I have the opportunity to purchase an old home at a huge discount and it seems like a no-brainer but want to hear from fellow monkeys
My grandma owes $60k on her house that's listed around $280k on Zillow/Redfin. My proposal is I write her a check for $60k today, and when she dies, I get the house. She would live rent-free until she dies.
The risks I see are that she could live another 20 years (great for me, financially not as ideal), the basement floods, and the whole house would probably need remodeled. I've never flipped a home and have no idea about the costs associated with doing so.
From a financial perspective, it makes sense. I'm getting an asset that would appreciate at a huge discount today
This is common practice in France. There are actuarial tables to show the fair price based on age of owner and price. I'd feel shitty waiting for grandma to die but even worse if she was paying a mortgage.
Get a qualified contractor you trust to walk it and note/estimate total repair costs especially plumbing, electrical, roof, hvac, mold, moisture penetration, foundation. Home inspectors are useless so don’t waste time with them or rely on their assessments.
Exactly. If they were worth their salt, they'd be contractors.
I know this is coming from a place of goodwill and good intent, but if you haven't unfortunately experienced it yet, be very careful about mixing family and money. Especially "real" money like this. I'm not trying to talk you out of it, just wanting to make sure you've really thought this through because "no good deed goes unpunished". And something as significant as a home can become an extremely volatile issue come estate settlement time. Obviously, I'm talking from experience (hence the unfortuantely tag earlier).
If you did (which again, mad props for taking care of family man), definitely make sure it's in proper writing. Beyond the money owed on the note, don't forget that it's not actually "rent-free" since there's still taxes and utilities and as you mentioned, who's responsible for repairs and damages?
And definitely do what lkjhg said and get a contractor to do a proper walk through as well.
I absolutely second this.
My father is by far the most financially successful of his siblings and has bought more than one home for his parents (my grandparents). My grandmother is now almost 100 and still sharp as a tack, but she has been put into a care facility. Ever since she left her house, one of my father's siblings (my aunt/uncle) is staking a claim to this house and saying they are entitled to an equal share of the sales proceeds (which my father paid for 100%, his other siblings contributed fuck all). The problem is that my father didn't get everything in proper writing since it was for his mother (he pretty much just wired the money at closing when the house was bought decades ago)
Where is this property located? I ask because taxation and a few other protections require specific types of paperwork and leases.
a 60k on a 30y 5.5% mortgage is like $350 a month, easily covered by social security if your grandma is on a fixed income, so really this is just a free 200k gift to you and doesn’t really benefit anyone else, especially if they’re well off
just seems like a bad idea overall unless this is what your grandma wants and it’s her idea. Even if your aunts/uncles are well off, people are weird with inheritance/money and it will cause drama That it’s not being split equally among their children. If I was your cousin and found out about this, I’d be very pissed off
what kinda piece of shit are you thinking about helping your grandma as an investment and calculating when she dies, and saying it's financially not ideal if she lives long. she should have swallowed your grandpa's cum and never created you.
what value do you add? and monkey shit is because I voice over unpopular opinions. I could be posting about how great Chicago is, how diversity programs are unfair, how democrats are fucking up this country, and how vaccines shouldn't be mandatory, and I would have 100:1 banana to shit ratio, but I don't care about virtual points and it's more fun for me to speak truth. good luck treating your family as an investment, don't forget to network with them over Christmas.
Location?
Comps ?
Not information but here some homework for you. Do you read the local news? See any new developments happening in the local area, such as private or public investments? What is your local government like? Things like that you need to pay attention to. I think the property is good but you need to look out things that would make it great. Not easy to do but can help with research. Last year I bought and it has gone up over 25% in little over a year and still rising. Did I know this before I bought ?not really but I expected it to rise a bit. Secondly, do you have a team behind you like realtor, finance banks, insurance, builders/contractors etc?
Do not do it. If everyone is rich/well-off why do you even need this hassle man. You will get part of the inheritance anyways.
Like other dude, grandma was in a bind between moving homes when younger I stepped in and allowed her to move and sell her existing home. To make it clear I said will take all responsibility but no ones input to make process go smoothly. For years other family members blamed me “for selling early, not timing market”, some stopped talking to my mom about it and so on. Just a weird situation all around. Like I tied up capital (during repairs/sale), made no money, grandmas new home has appreciated more than last home (so estate went up). Only good from it was to see my grandma be happy herself. Unlike your family everyone aint well off, so no estate share for me.
Your situation seems no one is in a bind and therefore no reason for your grandma to make this deal. You get “minor financial upside” and major personal headaches.
If, you are looking to sell, please let me know.
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