I am looking for advice and /or opinions on something we are thinking about.
We are considering possibly funding something that basically amounts to a private reverse mortgage.
We would be using a real estate lawyer and a title company to set up the agreement, check the property for title issues, etc.
About the deal:
What we would do-
Fund (and pay directly) property taxes, property insurance, and maintenance projects for a property.
What we would get-
A lien on the house for the amount of money that we put towards the above items.
A legal option (not obligation) to be able to purchase the house at a discounted price ($150k) based on today's market value ($190) when the couple passes away or decides to sell the house.
About us:
Unmarried couple m-48 f-38
Assets approx. 1.45 mil
Debt 250k mortgage
Annual income $120k after taxes
Annual saving $90k (including amounts paid towards principal on mortgage).
Annual spending $30k after taxes
About the possible lendees:
Elderly couple that have been family friends of my SO since he was little, and that he considers his aunt and uncle. M-90 F-80
Savings depleted.
Small pension plus social security as income
Own a house in southern California, but have a reverse mortgage on it.
Have 8 additional family members (leaches) living in said southern California house - one pays $250/ month rent, one contributes food to the household, others pay nothing.
Some sporadic rental income from vacation home that rents as a vacation rental. Own this one outright. Loves this house and the opportunity to get away from the craziness of the primary house.
About the house:
Built 1982, 2000 sq ft, 6000 sg ft lot, lots of deferred maintenance, and decorating from the 80's. 4 bed/3 bath
Zillow est of $235k
My research using realtor.com makes me believe that it would sell for about $185-190k
In a small mountain town in southern California.
Taxes about $2k annual, insurance about $2k annual.