UCGal, thanks for your out-of-the-box suggestions. I did not actually see this thread until early evening yesterday and could not respond until now.
Yes, patience is my middle name. My timeline for selling my personal residence is 4+ yrs. from now. Essentially what your co-worker did here was give the (sr. citizen) owner a “life estate” in their own (former) residence with a 10-year cap on occupancy.
I could see where this could be attractive to a sr. citizen owner because the up-front and sometimes separate “draw-down” fees on a reverse mortgage eat up too much of the equity. I could imagine that these fees would be even higher now, because the RM lender may be worried about future value and saleablility.
You mentioned that your co-worker charged a “nominal rent.” I wouldn’t mind charging a bit less than market since there would be no move-outs but “nominal” would not even cover half the carrying costs and landscaping svc. I would also be concerned that my new “greatest-generation” tenant has not paid rent/mtg. in decades and also had Prop. 13 tax treatment so is not USED TO PAYING THESE THNGS. Wouldn’t they tend to feel that even a reasonable rent I would be asking for was exorbitant?? Due to the advanced age of the tenant, I would probably feel more comfortable if their rent was paid to me automatically every month from their bank or trust acct. I also don’t see them maintaining the property as tenants don’t normally do this.
Do you know the extent of maintenance that was performed by the seller/tenant in your co-worker’s property performed? How old were they when they finally vacated and why did they vacate early??
I’m also skeptical that there would be any heavy or cosmetic fixers available anymore whose backyards are facing dtn. SD with an unobstructed, sit-down view within the house. I would have figured they have all been bought up, rehabbed and flipped by now or their “rehabbers” are still enjoying them.
If I try to do this in this day and age and cannot drive the price down far enough, I would probably have to get a passive equity-partner or a (temporary or for the life of the contract) “silent second” to make a deal like this. I would not want to buy a “keeper” property as tenants-in-common with another party on title for a variety of reasons.
Thanks again for the interesting idea, UCGal! I think it might be doable if the mechanics of the “life-estate rental-contract” were properly spelled out.
