Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Stinger72
Posts: 3
Joined: Sat May 13, 2017 5:21 pm

Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Stinger72 » Sat May 13, 2017 7:08 pm

I am seeking some advice for a new strategy that I was thinking of to get my mother out of her house that we grew up in, that is in a bad neighborhood (she's been robbed 3 times). We've tried to get her to move but she has no motivation to move, nor any money to do so. The motivation factor is just the way she is.. As an example, she never learned to pump her own gas and has to drive out of her way to find a full-service gas station (we don't live in a state like NJ that mandates workers pump gas - thank god). I've lectured her on things for years, being the vocal son, or bad guy, but I know she knows that I do it out of love.

Additional Background:

My dad passed away 9 years ago, and they did not have adequate life insurance, so I took charge of the finances and helped her stabilize things. I had to contract someone to rip down a back porch that was going to fall and cause her to lose insurance, went before the town board to lower her taxes, with the help of my brother, I rented a dumpster and we got rid of 2 large rollaway dumpsters of papers and junk that were collected over the year (packrat). I also got her finances in order, which they were very careless about. I also am paying for her vehicle, as she needed a reliable car, so I took out the loan in my name, with her as a co-signer, and am paying 80% of the monthly cost. Fast forward 9 years and she still works in the insurance industry (probably good for her, as she enjoys the work and loves the people), but we're trying to get her out of the house she's in, as it doesn't get cleaned, no maintenance, old and expensive to heat during winter, dangerous neighborhood, and is too large for her.

If you didn't notice, I do have extreme frustration with her, but she's my mother, and I do want to do everything I can to help her. I'm not in a financial situation to pay for a senior living house, but I was giving some thought to the possibility of buying a second house and using it as a rental property for her to live in. Quick research indicates that I would need to charge her fair market value, but could then take the normal rental property deductions without it being an issue that she was a relative renting from me. I'm wondering if I could then legally gift back the allowed yearly amount without that causing a problem?

This is the only way that I think this would work, as we would be buying an investment property that we would rent out after my mom is no longer there and we would be able to offset some of the cost through deductions.

Is this a relatively sound strategy? Are there other methods that I should look at that can help me offset some of the cost through tax breaks or such? She would probably qualify for low income senior housing, but she won't do any leg work to check into it.

Thanks!

littlebird
Posts: 1057
Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby littlebird » Sat May 13, 2017 8:07 pm

I think you should consider an apartment or a small condo in a senior community rather than another house at 81. It's wonderful that she still feels like working at 81, but unfortunately things can change overnight in our 80's.

Will you and she be able to afford full-time help after a fall or a hip operation? Permanently? Do you have the time to do the maintenance another house will require? With the space in a house, is she going to start hoarding again?

You're a good child. But think a little longer term. Elder's needs can change almost as rapidly as children's do.

User avatar
BL
Posts: 6786
Joined: Sun Mar 01, 2009 2:28 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby BL » Sat May 13, 2017 8:52 pm

Check out low income senior housing. This might be the ideal situation for her, assuming she will move if you set it up for her.

ResearchMed
Posts: 4365
Joined: Fri Dec 26, 2008 11:25 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby ResearchMed » Sat May 13, 2017 9:03 pm

littlebird wrote:I think you should consider an apartment or a small condo in a senior community rather than another house at 81. It's wonderful that she still feels like working at 81, but unfortunately things can change overnight in our 80's.

Will you and she be able to afford full-time help after a fall or a hip operation? Permanently? Do you have the time to do the maintenance another house will require? With the space in a house, is she going to start hoarding again?

You're a good child. But think a little longer term. Elder's needs can change almost as rapidly as children's do.


Agree that considering a condo (no stairs?) or something in a senior community for some potential companionship (especially once she is no longer working) makes sense.

And it does sound like you are a "good child", very genuinely.

But let's back up, even if just briefly...
What is YOUR financial situation? Are you saving adequately for your own retirement and other needs?
Don't forget about those, and especially keep in in mind in terms of how much you take on on behalf of your mother.

About the "gifting":
No, it probably cannot be done AS "gifting back", but I'm not aware of any restrictions on you on occasion gifting her some money if it isn't at all linked to her rent payments.
But you might want to check with an accountant about how to do this.
You don't want to jeopardize the "fair rent" status, and thus the deductions.

Better yet, why don't you spend some of the time you are already spending, and look into the low income senior housing. This would probably be the best situation for several reasons.

