Hello everyone, so I am looking for some ideas on what you investors think about this situation or if anything can be done...
My 86 year old grandmother lives in a 4b/3b home that she owes $70,000 on probably around $200,000 in equity, and in a good market could get $350,000. The house is way too big for her and she wants to get rid of it. As we all know in this market it is very hard.
Now, right across the street from where I live their is a perfect ranch that is a 2b/1b pre foreclosure. We have spoken with the owner, she has it listed with an agent and she is asking $159,000.The inside is gutted completely, so needless to say its a big rehab project. The same ranch next store is listed for sale for $150,000 . We offered her $130,000 for it but she said no she is looking for $150 to make some money, being she still owes $125. Being a little greedy if you ask me, but anyways is there any ways around this to where maybe we can convinve her across the street that she's not going to get $159 and possibly maybe do a rent to buy with my grandma's home now and possibly pull the equity out of the house to buy the ranch if that is possible?
Any thoughts or ideas would be greatly appreciated.
Buy the house next door to the one across the street contingent on the sale of grandmas house. Whittle the price down as much as you can. Sell grandma's house, get what you can.
Don't complicate things with rehabs, rent to buys (which fail more than often than succeed), etc. It's too bad the market is what it is, that she didn't do this 2-3 years ago, etc., that's just water under the bridge.
Sounds like she'll end up without a mortgage on the smaller house, and some money in the bank. She's 86, and if you wait until the market improves, that might be years.
Sometimes, family needs and wishes trump the best creative investment ideas.
I wouldn't try any creative ideas with family involved.
Having a mortgage when you're 86 is just crazy, IMHO.
How is your grandma doing? Does she need help? Do you think she might in a few years?
How does the rest of the family feel about her house? Are they expecting to inherit it? Does she have any other assets? Does she have income?
I think first and foremost you have to consider your grandma's welfare. If she's sufficiently independent to live by herself, then selling this place and buying a condo or townhome might be an option. I'm not usually very keen on condos, but the maintenance she would have to deal with would be considerably less than a house. She would still have her freedom. Independent living apartments would be another option. We moved my grandma from her house to an apartment like this some years back (she's 90 now) and its been great for her. She doesn't have to deal with many daily chores, still has her freedom, and has people around all the time (friends, I mean, not caregivers.) Its not cheap, though.
Real estate transaction costs are so high that I'm not sure it makes sense to buy something. Combine that with the potential for needing a higher level of care, and renting some place may give her more flexibility.
If she no longer wants to deal with her house and the payments, then I think you should sell. Take what you can get and move on. If you really feel like that's a raw deal, you buy if from her for what you think is a fair price. Nothing tricky, get a mortgage and buy it. Realistically, just sell it for whatever its worth now. You imply its worth $270K now, about $250K after sales costs, so she'll have a nice $180K next egg to live off for the coming years. Immediate, fixed annuities are a way to guarantee her income regardless of how long she lives. Long term care insurance is a way to hedge against a expensive future housing arrangement.
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