriate share / equity ownership and operating agreement.

Look into Shared Equity ownership. (More common with parents helping their kids buy homes, then later selling their share back to the kids.)

Will take some good legalese, and an understanding RE and Estate attorney who has this passion too. Most aren't keen on 'unconventional' agreements, as it make them think / research / go out on a limb.
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Old 06-15-2014, 01:49 AM
 
Location: Copenhagen, Denmark
10,531 posts, read 8,784,204 times
Reputation: 12240
I have never heard of such an arrangement and who on earth would have an incentive to buy the home if they could not get the use or income from it and have to pay taxes?

The usual path is for an aged parent to sell their home to a child for a small sum and retain a life estate in it, so that the parent can live there as long as possible. There are federal Medicare rules regarding this, however, to prevent the elderly from hiding assets that could be sold to pay for their care.
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Old 06-15-2014, 05:34 AM
 
Location: Ft. Myers
17,638 posts, read 11,210,207 times
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I don't know, but it seems like a losing proposition to me. There are certainly better, quicker ways to make money in real estate.

Don
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Old 06-15-2014, 05:35 AM
 
Location: Baltimore, MD
3,746 posts, read 4,224,664 times
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In general,

Taxes: The holder of the life estate is responsible for paying the taxes.
Maintenance: The holder of the life estate is responsible for the upkeep of the property.
Ownership does not transfer until the death of the holder of the life estate or both the holder of the life estate AND the remainderman (OP in this case) agree to sell/transfer the property to another party.
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Old 06-15-2014, 06:03 AM
Status: "Support the Mining Law of 1872" (set 18 days ago)
 
Location: Cody, WY
9,596 posts, read 10,949,665 times
Reputation: 19258
Suppose the property appraises for 500k. If the OP can buy the place for 200k (people are stupid) in a state with nonrecourse mortgages, then mortgage the place and take 400k out of it, he has the cash to do it twice more. If things go sour he can walk. Hard money mortgages are still available.
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