Good luck!
She is fortunate to have your assistance.

RM
This signature is a placebo. You are in the control group.

Hypersion
Posts: 172
Joined: Mon Feb 18, 2013 3:20 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Hypersion » Sat May 13, 2017 10:32 pm

Call up 211 and see what benefits she can get in her area.
Last edited by Hypersion on Wed May 17, 2017 5:46 pm, edited 1 time in total.

Stinger72
Posts: 3
Joined: Sat May 13, 2017 5:21 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Stinger72 » Wed May 17, 2017 5:43 pm

Thank you all very much for taking the time to respond and giving advice. I apologize for the delay in replying. I believe you all are correct that I was going down the wrong path and that I should look into other options such as senior housing, especially given her age.

I spent a good part of today calling senior subsidized housing and have located a couple of possibilities, however in looking at it further it appears I have a bigger issue at hand. I neglected divulging some of my mother's financial issues, as I am still gathering information from her and will be sitting down with her tomorrow to review and possibly go look at some places.

Her Info
    - Social Security is around $21,000 a year

    - She is self-employed by 2-3 groups to arrange meetings and organize events, newsletters, collect dues and other administrative tasks, and has done this for the last 30 years. I believe most of the groups really keep her on since she's been a part of those groups for so long, as many of the tasks she does can be automated by others to reduce hours. I don't have her exact salary, but after expenses of being self-employed, renting a small office space and such, I would guess she makes less than 20k. Ideally, she will stop doing this in the next year, but obviously without a plan she cannot afford to do so

    - She has extremely significant credit card debt compared to income, and I believe it is around 60k of high interest credit cards

    - Her income eliminates any housing subsidies, as I believe if she makes over $29,000 of gross income (50% mean income locally - Syracuse, NY) it disqualifies her

    - Her house is a 100 year old house in the city and has not been maintained, so it has very little value. I would guess to say she'd be lucky to get $9000 for it.


Now I'm looking into what else I can possibly do, and based on the circumstances, it seems my original plan is the only option as she cannot afford even the subsidized rent payment of 30% her gross income.

I am going to add to our discussion we are having tomorrow about bankruptcy for her. I don't see any other option where she can finally leave her job at 81 years old(!) and afford to live. If she left her job, we got her into senior housing (I would pay the difference until her income was counted as just SS), and declared bankruptcy, she would be able to pay rent and probably have more than she does now as long as she would change her ways (which she is very stubborn to do, no matter how much I lecture - Payback, I was a brat as a kid).

The other option, since she has no assets except a house that is more work to sell or get rid of than it is worth, would be to let the creditors battle. However, if her bank account was frozen, she could not access SS funds, and she wouldn't deal well with being served and having debt collectors calling nonstop.

If I didn't have to deal with her resistance to many of these suggestions, it would be a lot easier, but I already heard from her that she didn't want to consider a 1 bedroom, she wanted a 2 bedroom, and I had to explain that she wouldn't have that as a choice.

Finally, someone asked about my finances, and I'll provide some background information.

My Info:
    - Family of 3, make a decent income of ~$190,000. Age: Mid-40s adults, 11 year old son
    - Total combined debt for house, CC, cars (including the one we financed and partially pay for mom) and is about $420k.
    - I shudder at even including this here, but CC debt above is 100k of mostly 0% transfers that typically get paid off prior to rate expiring - Yes, this is my biggest priority to eliminate
    - 50k of the 420k debt above is 401k loans, so we owe ourselves, and pay back 2k a month
    - Retirement funds (401ks, pension (lump sum), and Roth) totals $470k after loans are deducted, but 40k of Roth is potentially earmarked for son's college funding
    - No real emergency fund outside of Roth 40k of contributions

I suppose the apple doesn't fall far from the tree with my above debt load, but the difference is that we've somewhat funded our retirement, albeit not bogglehead worthy at all. The problem is that assisting mom more than we are before we pay off the credit card debt will cause potential issues, but that is something we can make due with.

I hope I didn't ramble too much, and thank you all again for the advice.

btenny
Posts: 3872
Joined: Sun Oct 07, 2007 6:47 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby btenny » Wed May 17, 2017 6:21 pm

Can she live with you? I know that has issues but it provides a lot of improvement over the current situation. Plus she could help with your son/daughter after school. It would give her something to do if she was there to talk to her grand kid. She could help with the cooking and cleaning. I bet you have a bedroom. Plus she can still drive and go to work a little. Maybe you can even fix up her current home and try to sell it. I also bet she might like to live with you for all the reasons above. So she might accept it.

