What to do with Grandma's property, ideas please.
My grandmother passed away recently. She had a reverse mortgage with a current payoff balance of $150K. The house is in near-perfect condition (Grandpa maintained it well until he passed). I haven't gotten a BPO or appraisal yet, but looking at comps the house on 11 acres in this rural town is worth $210K-$240K. Her heirs are her three sons. None of them have any interest in taking on a mortgage to turn this into a rental or flip it, they are all greiving for their mom. Since I've never done a flip I wouldn't be comfortable taking out a second mortgage (although I could front the $30K for the downpayment with creative financing). I know a flipper that would love to get ahold of a "paint and carpet" flip with 60K-90K equity in the deal, and she would be willing to pay a finders fee since she regularly deals with wholesalers.
My question is: Can anyone come along and purchase the house for the amount owed to the reverse mortgage company? My thinking is that only the sons can purchase the home for $150K. If they don't buy it then everyone else will get a chance to purchase it when the reverse mortgage company lists it on the MLS at appraisal value. Is my thinking correct?
Another interesting wrinkle: My father (one of the sons) purchased the 75 acres of farmland adjacent to this property shortly before Grandpa died, to lower their property tax bill. This was before the reverse mortgage was in place. Dad now owns the right of way (driveway), and the well for the 11 acre property. In order to sell the property the reverse mortgage company would have to dig a new well ($10K) and cut a new driveway, 200 yards from the road and bridge over a creek (an EPA/DEP nightmare to permit).
Any ideas on how to approach the reverse mortgage company? Any ideas on how to extract the equity from the property for the brothers? They are all successful and financially sound, but it would be a shame to just let the property go. Any thoughts are greatly appreciated.
-Matt Swearingen