Elderly & Dissabled Parents Need Help

[Daniella Hernandez]

Hi, my parents are in a financial crisis. My dad just had a stroke that left him disabled and unable to work. He is going to require 24/7 help. My mother is the caregiver of a granddaughter and now my father, so she is also unable to work. They are both in their mid 60's and don't qualify for disability. They have about $200k in equity in their home. Our first idea was to downsize their home to reduce all expenses and be mortgage free. My husband are I are willing to help in a way that can provide them with some kind of income, if we were going to use their equity and invest in real estate for rentals instead of having them buy another house cash with the equity they have if they sell their home. We have savings and perfect credit. What would you do? Any recommendations?  Contracts? TIA

[Michael Lee]

Hello.  Probably I  would sell the house and delete all debts.  I kind of know what they are going through because I had a brain annuerism and a stroke about 7 years ago at age 54 and I still cannot walk or get to work.  I get no financial benefits and our daughter has 1 semester left in college.  It must be the community state of Texas and the SSA can consider my wife's salary and that was why I was turned down for any benefits from them because they said my wife makes too much money.  Luckily, I paid off my mortgage about 21 years ago and it is being a charged of interest only at 2.99% which only costs us about $300 a month for a 4 bedroom hose just outside of the city of Dallas.  I'm lucky that my wife is a computer programmer that makes about 75K per year and has a nice boss that only makes her work in the office for 1/2 a day but pays her full time. We barely get buy without incurring any long term debt and sending our daughter to the University of Arkansas.  Our daughter has made the Honor's List the last 2 semesters and has matured real well and she works about 20 hours per week to help us out.  I could go on and on about the pros and cons but I will spare you from that right now.  I'm sure that your father would like being at home where he is more relaxed.  Luckily my mother is paying for my full time nurse that works here about 40 hours per week.  I would try to do whatever makes your father comfortable.  Can he stay alone at any time?  I am currently spending about 5 hours per day at home alone while my wife is still at work.  Physical Therapy is important for him and hopefully his insurance provider will pay for his transportation or your mother might have to do it.  Some Physical Therapists will come to his home.  One of my eyes was damaged during my brain surgery and made me wear glasses to see things close up like my computer, book reading, and television because I currently see double.  Luckily, my wife works for a company t5hat makes eyewear, so I get it pretty cheap.

Hopefully your father will heal quickly and be able to live a regular life.  I thought that I would only be out of normalcy after 6 months but that has turned into 7 years and I still eat through a tube that should be replaced about every year and a half.  I had that medical problem even though I was in good shape. His insurance, if any is had, will pay for what he needs or has to pay for.  He needs to understand that you get less for a buck than you use to.  Staying at home is many times the best way to go.  It all might be determined by any insurance he has.  You need to think long term if he is likely to live for a while.  That might help to make your financial decisions.  I have stayed at many assisted living centers and I hated it, especially at night.  Rent payments are usually pretty expensive and it is hard to accept going from a normal house payment to a payment that is much higher.  It would be great if your mother can help some but remember that she might feel worn out before your dad is well.  If you decide to sell the home look for an apartment deal that instantly provides positive cash flow.  Do not buy any houses because that is too risky.  Do not count on any good things to happen. One possible path to take might be for your father to provide owner financing on his house with a Subject To or Lease Option sale with a down payment that is non-refundable.  Feel free to ask me any other questions you might have.  Be creative.  It is nice that you both are willing to help.  Best wishes!