Please help my grandma! - Posted by brad

import · June 30, 2003, 3:00pm

Posted by brad on July 06, 2003 at 18:01:45:

THANKS to all of you for your suggestions. I found a good reverse mortgage guy locally and it looks like that is going to be the best way to go for this particular situation.

import · June 30, 2003, 3:00pm

Posted by brad on June 30, 2003 at 15:00:28:

I’m a buy and hold real estate investor who knows nothing about selling notes. My 76 year old grandmother will completely run out of money in january of '04 and has 70-80k equity in her house. She needs at least 700/month to live on. Here are the numbers:

Home value: 110-120k
Existing Mtg: 40k

I’ve worked it over and over in the limited constraints of my brain and nothing seems to gel. I’ve thought of having her use her equity for the down payment on a couple of rental properties and I’d manage it for her, but I’m 100 miles away and she lives in a town of less than 10,000… the rental market is tough there.

ANY IDEAS APPRECIATED!

import · July 6, 2003, 5:26pm

What about a life estate? - Posted by Michael Morrongiello

Posted by Michael Morrongiello on July 06, 2003 at 17:26:02:

Brad:
Would you be willing to have your grandmother deed the property to you (or another investor) reserving a “life estate” interest in the home that would become extinguised upon her demise? She can then continue to stay in the home and have some income.

You would pay her $XXX per month for that property subject to her life estate interest.

Eg. Lets says she passed away in 5 years…If you paid her for 5 years x $700.00 per month or $42,000.00 you then have a home worth by your estimates at least $120K with something like 30% or more equity in it…

If you cannot fund the outflow each month, perhaps another investor might.

Just a thought.

To your success,
Michael Morrongiello

import · July 4, 2003, 3:26pm

What is your exit strategy? - Posted by Jim -IL

Posted by Jim -IL on July 04, 2003 at 15:26:25:

I see people below telling you to do a reverse mortgage. It sounds like your grandmother needs money. $700/month to be exact.

To do a reverse mortgage is an option. But when she passes on what asset will her heirs have left?

I like your suggestion of using the equity to buy other assets.

Think beyond your time now. Think about the future. When I look at my inheritance, I think, how will it best serve my heirs when I pass away? Sell it to the bank or use the equity to expand my assets?

Be well!
Jim-IL

import · July 2, 2003, 10:42pm

Re: Please help my grandma! - Posted by James (fl)

Posted by James (fl) on July 02, 2003 at 22:42:01:

A reverse mortgage is the way to go. She can take some cash out of the equity, and the bank will pay her every month for the deed to the property. They own it at the end of the term, or if she passes away. It is probably the best mortgage out their for a retired senior citizen.

James

import · June 30, 2003, 6:25pm

Re: Please help my grandma! - Posted by kris (wi)

Posted by kris (wi) on June 30, 2003 at 18:25:48:

Buy and manage the properties in your town and send her a check:)

import · June 30, 2003, 5:19pm

Re: Please help my grandma! - Posted by Chuck

Posted by Chuck on June 30, 2003 at 17:19:23:

Google search - “Reverse Mortgage”