Old people are often in need of cash, either for medical expenses or maybe one last trip of a lifetime. However the majority of their wealth is locked up in the familiy home. they don't want to sell becuse they have no place else to go. This business buys old people's homes. They offer 50% of the market value, plus rent-free accommodation for the rest of the vendor's life. That could be 2 years, or 20 years. Naturally, a medical examination will be required before signing on, with preference given to those at death's door.
-- simonj, Sep 17 2010

There are many, many schemes like this. The commonest (at least in the UK) is equity release, where the owner receives a lump sum (proportional to the value of the house) in return for a large slice of the equity in their property.
-- MaxwellBuchanan, Sep 17 2010


we call this a reverse mortgage. very very baked.
-- WcW, Sep 17 2010


Yes, what MB said. [marked-for-deletion]
-- DrBob, Sep 17 2010


So not in return for a large slice of pizza then? (MB)
-- xenzag, Sep 17 2010


My nephew does something like this. He buys the house for a lump sum and then lets them pay rent instead of a mortgage. He is able to gain their trust because he is is a nice Christian guy with ties through the Church.

He is usually able to Christian them down on the price a bit, and then very Christianly stack fees against them until they miss a payment, whereupon he kicks them out like thieves from the Temple.
-- nomocrow, Sep 17 2010


This house doesn't have a prayer, though they may call it one.
-- RayfordSteele, Sep 18 2010


Isn't this just a reverse-mortgage? Reverse mortgages also provide protections for fluctuations in property values.
-- twitch, Sep 18 2010


no, guys, this is different from a reverse mortgage

He's saying buy the house, but for a lot less, but then let the owner live in it until he dies.

This could be done a couple of ways. Either the buyer contracts with the old man, saying that the old man gets to live in the house until he dies. Or you could do a certain kind of estate-ownership called life tenancy or life leasehold or something like that (I don't remember exactly what it's called). The buyer would buy the property and give the old person such an estate.

It might actually make monetary sense. Here in New Jersey, property taxes are usually 2-4% per year. You have at leat 25 years before you've paid the purchase price of your house in taxes. If the tenant pays the utilities, this might make sense. Or maybe the buyer could let the old person rent out the house (one of his rights as part of a life-estate), allowing him to pay his bills (house related and otherwise), but in the end, you still get the house.

Of course all this depends on how soon you can expect the old man to die. Hence the medical check-ups. Like a reverse mortgage, it's a bet on death.

There's a lot to this. This might actually be a doable idea.
-- EdwinBakery, Sep 21 2010


Sounds like a breach of equity law, when you put it like that. Call it a swindle, if that word means more to you.
-- infidel, Sep 21 2010



random, halfbakery