Updated about 5 years ago on . Most recent reply
purchase of home with reverse mortgage / seller gets life estate?
So the home I'm looking at is not updated but is in good condition and in a fantastic SF suburb. Just appraised for $2,200,000 & CMA was $2,460,000-$2,630,000. ARV value should fall between $2,800,000 -$3,400,000. There is also a small cottage on the property that rents for $3,000 per mo.
Home currently has a $1,187,000 reverse mortgage. Owner is a family friend. She is 92 years old, bedridden, and in congestive heart failure, and in immediate need of funds. She could get another reverse mortgage paying $149,000 but would like larger sum. We've discussed a possible price of $1,700,000 on the property with the understanding she could remain until she passes. Holding costs - property tax & insurance should run around $16,000 - $20,000 per year, and this would be offset by the $3,000 rent per month from the cottage. Trying to assess the pros and cons.
Thoughts anyone?