Good Luck.

User avatar
Pajamas
Posts: 1460
Joined: Sun Jun 03, 2012 6:32 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Pajamas » Wed May 17, 2017 9:52 pm

It is admirable that you want to help but honestly, it sounds like you are not in a good financial position to buy a place for your mother to live in and that she wouldn't be able to keep it in good condition even if you did. It seems like having her move in with you or your brother or helping her financially with renting a safe apartment would be a better solution for everyone instead.

If she is making less than $20k and is going to quit working anyway, could she do that so that she might qualify for subsidized housing?

Because she has no significant real assets and a lot of debt, a planned bankruptcy might be an option and being hassled by debtors can be avoided.

The first thing to do would be to get her to agree to allow you and your brother to help her and discuss her finances with you in detail. You still don't know her exact financial situation, so you can't really plan anything with certainty. It is probably worse than you think it is and it sounds like she is not really acknowledging her situation if she is insisting on a two bedroom apartment. She may not even be aware of her real financial situation herself.

It would be better to be proactive with the precarious financial and living situation, as you are doing, so I hope she is willing to accept your help.

User avatar
celia
Posts: 5856
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby celia » Wed May 17, 2017 10:19 pm

Stinger72 wrote:The problem is that assisting mom more than we are before we pay off the credit card debt will cause potential issues, but that is something we can make due with.

I disagree. The problems will only get worse if you continue with how you are going.

Neither one of you can afford to buy/rent a house for her. You need to look after yourself first or you will be in the same situation she is in when you are her age.

In addition, this is not fair to your spouse/partner. You have a good income but your assets/budget/debt are all mixed up. If your spouse/partner was in your situation, what would you think? Would you allow this to continue? Have the two of you talked about all of this?

I was thinking the easiest thing to do is to have your mom move in with you while both of you get your financial acts straightened out. Get rid of the dilapidated house as it is a liability at this point. Mark your calendar for one year from now, then financially compare where you both are now with then. Look for progress. Put it all in a spreadsheet and add a new column each month so you track it all.
Last edited by celia on Wed May 17, 2017 10:31 pm, edited 1 time in total.

Jackbnimble
Posts: 17
Joined: Mon Jan 30, 2017 10:24 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Jackbnimble » Wed May 17, 2017 10:29 pm

If you choose the buy a house route, which I would agree with some above posters might stretch your already thin budget, you can just let her live in it. You get to write off taxes and mortgage interest as your second home and since you won't depreciate it, your gain on sale(hopefully) won't be as large.

Katietsu
Posts: 554
Joined: Sun Sep 22, 2013 1:48 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Katietsu » Wed May 17, 2017 11:02 pm

Your plan sounds like a horrible idea. Other than your currently high income, you are not in a whole lot better situation than your mother. I think it was wonderful that you want to help your mother and to pay for your son's college expenses. But I am concerned that your son will be on the BH forum in 20 years asking how he can help his parents. If you lose your fabulous income, you are really in a bind.

I think the subsidized apartment and bankruptcy may end up as your best option. If your mother is not prepared to go this route now, let her take some time with idea. It seems like there is not much to lose by letting this go on for a while longer. Present all the numbers to her and let her explain to you how she is going to make it work.

You can keep making plans and gathering information. You will be ready with the information when the time comes. Also see if you can slowly work on sorting, cleaning, and clearing her belongings. Sometimes, you got to work from the sides instead of going at the front door.

psteinx
Posts: 2440
Joined: Tue Mar 13, 2007 2:24 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby psteinx » Thu May 18, 2017 11:33 am

Hi Stinger72, welcome to the forum.

Your initial post asks about basically a single approach to a single problem. But between that and your follow up, I think there are a number of potential issues that I and perhaps others here see. There's not really enough information for positive answers and firm responses, but hopefully you'll get a bunch of things to think about, and perhaps, with further back and forth, grope at some solid approaches and answers.

Main issue: 81 year old, stubborn mother with minimal financial resources where the status quo is increasingly unlikely to be viable (dilapidated housing, 3x robbed - even worse could happen, high CC debt, working income likely to disappear soonish, and the inevitable health (physical and mental) concerns of someone her age).

