Buy my house but let me die in it?

16 Replies

Just got a lead off of my DM campaign. Older lady. Has Alzheimer's Disease. Her daughters called and want to sell the home but want to let mom pass away at home first. They are trying to avoid having to wait 6 months for probate. 

My thoughts are buy and lease back or get it into the daughter's name. What do you guys think?

I like the idea of buying and leasing back. Maybe they can prepay 6 months rent from proceeds of the sale. If the mom is dying, she may not have it in mind to pay rent so you'd want to avoid being in the awkward position of asking them for late rent during such a difficult time.

Originally posted by @Jonathan Towell :

I like the idea of buying and leasing back. Maybe they can prepay 6 months rent from proceeds of the sale. If the mom is dying, she may not have it in mind to pay rent so you'd want to avoid being in the awkward position of asking them for late rent during such a difficult time.

You know that people with Alzheimer's aren't necessarily dying, right?  :)  My neighbor's dad just died last month at 95.  He lived in an Alzheimer's care facility for 15 years.  

I'd be more inclined to look at a life estate.  Really depends on the seller's situation, whether there is Medicaid involved.  Who else, if anyone, is living the house.  Lease back or life estate, you could be in it for the long haul.  

 @K. marie P. Oh c'mon now! Of course I do! She said her doctors have told her its a matter of weeks. She has several other health issues. Just signed a DNR etc. Seller is the only one living in the house. I realize with these things it could be a more long term situation. 

Buying it and then renting it to her seems like a good option to me.

Originally posted by @Ryan Dossey :

 @K. marie P. Oh c'mon now! Of course I do! She said her doctors have told her its a matter of weeks. She has several other health issues. Just signed a DNR etc. Seller is the only one living in the house. I realize with these things it could be a more long term situation. 

Is the mother of sound mind so she can actually deed away the property?  You might be looking at probate or conservatorship anyway if she can't legitimately sign.  Title companies where I am are pretty careful on this front.  They won't insure over uninsured deeds (transactions between seller and buyer with not title insurance).  And they require that the signing be with one of their notaries.  Talk to your title company to find out what they need.

Be mindful of transferring the property to a child or heir.  It could add debt or complications to title.  

Ryan, your sale and lease back transaction sounds like a good plan but be aware of any family members other than the daughter who come out of the woodwork after the owner's death and claim some ownership interest in this property.

NOTE: NO LEGAL ADVICE.

@Ryan Dossey   K marie is on target as usual.. you will need this to handled correctly to avoid any title issues down the road

We just took possession of a home here in PDX that we bought 9 years ago and let the lady stay until she passed  rent free... rescued it the day before she was going to lose it to foreclosure so got a good deal at the time.. not a smoking deal but a good deal.. however our urban core were this is located has gone nuts and the city up zoned us so I can build 3 homes on it... price points about 500k each... its in planning now and we break ground in Jan.   so it was a win win.. the lady never had to pay for anything more than utls for 9 years and we paid all the tax's insruacne ext.

Buy on a land contract, have her pay you rent which should exceed whatever your payment is to her and then either buy outright when she passes or continue purchasing on the land contract.

Very tricky situation. Not saying I wouldn't find a way to do the deal but there are exposures.

Here are the issues that initially come to mind:

1) Competency - the legal capacity of your record owner is compromised and you've been put on notice. I'm not hopeful this would be an incurable transaction

2) Longevity - As KPM Brings up, people can live a long time, despite ill health. 

3) Other family members - Daughter  may change her mind, piss off another family member or some black sheep surfaces who questions your deal. It does happen and is not rare in CA. Ask me how I know.

4) Adult protective services - Despite you trying to do the right thing, APS is quick to question your motives. When they hit, it's not just civil fines but criminal. 

There are probably other threats that ought to be addressed. Not saying these can be mitigated. I met a friend from thus forum for dinner in Sac earlier this week who showed me how he worked a deal with some similarities. 

Good luck.

She can sell you the house, but reserve a life estate. When she passes, the property is yours without the need to go through probate. Good luck.

Ryan,

Does the daughter have Durable Power of Attorney  ?

Besides all that doesn't matter if it's not a good deal. Having read a few of your posts I'm sure it is. 

If the daughter doesn't have power of attorney and there's no will, waiting seems the only option,  no ?

Sounds like I need to get an attorney in on this to make sure I don't inadvertently violate any rules. 

@Jay Hinrichs I am amazed at the deals and things I hear you work on. Sounds like you have a lot of fun and make some serious money doing it. I appreciate your advice.

I've got a meeting with mom and both daughters on Monday. This would be a worthwhile deal even if it took a few months to straighten out. 

I've found some of my best deals are the ones that take a little longer. Scares off the weak!

@Ryan Dossey   a lot of it is a west coast perspective IE cash flow is not necessary or not my number one goal most of the time.. of course there are many ways to skin a cat and many very successful cash flow investor out west.. with me I am more of an in the moment investor... my very best investment has been in bear land... path of progress pay cash and hold for 25 years but make 100 times my money.. not sure if its right  but when they cook off they are big checks.

Originally posted by @Jay Hinrichs :

@Ryan Dossey   a lot of it is a west coast perspective IE cash flow is not necessary or not my number one goal most of the time.. of course there are many ways to skin a cat and many very successful cash flow investor out west.. with me I am more of an in the moment investor... my very best investment has been in bear land... path of progress pay cash and hold for 25 years but make 100 times my money.. not sure if its right  but when they cook off they are big checks.

  "Bear" land? Black, grizzly or polar?

@Rick H.   I was watching a special on Polar bears while I was working out it carried over into my post..

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