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Never has there been a time like today, when our seniors have been so threatened with losing their home in such numbers. It's not like they all have an alternative place to go!
Low supply of last-resort-care
As terrible as medicaid assisted living is, you would be challenged to even find a vacant spot. That's how much demand there is for last-resort-care and how much trouble our society is in.
They never planned on this economy
Seniors who retired and are on on a fixed income planned on the economy of pre-2022. They didn't budget for beyond that. Otherwise, they might never have retired knowing what they know now about prices and inflation.
The environment was favorable - what happened?
Many bought their homes prior to 2022 at what would be about 50% of its value today in only a few years. Had they also used a conventional type of mortgage, it was secured at a favorable 2%-4% rate. What went wrong?
The world around them changed and diluted the stable and favorable elements underpinning their cost of living.
Taxes doubled
That mattered less for homestead owners, but for 2nd home owners it made ownership much less affordable because the taxes on their primary home, wherever their residence was, ALSO doubled. That means their cost of living from the standpoin of real estate taxes only quadrupled!
Insurance doubled
That may have had less of an impact on owners who were free and clear, (though it did have a substantial impact on cost of living), but it had a major impact on mortgage holders. WHat made matters worse was the impact of insurers dropping policy holders and causing banks to force place expensive insurance on policy holders. Then insurers lowered the roof age for preferred rates to 15 years old, (next year it will be 10 years old), and you have a massive number of already populous baby boomers who are burining through their ficed incomes at a rate double of what theywere spending only a few years ago.
HOA fees went up
That mattered less for those living outside of an association, but for those governed by an association with a management company, the costs of landscaping products and services, their insurance, energy, and other raised costs passed onto the association got passsed to the homeowner.
Rates doubled
That mattered less for owners who did not have selling on the horizon and a fixed 2%-4% mortgage. But for those who were moving to independent living, or at least moving into a different living situation, Buyers could no longer afford to purchase the same house at the new rates, leaving the sellers either stuck or dropping their proceeds substantially.
Prices for every day items doubled
you would think that might not matter as much, but it was unbiquitous. Food at the supermarket, toilet paper, eggs, chicken, milk. It was all up 30%. Then you addd increases in car insurance, liability insurance, gasoline, utilities. Its all conspiring against the populace.
Credit card carrying costs doubled
What do people do when they dont have the cash on hand? They charge it, but now rates are 25% for carrying interest. If they charged a procedure or an expensive necessity, or even put a flight or hotel on credit card, the interest is eating at their budget. If it was very expensive, it may be difficult for them to pay down and therefore making it impossible to remove.
home prices doubled
On top of all of those collective increases, home prices doubled and are STILL going up in some places. That might not matter so much if it were not accompanied by all of the other increases that have left the prospective buyer unable to qualify for a loan. That means the seniors cant get the price
Seniors already cant afford their lifestyle. Insurance is set to increase, but now the maximum age for a roof to secure preferred rates is dropping to 10 years. That means homeowners will have to spend thousands to repair and recertify, or replace a $10,000-$40,000 roof
Solutions
An advance for equity:
Maybe the homeowner just needs a chunk of cash to payoff some debt that has been causing them trouble.
Instead of lending them money we would give them that money for the right to buy the house at a later date. That would enable them to remain in the house without having to make another payment on top of any already existing payments, or on top of any existing bills or costs.
Subsidizing costs:
If their financial issue is more ongoing, we are able to subsidize costs like taxes and provide a lump sum in exchange for future ownership.
That allows the senior to reallocate their spending, puts extra cash in their pockets every month, and allows their continual enjoyment of the property and community paid for by their future equity. Its better than a reverse mortgage because they can rent, and they can leave for more than 6 months without being foreclosed on.
No agents, no comissions, no repairs or updates, no cleanup, no cost whatsoever.
Understand your options
If lowering your price and selling for cash presents no obstacles or downsides, there’s no need for an investor. But when the transaction contains challenges, undesired results or unwanted consequences, that’s when investor involvement truly benefits the seller.
Find out what we can do for you to help you get the most from your property ownership.