Secondary issue(s): Mid-40s son, with high income, but perhaps less than rock solid savings, a spouse, a 10 year old kid approaching college. Also, a brother who probably has some say/input into the situation. Other relatives of concern? Mother not especially conducive to input from her kid(s).

===

OK, let's start with some of the last part.

Who are the stakeholders, how do they feel?

You've talked about your feelings. How does your spouse feel? Are there other relatives (HER parents perhaps) who might need significant financial or other support now or in the future?

How is your brother? Is he in good shape financially and willing to help? Does he share your general assessment of the situation? Is he as involved in support for your mom as you?

Do you have other siblings, and if so, how do they fit in?

Back to your mom for a bit:

So, it sounds like:

Gross assets - House with value of $9K. Any savings at all? Car is titled to you with a corresponding loan, so probably not much equity there, and it's yours anyways?

Gross debt: $60K in high interest CC debt.

Net Assets: About -$50K - OUCH!

Income: $20K in SS, ~<$20K in working income, so total income, for now, perhaps $35Kish, likely to drop off to $20K soon.

But, even at ~$35K in income, she apparently was outspending her income, hence the $60K in CC debt.

Where has the money been going? Sounds like the house is paid for, and is essentially not getting maintained, and I assume property taxes on it are low. So minimal spending for housing, or the car (you pay for it, right?) Does she go to casinos? Spend too much on QVC? Buy unwanted presents for children/grandchildren? Buy a lot of clothes for herself? I realize it may be weird to think of someone on a ~$35K income as an overspender, but still, you should try to understand what she HAS been spending on. You've said she's stubborn - if there is some persistent financial leak, you should try to identify it - you might be fighting hard to bail water from her financial ship while there's a huge hole underneath causing further leakage.

Anyways, without a change, you're looking at a situation where with income of $35K, she was likely spending $40-$50K ish (hence the CC debt). Soon, she'll have income of $20K, the high interest and repayments on the $60K in CC debt, and still, perhaps the $40-50K in spending that she perhaps will be stubborn about reducing. Perhaps you've been subsidizing her $3-5K/year on the car. But without changes, she might soon have a financial hole in her budget in the 10s of thousands, per year.

Long post already, so I'll break more into a 2nd post...

psteinx
Posts: 2440
Joined: Tue Mar 13, 2007 2:24 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby psteinx » Thu May 18, 2017 11:40 am

OK, so, let's think more about an 81 year old mother.

How's her health? What's the plan if/when she is unable to take care of herself living on her own?

I think a new house for her, at age 81, seems like a bad idea. Really, there are perhaps 4 broad options worth considering:

1) Status quo - dilapidated house with significant crime risk
2) Regular apartment
3) Senior living
4) Live with a relative - you, your brother, or ???

In some ways, #4 might be a good option. But it can also be a relationship strain - especially if, as you have indicated, your mother is stubborn/stuck in her ways. IIRC, when I was a teen, my father's mother came to live with us for a bit, but my own mother did not like the arrangement, and it didn't last too long - my grandmother eventually went into senior living.

I'm not an expert, by any stretch, in all the ways the government (federal, state, or ???) might subsidize any of these arrangements for financially weak adults. Others here on this forum might provide more info on this, and/or you can/should research this on your own.

Bankruptcy should probably at least be considered. It sounds like your mom is financially upside down to the tune of about $50K, and the income that might have given her some hope of meeting the payments may be drying up soon. Likely worth researching...
Last edited by psteinx on Thu May 18, 2017 2:59 pm, edited 2 times in total.

psteinx
Posts: 2440
Joined: Tue Mar 13, 2007 2:24 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby psteinx » Thu May 18, 2017 11:47 am

And post #3 in this thread from me...

On to your own finances. I'll try to be brief here, because you haven't really asked.

You've got a high income. Yes, here on BH, $190K gross may feel like middle class, but it's quite high in comparison to national averages.

It's not entirely clear what your savings are. You mention retirement funds and debt, but it's not entirely clear to me what is gross and what is net.

But yeah, the fact that you have basically no emergency fund, no taxable savings, and you're shuffling around $100K in CC debt trying to keep it no/low interest suggests a less than optimal savings rate. You're a family of 3, in, I think, a high cost state (New York), but apparently in a lower cost part of that state (Syracuse). You should be able to live comfortably on $190K, pay down debts, save some, and even contribute some to mom's well being. Perhaps you should consider financial/credit counseling for yourself?

