Author Topic: Multi-Generational/Family Idea - Case Study  (Read 2879 times)

doublethinkmoney

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Multi-Generational/Family Idea - Case Study
« on: July 17, 2014, 12:30:17 PM »
Hello! This is my first post! I am a new follower and slowly transitioning my husband and I to this lifestyle. 

My husband and I live in an modern industrial 1,000 sq ft condo, 1 br and 1 1/2 bath in a popular area. We plan on starting a family next year and hope to move some place larger but could manage.

However, my husbands parents are in their early 80s and his mother recently is suffering short term memory loss (very noticeable amount), my fear is that this might spiral to many more things. It has been our thought that we do not want to have to "put them in a home". His father is having trouble adjusting and isn't very patient or understanding about her memory issues. Otherwise they are both in good health. We send them $300 a month to help with their expenses. (My husbands family is Asian and it's typical for children to help support their parents after they leave the home.) I am fine with this as they don't have much savings and live off social security, & they depend on this extra cash.

Bottom line, they live in the same city as us but 20 min north. We are thinking of purchasing a home with a detached garage apartment. His parents like the idea. We can live in the main house and they can live in the apartment or vise versa. We believe we can buy a sufficient home for this from $300k (hopefully less, needing work done) or $400k (finished). We can use $100k from the sell of their home to decrease the mortgage to an affordable amount for us and put the other amount in index funds and some in a checking for them. We would take care of their utilities and they can use their SS for car ins., groceries, savings etc.

I think the time to make this adjustment is sooner than later, as they may have trouble adjusting as they get older. Also they can see future grand baby and do some light baby sitting.

Break down:

-Our home is worth about $130k and we owe $194k (I know!) @ 4.25 %.

-For now, we would be at a $300-400 LOSS per month to rent it, I would like to keep it and pay it down for future income since we can't sell it without a significant loss. This can be canceled out by the $300 we give them monthly as they won't need it if we are taking care of most of their expenses.

-His parents house is worth about $250k with no mortgage, no significant additional savings

- His parents do receive SS checks and Medicare, at this point in not sure how much but will be finding out

-There is his sister but she cannot help financially as she is a SAHM and they live in a different state.

-finding a home either finished or the ability to add the apartment should run about 300k to $400k. The cheaper the better, we can fix it up.

- we will not get approved for another mortgage until we have a lease signed on our condo, the idea is for this to be our permanent home in our names. We can always rent out the apartment later on.

Is this a good idea financially? In what order should we proceed? What have we not thought about.

My husband is gun-ho about looking at homes but I rather rent our place, sell their house and then look at homes. I want an action plan! We don't have the cash flow to be paying for two mortgages. Thanks for the advice and help.







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« Last Edit: July 19, 2014, 05:54:09 AM by doublethinkmoney »

ambimammular

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Re: Multi-Generational/Family Idea - Case Study
« Reply #1 on: July 18, 2014, 09:57:50 PM »
You're in a tough spot. Your in-laws only asset is their home, so they have to sell or perhaps rent it out. Do they receive any government assistance? Are there any other siblings who could pitch in financially? Are you all in the same city?

Given how limited the situation is could you all hunker down in the condo for a year while the parents' home brings in some rent money and the market improves. If the condo is too small, you could all stay at his parents and rent the condo out. You may not get enough to cover your mortgage payment, but it would still be X amount more than you're making living as two separate families.

Their failure for planning hasn't left you many good options.


doublethinkmoney

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Re: Multi-Generational/Family Idea - Case Study
« Reply #2 on: July 19, 2014, 06:03:55 AM »

You're in a tough spot. Your in-laws only asset is their home, so they have to sell or perhaps rent it out. Do they receive any government assistance? Are there any other siblings who could pitch in financially? Are you all in the same city?

Given how limited the situation is could you all hunker down in the condo for a year while the parents' home brings in some rent money and the market improves. If the condo is too small, you could all stay at his parents and rent the condo out. You may not get enough to cover your mortgage payment, but it would still be X amount more than you're making living as two separate families.

