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I have a financial advisor friend who wants to help his client (named Tom) and is considering a reverse mortgage.
Tom has a 100k HELOC on his property with an estimated value 850k. Cash flow is a problem for Tom as most of his net worth is tied up in this property. He lives off social security and a small salary.
The property is well maintained, in a great part of town, in a beautiful area of south FL.
He wants to remain in property, but needs to increase monthly cashflow.
The reverse mortgage does not appear to provide enough cash flow.
Are there any options I am not thinking of?
When giving the seller’s situation, you’re not giving enough detail; too broad brush.
Q: Can the owner get a loan?
Q: Is the owner willing to sell an Option to the property?
Q: How much of a short fall is the owner having? Is this a $5,000/month problem or a $500.
Q: What is the age and condition of the owner? Elderly and failing health or young and in good health?
Q: Why is a broke person living in an $850,000 house? $850,000 homes are expensive to live in (uts, taxes, insurance, upkeep, landscaping).
Q: Does the owner live there by him/her self for is other family in the home?
Q: Is the owner willing to trade this expensive house for a much more affordable house. Maybe take back a note on his/her expensive house so he/she receives monthly payments.
I can think of 50 more questions to ask this owner. You need to dig. Be curious. Get to the heart of the problem. Can’t structure a solution until you FULLY understand the owner’s situation.
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