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#16
04-23-2018, 09:17 PM
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Ralph for the win as a reverse mortgage worked in my Mother-in-Law's particular case. Beyond the financial benefits, it allowed her to remain in her home which was also a benefit in terms of maintaining her independence. I explained to her at the time that her home was an asset that she had invested in over the years and now it was time to tap the investment. We also retained an attorney who specialized in elder care and estate planning so that family emotions were kept at bay and an air of neutrality was established.
Doesn't sound to me like anything you do...take 401K or whatever....makes the burden of his mortgage payment easier. Big tax bill from sell off part of his retirement plan probably more than cost of a new mortgage. Spend down the house value, and let the 401K grow. it all balances out. 
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#17
04-23-2018, 10:05 PM
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Thanks to all who took the time to think about this and post a recommendation.
To address a few issues... He already had a reverse mortgage of sorts on the house and that has now ended and converted back into a traditional mortgage. I don’t have all the info on that, but I’ve asked him to get more information about it for me so I can learn exactly what it is and what the terms are. He had apparently been drawing cash from it for a number of years to help finance primarily repairs to the house, college tuition for my siblings and me and medical bills for my mother when she was fighting cancer. Money was tighter than I knew as I was growing up and my parents, while not the best with their finances, never really spent any money on themselves and sacrificed a lot for their kids. That’s why I feel bad for my dad and compelled to help. The house he lives in now has been in the family for generations and is where my siblings and I were raised. It’s on a bunch of land (90% of which is in a forest management / conservation trust or something along those lines) and in the middle of nowhere. I would buy it from him now if I could and let him stay there, but I’m just not in a place now where I could swing it— I’m in my late 20s, just bought my first house about a year and a half ago and we have two boys under 3. My father is very clear that he wants to live on the property as long as he’s able to and I want to help him do that if I can. I do have space for him in my house and have offered that as an option—it will likely come to that some day, but hopefully not for at least several years. I need to find out more about the current mortgage status and also help determine the best option for property number 2.
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#18
04-24-2018, 06:22 AM
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The second house seems to me to be the place to start, assuming the market where it is is decent.
I would not do a major renovation--but do a flipper's renovation--curb appeal (front yard redo), wash siding, fresh paint, rip out old carpets, clean etc. If the kitchen is awful--maybe paint the cabinets and do new countertops. The problem with selling as-is, is the discount rate is pretty high, since the market will be flippers or young folks without money, and either way, you will not do as well. I was looking after a house for a local realtor where the elderly owner mostly moved out and left the rest of his stuff scattered around. The house was filthy, carpets were not cleaned and a bunch of low hanging fruit to make it look better (kitchen cabinet doors hanging by one hinge, faucets dripping--easily repaired) were left undone because he was old, tired and done with the house. The yard was a mess as well. The place looked like it was on its way to becoming a crack house. It sat, and sat, and finally sold at a huge discount. I agree with the poster who said starting into a major renovation can uncover stuff you don't want to deal with, but maybe you and your brother's family could deal with a blitz clean/painting/address defects/yard clean couple of weekends. The payback would be huge and the house will sell more quickly. If you are pressed for time, there are a lot of people who clean and paint for a living--hit your local Benjamin Moore or Glidden paint store, and ask for a recommendation for a painter for example. Do some nice flowerpots for the front stoop--make it look like a home. Last edited by paredown; 04-24-2018 at 06:25 AM.
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#19
04-24-2018, 09:03 AM
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#20
04-24-2018, 10:23 AM
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The grandparents House has to go and you should probably put him on a Fixed income/budget. Given he is so young - Annuities may be a good idea with the 401k. But take the money from the Grandparents house and buy an annuity as well. In reality the big property should probably go - pay off the mortgage and use the remaining principle to fix up the grandparents house and have him live there if it's a lot cheaper to run. Then you are maintaining some family history. Big properties are expensive.