Note that with that income, you probably won't get much, if any, need based financial aid for college for your kid. You really should start thinking more formally about a college plan for him, assuming he is likely to want to go to college. Yes, there are low-cost backups, but try to plan consciously, rather than end up in a situation where you are forced into option C or D because you didn't really have a plan ahead of time.

Good luck!

psteinx
Posts: 2440
Joined: Tue Mar 13, 2007 2:24 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby psteinx » Thu May 18, 2017 12:04 pm

Also, be open to the possibility that in addition to whatever mental/physical/emotional decline may be ahead of her, that some of it may have already occurred.

Yes, she's perhaps long been stubborn and not good with money, but perhaps she's gotten worse lately?

Yes, she's been a pack rat not doing much/any maintenance on her house for a while, but perhaps it's gotten worse lately because physically she can't do as much?

User avatar
djpeteski
Posts: 39
Joined: Fri Mar 31, 2017 9:07 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby djpeteski » Thu May 18, 2017 12:18 pm

Stinger72 wrote:I'm not in a financial situation to pay for a senior living house, but I was giving some thought to the possibility of buying a second house and using it as a rental property for her to live in. Quick research indicates that I would need to charge her fair market value, but could then take the normal rental property deductions without it being an issue that she was a relative renting from me. I'm wondering if I could then legally gift back the allowed yearly amount without that causing a problem?


According to my accountant that would cause problems, even with a relation that is a bit further removed. We "rent" to my wife's grandmother. We do not claim a loss, or deduct any of the costs other than the property tax that we pay as part of normal itemization. Instead we just eat the cost of running a "rental".

User avatar
Elsebet
Posts: 294
Joined: Mon Feb 08, 2016 2:28 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Elsebet » Thu May 18, 2017 2:46 pm

I sympathize, I am in a very similar situation. My 81 year old mom lives alone in a tiny town in PA, I currently live across the country in WA. Her house is paid off but it is huge and old: 4 floors, 4 bedrooms, and filled to the brim with junk (hoarder). It's also in dire need of maintenance, my dad did not spend money maintaining it while he was alive. It is not worth fixing up in my opinion, it would be a "This Old House" level project that no one would be able to afford to buy in her tiny, economically depressed town.

I have been trying to interest her in selling the house (as is) and moving to the senior citizen apartment complex in town but she refuses because of the junk in her house. She will not move out here with me even though I have a private MIL suite she could have all to herself. Honestly I would feel bad moving her away from her friends and the town she lived in most of her life anyway. I too thought about buying a house for her but there are very few options in her town other than similar big old houses that would be just a new set of problems.

I have resigned myself to the fact that I have no recourse, but I'm following this thread too for helpful ideas.

ResearchMed
Posts: 4365
Joined: Fri Dec 26, 2008 11:25 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby ResearchMed » Thu May 18, 2017 2:57 pm

Elsebet wrote:I sympathize, I am in a very similar situation. My 81 year old mom lives alone in a tiny town in PA, I currently live across the country in WA. Her house is paid off but it is huge and old: 4 floors, 4 bedrooms, and filled to the brim with junk (hoarder). It's also in dire need of maintenance, my dad did not spend money maintaining it while he was alive. It is not worth fixing up in my opinion, it would be a "This Old House" level project that no one would be able to afford to buy in her tiny, economically depressed town.

I have been trying to interest her in selling the house (as is) and moving to the senior citizen apartment complex in town but she refuses because of the junk in her house. She will not move out here with me even though I have a private MIL suite she could have all to herself. Honestly I would feel bad moving her away from her friends and the town she lived in most of her life anyway. I too thought about buying a house for her but there are very few options in her town other than similar big old houses that would be just a new set of problems.

I have resigned myself to the fact that I have no recourse, but I'm following this thread too for helpful ideas.


Have you considered using elder services about the hoarding?
We had to do this with SIL.
She was pretty upset at first (her situation was mandated by the degree of hoarding... public safety risk).

Interestingly, now, about 2 years later, her sparsely furnished condo (the same one!) is still clean and - importantly - sparsely furnished.
It was SUCH a relief to her to have that all over and done with. She was obviously aware of the problem (that might not always be the case), but she hid it from all of us. (We never knew until the Fire Department condemned her condo when they couldn't get inside to double check/follow up about a smoke detector that went off in a different unit.)

And for MIL, we used a service that specializes in moving elders, starting with amazing sensitivity about "what to keep, what not to keep" (and what gets donated, what gets "trashed" - in other wording - and what gets packed to follow her).

