Posted by Bud Branstetter on March 05, 2000 at 09:03:58:
The situation I think you are talking about is when the family is paying the costs of the nursing home. In those situations the family wants all cash. They may be willing to take a mortgage if the monthly cash flow is sufficient to pay the bill. Many times this is 3 times the normal payment amount. You can storten the time and in return reduce principal amount, or lower the interest rate to make it attractive for both you and the seller. Depending on the life expectancy you may be able to put a new first and get them to take back a second with terms like no payments or interest for 5 years.
Another situation is when the persons hospital bill is being paid by medicaid. The state then has a claim on their assests. They also have to spend down their assets to a certain level. The approach I would use is likely to depend on the state laws. You could try the zero coupon approach. Similarly you could structure a mortgage that is very low at first while they are alive but normalizes in the future for the heirs. Many times the people are fed up with the system and will accept lowball cash offers to be rid of the restrictions.