Here is an interesting story from CBS5, Man Will Trade Home for Cash. Deal Comes with a Catch.
Apparently Mark Ligerman is willing to put your name on the deed to his home for $18,000 (or “a new car and some cash”). But this is no traditional sale.
The catch is, you have to be willing to let the 65-year-old Ligerman stay in the home until he dies.
There’s a very sad component to this story. Seems Ligerman’s wife and son were killed on Sept 11, and at that time he moved here to take care of his father who passed away a few years later.
So Ligerman has no real family. He’s also, according to CBS, lost his job, can’t find another one and is running out of cash.
The video with the report (unfortunately, CBS5 doesn’t allow video embedding) says that Mr. Ligerman has consulted with an attorney and suggests anyone interested do the same.
And I couldn’t agree more.
While I applaud Mr. Ligerman’s creativity, I question whether it would be a wise move for someone to take him up on his offer.
Consider this…
Ligerman “promises to pay” on his $60,000 mortgage until the new owners move in. That’s nice and everything, but keep in mind he has no job, can’t find one, and is running out of cash.
What happens if he doesn’t pay? As the owner-waiting-for-someone-to-die, you have a couple of choices:
- Let the bank take back the home, your home, that is attached to Ligerman’s mortgage.
- Evict the 65 year old man with no family.
- Start making the payments yourself.
None of those are very pleasant options.
What happens if he dies next week? You’ll be making payments on a $60K mortgage. And you’re out the $18K you paid up front.
What happens if he lives another 30 years? Well, assuming he pays his mortgage, you’ll have the home free and clear. But is that worth 18K? According to the public tax records, Ligerman’s home is located in a “PLANNED MOBILE HOME SUBDIVISION SITE”. It appears to be a manufactured home that has had some structural work built around it. This type of home generally declines in value over time – they rarely appreciate.
What happens if the home burns to the ground? Does your insurance cover it, or Ligerman’s? What if he doesn’t keep up with insurance payments?
If you take this deal, you’re basically going to be a landlord with a tenant with a lifetime lease. And you’ve paid that tenant $18,000. Your return is you get what appears to be a manufactured home in what looks like questionable condition at some undetermined point in the future – if he continues to make the payments.
I wish Mr. Ligerman the best, he seems like a nice man who has had some rough times. But personally, I think you’d be crazy to take him up on his offer. If you are one of the “about 20 people” that have contacted him, or if you decide to do this, get an attorney to draw up the documents. You might want to consult with a CPA as well, especially if you think you can treat this like an investment property for tax purposes.
I'm Jay Thompson, and I have a little blogging problem... Welcome to The Phoenix Real Estate Guy, or "TPREG" as I fondly refer to it.
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