Has anyone ever done a Private, Reverse Mortgage?

Question

I want to buy my neighbor's house. They don't want to sell it, but they're in poor health, strapped for cash, and want to stay in their home.

My market is super hot, and I don't want to have to compete for this house with the thousands of other investors in my market.

Also, one of my neighbors is a total jerk, and at the very least, I want to control who moves in directly next door.

Is it even possible to do a reverse mortgage privately? Would an attorney set this up? Any advice would be lovely, thank you.

Account Closed · Answer

@Mindy Jensen   I am not sure if it is legal for an individual to provide a true reverse mortgage anywhere in the United States.

I think you would be better off with doing a sale and lease back.

That is very simple and could protect both sides.  You could also use standard financing.

Mindy Jensen · Answer

Thanks @Chris Mason . I don't know anything about Reverse Mortgages, obviously!

Thanks @Russell Brazil  and @Wayne Brooks  for the life estate suggestion. That's what I thought Reverse Mortgages did. I'll keep searching for a way.

Chris Mason · Answer

How would a private reverse mortgage give you control of that? Suppose they pass away and the balance at that point is $100k. OK, so you are owed $100k. The family could still turn around and sell it on the open market to whoever makes the highest and strongest offer. Like any other mortgage lender, you'd get paid back out of net proceeds.

I'd talk to a lawyer, probably an estate lawyer but maybe a RE lawyer, but an idea might be something similar in concept to a reverse mortgage, but not literally one. Maybe you get added to title and the will, in exchange for you paying them $X,000/month for however much longer they live and live in that house. Instead of a debt instrument and a lien, you're on title and in the will.

Wayne Brooks · Answer

Yep, a life estate would be the way to go.

Russell Brazil · Answer

Ive never heard of anyone doing that, but one thing you could try is doing a life estate.