"rent back" till death

4 Replies

I've recently come across a seller (a 91yo lady) who wants to sell her house with seller financing, interest only, with at least a 10 year balloon here in Oregon with approximately  $10k down.  All fine and dandy.  The clincher: She wants to "rent back" the house (with the rent amount being equal to the financing cost) until she passes on. At that point the 10 year clock would start ticking and the payments would go to her heirs.   I'm okay with it but:

1) is there a better way ,tenants in common maybe, that have us split taxes, insurance, etc., till she passes.  In case she finds the fountain of youth of a sudden.

2) is that legal?

3) is it possible for her to not be my tenant per se.  (I.E. a clause that I don't pay for any repairs or maintenance under $400 or better yet relieves  me in  total from being her landlord)

4) any other consideration I should take?

I don't  want an option: she could stop paying insurance and  taxes or get liens, etc. and I'd possibly lose the asset and my option $.

Thank you for your go headedness!


Does this deal make sense for you?  It seems like you would make no money while she was still living in the home (if I understand what you are saying).

Orlo Flock
What if she lives to be a 120?

Do you want to be married to a 93 yr old woman?

What if you want to sale, move, or take the first no return trip to Mars?

Bottom line is your tied down to this situation until death do you part. I wouldn't let my hunger to be in real estate to hold me hostage, there's to many good deals out there to get trapped into this one. Run forest!!

Okay,  thanks for all of your concerns.  And noted.  

@ Jeff Sheraton:  Yes the deal makes sense.  At the terms I'm buying in my market, this deal makes sense all day long. The only liability I would need to pay would be Taxes and Insurance, thus this post's origin, but I'm working on a solution to that. I'm buying the property (but in another context, I'm really taking a loan at a really great interest rate) and will be exchanging, at my convenience, the collateral to another property that has the equity and cashflow to support it.  And when she passes on, the deal only sweetens.  

@ Perry Ivy and Dawn Anastasi:  If she lives to be 120 years old I hope to become famous as the landlord of the newest Guinness Book of World Records oldest person!  ;)  Thanks for the interesting article though. But in all honesty I believe she called me because she is worried about her health as is.  

If she does live that long I am purchasing and owning a house today at little out of pocket at today's market cost.  If I take possession of the property in 40 years the underlying lot alone will most likely be worth more that the house today.  I'll take the risk.  I'm happily married and am not a polygamist.  If I move to Mars permanently, I'll either sell the house (and tenant contract) to some young buck or put it in a will to my children whom I hope will outlive the 91 year old woman.  I'll also come back to this forum to make sure you get the props for calling it....  if I get a wifi signal on Mars....

I think I've answered all the questions and possibly double-octo-genarian questions,  can anyone answer my questions?

Do Later Now,

       Orlo Flock