Buying a house before the owner goes into the nursing home...

2 Replies

Here is the situation. I have a potential deal where the owner is currently in the hospital and the kids want to get rid of the house. They've already contacted an appraiser to look at the house and the owner is on a waiting list to go into a nursing facility. The house is in need of major repairs and I'm in the middle of calculating everything. Once the owner is in the nursing facility she has 9 months of private money before medicare kicks in. I understand that medicare does a look back on property and could potentially come back for their cut. 

The kids are looking to move the house and be done with it even if they have to owe money in the end. It holds 2 mortgages which amount to 79k, the house conservatively once fixed up could be between 120k - 130k. How can I structure this deal? Should I have the kids start talking with an elder law attorney? From what i understand is that these situations are shaky to begin with. This will be my first deal. 

Looking for some insight on how to structure. 

the kids can do nothing. Unless they have full power of attorney. And even then I am not for sure they can sell,without the owners permission. And it will come up in the 5 yearblookback for medicare purposes. It should be appraised in order to keep from it looking bad under the DHS look.

The current owner can sell it anytime she wishes as long as it is at a reasonable price and not a sham sale. 

The kids do have full power of attorney. The mother has "functional dementia" so she cannot make any decisions. 

As far as the appraiser goes, do they value a property that is in need of major repair, basically as-is value? they look at the housing market and base it off of recent comps? I'm still in research mode here and trying to cram this all in to understand it fully. 

When I say major repair; All new electric, gutting half the house for insulation and re-wiring, new roof, kitchen, etc... I'm curious to know if these or any type of repairs are even considered in their evaluations vs. what comparable are going for in the area.

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