There are more and more services like this, given the increase in the number of elders, and relatively different housing arrangements, compared with years/decades ago.

RM
This signature is a placebo. You are in the control group.

Mudpuppy
Posts: 4904
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Mudpuppy » Fri May 19, 2017 1:48 am

It's not a good situation to be in, but I agree with the others that your finances are stretched thin and buying a condo could be the proverbial straw that breaks the camel's back. To save money, I have a not so elderly (late 60s), but unexpected immobile, family member staying with me since their house in my town is not wheelchair accessible. It is not fun, particularly since it looks like mobility will not be restored this time around (we went through this about half a decade ago and therapy was able to get the family member walking again back then, so it was a short-term stay in my guest room).

It's been six months now and I really do want my house back. To say it has strained the family bonds is putting it lightly. But convincing the family member and spouse to give up their non-accessible house for an accessible one has not been successful, since they see this as giving up on the therapy to restore mobility. They also have hoarding tendencies and horrible finances, so that seems to be a common trend in needing to help aging family members.

In this case, I've had quite a bit of time to prepare and I spend far below my income, so I have more than sufficient financial cushions to help them. I currently have a healthy net worth, direct 30% of my income into savings (mostly retirement, but also some taxable savings), have more than a 75% down payment for condos in this town in readily-accessible savings (minimal tax hit to access), and have enough to get a condo for cash outright in less-accessible taxable savings (would prefer not to touch at this time due to tax hits).

So this is more an emotional decision for me (convincing the family member and spouse). But for you, there is a severe financial consideration since you are stretched so thin as it is. As others have said, you need to take care of your finances first, even if it means having your mother live with you while you get your finances in order. It's like the standard safety advice: put on your own life vest first so you don't drown trying to save your family member.

Buffetologist
Posts: 285
Joined: Sun Aug 22, 2010 8:58 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Buffetologist » Fri May 19, 2017 3:14 am

You should check out the following list of State Supervised Middle Income Housing for Seniors.

http://www.nyshcr.org/Programs/Mitchell ... pments.htm

These are often very affordable senior rentals. I'm more familiar with them in NYC, but they are statewide and often very good deals and very well maintained.

Stinger72
Posts: 3
Joined: Sat May 13, 2017 5:21 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Stinger72 » Sun May 21, 2017 8:05 pm

I spent some time last week and over the weekend working on the situation with my mother and family. I am fortunate to also have a wife that wants to help out my mom, and she has been helping push this as well. Anything I do, I do with her blessing and there are no secrets between us.

I can't tell you all how much I appreciate the responses, as direct as some are, they are absolutely correct in terms of the secondary issue of my finances, and we are cutting our spending back. We have lived much too on the edge, and there is absolutely no excuse for our debt load with the income and cost of living that we have in upstate NY. I won't go into details on our plan here, but we just simply need to stop spending on "experiences", pay things off, and then resume spending within our means and increase savings. We have taken many vacations that we should not have, and have brought mom and other family along as well to enjoy many of them. We do want to live life to the fullest while we are healthy and while we have as many family members around us as we can, but not at the risk of financial ruin, which I agree is only a layoff or lost income away.

Back to mom...

Some additional background: I have 2 brothers and 1 sister, only my sister is in any position to help out financially, and she has a husband that is the primary breadwinner (and makes well over $100k) and she is always crying poverty, and even has my mom pay for lunch, or such, which absolutely sickens me. As to where my mother's money goes, she does have some horrible habits of buying junk she doesn't need or use, going to bingo or the casino, and spending way too much on getting gifts for others during holidays. I have always made sure that I give her money around Christmas time as part of her present since I know she spends so much even when my wife and I lecture her (my siblings don't really follow the same lecturing that I do to her).

Steps Taken:

I was able to convince her after looking at finances closer that her only option is chapter 7, I was able to fast track things and have an appointment on Monday afternoon with a lawyer and her to file paperwork and review the debt with them. Already reviewed things high level with them, and they agree that this should be an easy case. I probably ought to shop around some, but it should cost $1500 total (including court fees) and they require $350 down tomorrow, which I told her I would pay. I also found out she has a retirement fund (still need to know what it is) that has $32,000 and another that has $11,000. Need more details on them, but saw that the larger one was getting $30 in fees deducted from it every month. I think at initial glance that we should use $400 - $500 a month (which would last 7-8 years) to subsidize her apartment for now with the ~$1805 a month she gets from Social security.

