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?

[Jay Hinrichs]

Quote from @Bill B.:

Talk to @Jay Hinrichs I know he’s bought some homes like this. You definitely want to take title so Medicare doesn’t come after the house. (They still have 5 years I believe to come after the money.). Talk to the relatives so you aren’t accused of elder abuse and none of them dreams of moving in someday. And know that it could be 10 days or 10 years before you have the property free and clear. Who’s responsible insurance, property taxes, maintenance, repairs, etc etc. 

Bill your correct about the 5 year notation you made..