I'm a college student, and I found an abandoned house near my campus. I unable to find the owner, but I found the person who pays taxes on the property through the court house. I was able to get in touch with the woman who pays the taxes, and she was a very nice lady. She is the daughter of the woman who owns the house. The daughter has power of attorney, but can not sell the house because the mother will get kicked off of medicade. I need to look up and research the different requirements for medicade, but I was just wondering if anybody has ever encountered something like this before? Thanks, I appreciate all your help.
I woulod check into this “medicaid” claim a bit
Normally, people are allowed to have a certain amount of income and still retain medicaid. it depends some on the particular circumstances. What I would do is try to get specific details of the medicaid situation.
If she cannot have any income, you are stymied and have to go elsewhere. however, if she is allowed some income, I would see if I could craft one of three scenarios for a deal:
Do an owner carryback - with monthly payments to mom $50-$100 under the maximum allowed. Plan on renovating and keeping the property for an extended time. There are ways you can set up the mortgage so it will not be moved for further sales - for instance it has a massive pre-payment penalyt (again, so mom doesn’t get kicked off medicaid) with an automatice subordination clause (so it always stays in a second position and can be refinanced under.
If the property needs little work, see about a long-term lease. Again, make the payments for just under the maximum mom can have. Then you do the clean up, lease it out and pocket the difference for the next 10 years.
Look into the possibilities of doing the property under a land trust.
I think it’s an income thing as well. I like the trust idea, or just have the mom quitclaim it over to daughter. Have the daughter “gift” money to her mother monthly. That way she doesn’t have to trust you, but she can trust her daughter.
daughter can “pay” moms rent every month for her out of her “gift” account…
I agree with Lucky… I think the cleanest way is to convince them to quit claim it to the daughter and just buy from the daughter. Whatever mother and daughter work out money-wise is their business. However, you could do a little homework for them, like knowing that gifts under $xx,xxx per year is not taxable, whatever Medicaid implications there may be, etc.
A friend of mine came across a similar situation. They actually wanted to sell a house worth maybe 50k for 25k, because the woman would lose benefits if she made too much. We both thought they must have misinterpeted the rules, but maybe not!