My mother wants to keep her home in the family and not let it be taken by the state or any creditors. She is almost 70 and wants to retire soon. She has $200k in savings, plus she has a home valued between $525-700K. She has no debt except an $80k mortgage remaining. She has not had it appraised yet but using comps in the area these are the numbers. House is in pretty good shape, it has a recent new roof, new boiler, new water pipes etc. Oil heat, gas stove for extra heat in really cold weather.
I have 3 siblings. None of them would be in a position to buy the home from her. One has a house of his own, one is married and not in financial position to buy, and the other is disabled (receives SSD). She would expect to give 1/4 of her estate to each of us when she passes (if any left).
She wants to continue living in the home until she is not able to take care of herself. She has a boyfriend and it is possible she would get remarried but as of now, that is not happening so she wants to plan for other possibilities.
She has floated the idea of selling the home to me (when I am financially ready) at a somewhat below market price (gifting equity) and paying me rent (essentially the property taxes of 10k a year and home owners insurance of $400 per month) plus possibly some other utilities that she wants. I would be more comfortable having an owner-occupied home than dealing with the rental property tax issues (but also looking for advice on that). I have heard I can gift her the difference between market value of rent and what she pays me each month to pay back the equity gift (if it's more than what my share should be).
I can probably handle a mortgage of $250k-300k. If I did this, I would clear all of my other debt first (except the very low interest student loans) and have an emergency savings. I have a lot in retirement relatively but not in cash so need to set that up in the next 1-2 years first. I wouldn't want to do this with any debt.
But how can I get from a value of $525k (which she could sell it to me for, or maybe less depending on what she wants to do) to $250-300k mortgage?
If I paid her out, I want her to have at least $400-500k in savings so she can pay me the $1250-1500 a month (she gets $2300 in SS a month).
The house is in an area that is very hot, with summer homes and city people buying up second homes. I'm very attached to the area and can see myself moving back at some point. It's a beautiful and special area. I think not having a home (either owned by me or her) there would hurt me so that is why I am considering this plan.
Any input on how to make sure it's not too much expense for me? I will have to pay a little rent myself because it's too far to commute for me to live there too. If I got married, we would be renting another apartment together, or we would buy another home, but I don't expect to spend more than $1000-1200 a month on rent.
I make $113k at the moment and expect it to go up. Again, wouldn't do this without building up some substantial cash savings. I have $135k in IRAs, age 33 and am maxing those out (want to continue to do that). If she passes one day or moves, I might sell this one and buy a small home in the same area so my long term expenses are lower.
So has anyone done this before?