I called numerous places during the week and found that she can't apply for any senior housing, as she currently has a gross income over $29,000. Until she stops working she cannot even consider this. So, I researched and found a couple senior apartments (non-subsidized) and also regular apartments that might work. On Saturday, we had four total apartments to tour after my son's soccer game. The first, was a one bedroom (625 sq ft) at the senior house for $950, which included heat, water and basic cable. She felt it was much too small and asked to see the two bedroom, which drove me nuts, as she can't even afford the $950! The two bedroom, she loved, but it was $1150. I can't win. She said if she's going to move, it would have to be somewhere she has enough space, which essentially translates into "I won't have enough room for all my crap".

The rest of the places were not senior apartments (no others available that were under $1000) and two of them she hated, and of course another one that was newer and more expensive she liked, but all of them would be too tight on a budget, even if I could believe that she would stick to one.

We may be able to get more than I thought for the house, so I'm working that front as well to look into the market and speaking to some relatives that are close to her and in Real estate that might be able to assist. If true and we can get 30k, that would give her another $200 - $300 she would be able to draw from after she stops working. Now we're getting more complex with the timing of everything, so here is the overall plan:
    - Bankrupcy - Chapter 7 First
    - Stop paying credit cards ($1525 / month) and put it into a security deposit
    - Work out budget and understand life without her credit cards and what she must change
    - I don't think she can move out of house until case is closed, or house might be considered non-exempt (asking lawyer on Monday)
    - Move into apartment once bankrupcy is set, hopefully less than $1000/month, sign 1 year lease
    - Once moved, work on selling house
    - She plans to stop working in a year, although we all know at 81, that plan may not work - Once she stops working, get on list for subsidized housing
    - Fight with mom to give up current apartment and move into smaller (most likely) subsidized apartment

I see the result most likely in me conceeding to pay $100 - $300 a month to help her in rent to get her out of the house, but I won't do that unless all hope is lost with her and it is the difference between her agreeing to do this, or not.

Moving in is certainly a last resort, she would drive me nuts and I don't want to do that to my wife either, so I'm going to pursue as many other options as I can. I also need to sit down with my sister and brothers to make sure they are onboard, and to put some pressure on my sister to start helping some financially and not taking anything from my mom in terms of gifts, lunches, etc! My mom is also talking to her sisters who are younger and also trying to help accomplish the same thing for her, so we do have some other support.

Thank you all, and to those with similar problems, I wish you all the best of luck!
Last edited by Stinger72 on Sun May 21, 2017 8:26 pm, edited 2 times in total.

ResearchMed
Posts: 4365
Joined: Fri Dec 26, 2008 11:25 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby ResearchMed » Sun May 21, 2017 8:12 pm

Does the attorney know about that $~$40k?
That might affect the bankruptcy, or at least the timing.
If the attorney doesn't yet know, it might be worthwhile to pass that info along before any other meetings.

Good luck!

RM
This signature is a placebo. You are in the control group.

Katietsu
Posts: 554
Joined: Sun Sep 22, 2013 1:48 am

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby Katietsu » Sun May 21, 2017 8:34 pm

I think you have done an excellent job with your research and new plans. You may wish to see if the Senior apartment has a person who could speak with you alone about your mother's hesitation to move. Most such complexes have a director, social worker or other staff person who is a great sounding board on the transition your mother is facing.

I was one of those concerned about the risk to your family from your original plan. However, at your income level, you should be able to help with a couple of hundred dollars a month for a year with only a minor impact on your financial situation.

JGoneRiding
Posts: 626
Joined: Tue Jul 15, 2014 3:26 pm

Re: Advice Needed: 81 Year Old Mother - Buying House to "Rent" to Her?

Postby JGoneRiding » Mon May 22, 2017 9:32 am

ResearchMed wrote:Does the attorney know about that $~$40k?
That might affect the bankruptcy, or at least the timing.
If the attorney doesn't yet know, it might be worthwhile to pass that info along before any other meetings.

Good luck!

RM


The attorney of course needs to know, But retirement assets like homestead are protected and the creditors shouldn't be able to access them. The issue may be that the Mom should be? pulling RMDs and those the creditors would have the right to try and claim


Return to “Personal Finance (Not Investing)”

Who is online

Users browsing this forum: cusetownusa, JWooden10 and 48 guests