**Life Tenant occupied property purchase & approach **

[Jacob Patterson]

I have come across a significant deal in my area for a property. The current setup is there is a single owner (74 year old male). He is widowed with no relatives. The property setup includes 61 acres with two separate home sites on two parcels. Currently the owner has parcel A for sale which includes 34.5 acres mix or hardwood and pasture with an old home on the property. In current condition this will not meet conventional financing. Parcel B is the remaining land with mature woods and a lake with a 3/2 home,  two other homesites with utilities and probably $150k in farming equipment. When speaking with the owner he said that he has considered selling the entire property and would sell for $350k with the condition that he can occupy the main home and 1.5 acres until death (life tenant). I would guess that the entire property and belongings would value between $800-850k conservatively in my area. I have found some information in regards to acquiring similar deals, however I think that the owner may be flexible on terms to get this financed and sold as he has health issues.

Here are my thoughts on approach possibly and would love feedback from those that have knowledge in this.

- attempt to qualify Parcel A and all but the main home and 1.5 acres of parcel B for a rehab loan for $350k. Looking at about $50k in repairs with estimated value of $400-$450k.  Through contract draw up terms of remaining home, equipment, and land to convey at death of life tenant  upon completion of purchase of the deal above. From the assessor map I have found that this is already on file as a separate parcel due to a prior family member having owned this small portion for a few years.

- Attempt to find financing the purchase of the entire estate. From what I have been able to gather this will not qualify for financing unless you control both the life estate and remainder values.

- Attempt to negotiate a deal with the owner to purchase outright for the $350k. In terms allow tenant to occupy the property ( main home and 1.5 acres) until death with rent set at $1. 

Any feedback or help with the best avenue of approach would be helpful. I know this is not a common deal, however this seems to be a very opportunity that I would like to acquire. 

Thank you in advance 

[Shaun Nichols]

IMO I think the best way to go about this is to purchase it outright and write up a lease agreement. This way you avoid the property getting tied up in probate after he passes. Another option would be to place the land into a trust for you to take possession of upon his death. 

Obviously, I would have an attorney look over all of that for you to make sure it's written in such a way as to protect both parties interests. 

As far as funding goes, have you looked into if it would qualify for USDA financing?

*I am not an attorney and this does not constitute legal advice.