Their failure for planning hasn't left you many good options.

Thanks for the thoughts.

To answer your questions:

-they do receive Social Security and Medicare.

-There is another sibling but she is a SAHM in another state so she can't send money and they don't want to move up there.

-We do live in the same city, they live 20 min north of us.

That is a good option to rent first, stay with them (or my parents as they live in the same area as well and won't add to my already too long commute to work). Probably would have to rent a small storage unit temporarily to store our furnishings but we would still be able to bank some money in the process. Stash some cash while we look to buy a home with enough property to add the apartment or one that already has one. Then we can rent or sell their home. It's a great property but I like the idea of selling so we have the money there immediately for them, not just for our future investment.

As soon as we all get in the home/property, it's very manageable. My concern is the journey there.




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lizzzi

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Re: Multi-Generational/Family Idea - Case Study
« Reply #3 on: July 19, 2014, 06:23:17 AM »
Make sure that where you end up living is going to be handicapped accessible for your in-laws. They may not need it now, but at their ages it would be sensible to get a place for them with no stairs, wide enough doorways for wheelchairs, and so forth. I am really concerned about your mother-in-laws memory loss. That should probably be evaluated by a neurologist. If she has a definitive diagnosis for whatever is causing it, you can make better plans for the future. We are in a blended-family situation with little children 6,5 and 3, and an 89-year-old grandpa with end-stage Alzheimers and Hospice services at home. It is actually do-able, believe it or not, but lots of flexibility, cooperation, and good will is needed. We live in two separate homes, just around the corner from each other. You seem to be looking for separate living quarters, and I think that is the best way. The seven of us all lived under one roof for six months, and while it was do-able, life is better with each family having separate living quarters. I have found that the needs of the elderly and of the very young do not always complement each other. (I know the OP was thinking more about financial issues, but there are huge social ramifications, too. )

doublethinkmoney

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Re: Multi-Generational/Family Idea - Case Study
« Reply #4 on: July 19, 2014, 06:36:19 AM »

Make sure that where you end up living is going to be handicapped accessible for your in-laws. They may not need it now, but at their ages it would be sensible to get a place for them with no stairs, wide enough doorways for wheelchairs, and so forth. I am really concerned about your mother-in-laws memory loss. That should probably be evaluated by a neurologist. If she has a definitive diagnosis for whatever is causing it, you can make better plans for the future. We are in a blended-family situation with little children 6,5 and 3, and an 89-year-old grandpa with end-stage Alzheimers and Hospice services at home. It is actually do-able, believe it or not, but lots of flexibility, cooperation, and good will is needed. We live in two separate homes, just around the corner from each other. You seem to be looking for separate living quarters, and I think that is the best way. The seven of us all lived under one roof for six months, and while it was do-able, life is better with each family having separate living quarters. I have found that the needs of the elderly and of the very young do not always complement each other. (I know the OP was thinking more about financial issues, but there are huge social ramifications, too. )

We had definitely thought about making sure it's single story. However, I didn't think about the wheel chair access. That is a great point and will make sure to add that feature if it's not there. Makes me think of making sure the bathroom is handicap accessible and has such features as well. Excellent thought.

We have had his mother go to the doctors and so far nothing appears to be abnormal but I due suspect we may be in very similar circumstances in the future. We may need to have home care come to the home in the future, who knows. I rather this, instead of putting them somewhere, so that we can watch over and make sure they are properly taken care. It will also probably be financially cheaper as well.

I agree on separate living spaces, people need privacy. They will most likely mingle and have dinners in the main house but as long as we have a space to retreat to (master bedroom) and they as well, I think it's manageable. I also like the idea of when we do have a child to have them be able to see them often and have something to look forward to. I think that's important for when people get older, have something to keep them motivated.

Thanks for your post.


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