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- October 18, 2011 at 9:06 am #370253AnonymousInactive
Say you are 85 and you have no more retirement money left. But I offer you 50% of the value of your home up front in cash. In exchange I now own your home, but you have the right to live in it till you die. Would you consider this to be an ethical, or predatory business?
If you died the next day, I would collect the home, but if you survived to 130, I would have to wait a long time…
Yes. This is similar to a reverse mortgage, but I would immediately own the home, and the elderly person would immediately get a check for 50% or so of the value of their home. I would not move into the home, this is just an investment strategy. If the elderly person ends up having to move to an old folks home, then they would be allowed to rent their home until they died, but the renter would get kicked out in 1 month after the person died, so the renter would not be able to do a long term lease.
chaseunchase, yes the elderly person could (and would probably be wise to invest the money). If they were to get a large gain on the money, they could end up ahead, but it would be high risk for them. So it would make sense if they invested in lower yield, low risk investments since once they are out of money, … ‘game over’ so to speak.
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