Friends -Has anyone done a reverse mortgage on a mobile home? (Been given title from an elderly person in exchange for letting them live there free or low cost until they pass away.) How did you structure it? How did it go?Thanks,-jl-
I don’t see a benefit for you in that type of transaction, unless it is a space that you would like to control. When the owner passes away, you will probably have an opportunity to purchase or own the home at a low cost.
I read this post a couple of times already but never did the math, so to speak, Actually, Jefferson, this sounds more like a life estate than a reverse mortgage. It may not be a bad deal for you provided that you have all the paperwork completed and title transferred before your tenant passes away. It would probably benefit the heirs, too, by relieving them of the burden of probating his property, if any. In a life estate, as I recall, you own the property but give to someone else the right to live there until they pass away. Please post here what the final outcome is. We should not ever rejoice in someone’s passing, not even our enemies, but it would be both beneficial and educational to numerous people, I’m sure, to know how things went.Jim Allen
The practicality of the transaction would depend on the age and health of the individual. From a business perspective you would need to estimate the anticipated loss of rent compared to the value of the home. If the individual would be expected to die before the lost rental income reached the value of the home then from a business perspective it could be a possible option.I would need to be reasonably confident they would die before the lost rent surpassed 60% of the value of the home. It’s a business gamble I would likely not take and would instead simply suggest they sell and move on. Park owned homes in my opinion are never a good idea.