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#21
04-24-2018, 11:01 AM
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annuity
annuity
There are many versions Most the fee (think big fee) are paid up front which reduces the amount invested and the overall return over years But look for one with out those fees Still annuities not a great investment has seller is looking to make a lot of money thru fees charged Just invest funds I like systems Find one like merriman or others that use a system to invest Picking one stock or bond or mutual fund at a time has no direction
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#22
04-24-2018, 01:20 PM
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#23
04-24-2018, 02:32 PM
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I just went through a similar process with my parents. Despite being in investment/credit risk my whole career, my father wouldn’t listen to my financial advice, even to consult a financial professional. My father passed earlier this year and now I have reconfigured my mother’s financial situation to focus on capital preservation (we are near a next recession within the next few years) and dividend/interest income to supplement social security.
A few things: 1) Get a financial advisor that can provide advice for a fee for each visit (rather than one that works on commission or annual flat fee based on percentage of assets). 2) 401K: if the investment choices in the 401K are good for your goals and risk appetite, you may want to leave the money there. If unsure, it could be rolled into an IRA and self-directed based on the advice from the advisor. I changed the assets to focus on relatively stable values and dividend income through a mixture of ETFs and stocks. 3) Sell grandparent’s house and put the money into account for further investment. He may need the money for future healthcare costs. 4) Draw up a budget and find where to cut costs - for example, does he pay life insurance premiums? You may want to let it lapse or cash in for the surrender value. Does he qualify for property tax reductions for seniors (varies by locale and may have none available) - for example, my mother qualifies for 50% reduction in property taxes on Long Island, which is significant. 5) Senior discounts - he may qualify for other discounts for seniors (hardship) on his utilities and medical prescriptions. 6) Current house - if he refuses to sell and/or your family is interested in keeping for inheritance, can your family members contribute monthly to the upkeep and mortgage? If not, it may result in forestalling the same conclusion - selling the house or foreclosure to the bank if he runs out of money (e.g. medical emergency - medical debt is #1 cause of personal bankruptcy in the US). At the very least, you could work on a transition plan to downsize. When you project the financial costs to your father to continue living in the home, it may sink in that he could run out of money. As another posted, it is unlikely he can obtain another reverse mortgage. If you have some other questions, you can PM me. Sent from my iPad using Tapatalk
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#26
04-24-2018, 05:34 PM
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Lesson to be learned here.... Don't over extend yourself as you plan for retirement - make sure house, cars, etc paid off well in advance. Get rid of that too big house before you need to.
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#27
04-24-2018, 09:42 PM
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How the heck do you find this person? I've been trying here in MA and totally have been striking out.
[QUOTE=veloduffer;2354032] 1) Get a financial advisor that can provide advice for a fee for each visit (rather than one that works on commission or annual flat fee based on percentage of assets).
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#28
04-24-2018, 09:50 PM
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#29
04-24-2018, 10:46 PM
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Another option for starters is, depending on the value of the second house, sell it on a land contract. Some people would jump at the opportunity to buy a fixer upper without jumping through the bank hoops and expenses with a little smaller down payment. Amortize the the balance over 15 years at an interest rate slightly higher than the banks current rate with a balloon and rate adjustment in 5 years so you can raise the rates if necessary. It might make it easier to sell and provide your Dad with a little extra monthly income. Do not cash out the 401K. The taxes will be ridiculous. Talk to a CFA or CPA on what to do there. Good luck. I hope it all works out well.
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#30
04-25-2018, 08:27 AM
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[QUOTE=NHAero;2354258]How the heck do you find this person? I've been trying here in MA and totally have been striking out.
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Look for a Certified Financial Planner (CFP), who have to be certified by the Certified Financial Planner Board of Standards. In other words, they have a fiduciary responsibility to work in your best interest. Many only charge by the visit/consultation. You can look for one in you area here: www.cfp.net Sent from my iPad using Tapatalk
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