Investors Need a Buyer? Consider Reverse Mortgages: A Solution for Seniors

Many real estate investors already know about Reverse Mortgages.

However, I bet many newer ones do not. Truthfully, I am still trying to wrap my hands around this concept.

Many investors are having a hard time finding buyers, because many buyers have no cash or credit to buy. A possible solution to help is Reverse Mortgages.

Oversimplifying this, Reverse Mortgages allow (some) seniors to get a monthly payment from the bank or some other lending institution as long as they live in the house.

There are some rules. The senior MUST

• Be, at least, 62-years-old
• Have no remaining balance (or nearly no balance) on his or her home
• Live in this PRIMARY residence

A Reverse Mortgage is a loan against the equity in your home that you do NOT need to repay as long as you live in the home. The monthly amount the senior receives will depend upon the person's age and home value.

Let's be fair. There are downsides.

• When the senior passes, the monthly payment he or she was receiving turned into a loan that needs to be repayed. There is interest on top of this, too.
• Also, if the person living in this home dies, the home is sold to repay this debt, and the home cannot be passed onto his or her heirs.
• If the person living in the home decides to move, the loan--plus interest--will need to be repaid.

How can this help an investor?

• Seniors can use the money they get from the reverse mortgages to buy an investment property from you. You now have a buyer with some money, which is a premium quality in this credit-starved market. Don't you think?
• If you have a senior family member who qualifies and wants to live in his or her home until death, this can be a potential income source for your investments, provided he or she trusts you (and you are trustworthy).

If someone reads this and realizes that I explained something poorly or incorrectly, let me know, and I will fix it.