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.
House is free and clear–no O/F—what can I offer? - Posted by JuliaAnne
Posted by JuliaAnne on March 04, 2000 at 09:27:29:
I have seen this situation before on this site but it is the first time I have encountered it for real–please help.
Estate sale–(owner going to nursing home–daughter wants to sell) Asking 110K with possible value at 140K. Owned free and clear, family needs money to take care of mother in nursing home. Needs minor clean up and painting. House next door rents for $750.
I have no cash but may have access to some hard money.
What can I offer to make this deal good for both of us?
(Don’t know that I can sell the home or flip–as I have never done either but like to find a way to make an income stream from this one.)
Thanks in advance!
Re: House is free and clear–no O/F—what can I offer? - Posted by Jason Perry
Posted by Jason Perry on March 04, 2000 at 20:37:36:
—One comment- take care of your cash needs before your income needs-- a flip will give you cash now, put that to work for more income deals—
I did a flip on a property like this
It was free and clear, vacant and they wanted to sell
I purch home for 70k and flipped (even though it was a thin deal) for 78,500
Most would say there isn’t much profit, but hey 8.5k is 8.5k
Try picking the prop up at 90-100k and then advertising a handyman special – “put some sweat equity in the home”, etc for 120k—
If no big work, the buyer comes in and makes 20k in equity – You are looking to retail the home as long as there are no big prob’s with it(except for updating=thats ok)…Just my experiences…good luck, let us know how it comes out.
You need to offer a deal that nets cash to the estate, since the estate must wrap up the deal within 9 months of the death. You could sign it up and assign your contract, or you can double close and make a profit. That doesn’t sound like that big a discount, though. I would try to get it for under $100k.
Re: House is free and clear–no O/F—what can I offer? - Posted by JuliaAnne
Posted by JuliaAnne on March 04, 2000 at 20:53:46:
The owner is not dead–just in a nursing home. Her daughter has power of attorney and wants to sell to help pay nursing home costs.
methinks the daughter has just now placed the prop on the market–has not contacted a realtor and may not really know what to do with the property. Could be she was just the one in the family to do something to help with nursing home problem. She has not indicated an urgent need to sell and she may not realize how hard it would be to sell for cash and/or does not yet understand the tax problem or understand creative owner financing . I plan to look into more on this one before making an offer but will keep you posted.