Seller occupied until she dies

[Eric Rich]

Someone at the grocery store told me their Mom was wanting to sell their house. I inquired further and it's just down the street from where I live. The property is prime for a subdivide into 2 properties. The property is over half an acre and all clearances look good to me.

I haven't had a conversation with her yet, but she is quite old, I believe late 80's or early 90's so I assume the house is paid off. She wants to sell the house, but live in it until she dies. With her being that old, I imagine that a seller finance won't work. I am not very legitimate on paper, so I don't expect I could pull off a traditional loan. I have mortgages on 2 properties. I have $120k available to me through a HELOC and I could likely get $120k out of a HELOC on my other property. I imagine they will want around $550-$600k for the sale of their house.

I love this neighborhood and there is already rezoning taking place so I think within the next 5 years I could either build a single family on a flag lot, or tear down and built a multi family unit on it. How should I structure this deal with a sort of reverse mortgage situation built in?