A Primer on Reverse Mortgages

Today the concept has gained widespread acceptance as seniors have found it to be a great solution to rising expenses and fixed incomes.

 

Unless you have been living on Mars or some other distant planet, by now you must have heard about Reverse Mortgages. Wherever you go in this country or even abroad, you can see Reverse Mortgages discussed on television, hear about it on radio, or read about it in a newspaper. Just turn on your television now and see what I mean.
The topic is frequently written about in local and national news media. As often as not, the authors of these stories project themselves to be authorities on the topic but don’t have a clear understanding themselves. They haven’t done their homework, or they simply took uninformed comments made by someone else and treated those comments as fact.

Their lack of knowledge does not stop them from spreading misinformation with no remorse.

Last summer, a major news network personal finance commentator announced that a reverse mortgage was a way for senior citizen to receive money by selling their home to the bank, who then took the house from them when they died. We immediately emailed the commentator to make the correction but to no avail.

Today, let’s try to help you have a better understanding of this wonderful retirement funding tool that all this hoopla is about.

Simply put, Reverse Mortgages date all the way back to the 19th century France where it is said the first Reverse Mortgages were done. In England, back in 1940, the story goes that a resourceful lady came up with an idea to buy homes, and rather than pay cash for them she allowed the homeowner to remain in the home, for an agreed lifetime rent. However, Instead of collecting rent, she deducted it from the purchase price of the home. Then, at a later date when the sale was completed she would deduct the unpaid rent from the proceeds of the sale. She was able to buy five homes this way, where the people died before they used up their rental arrangement. She was then able to resell the homes, to someone else, and in some cases the same home several times.

“This could have been the first Lease Option!”
In Modern times the Reverse Mortgage concept had a resurgence in Portland, Maine when Nellie Young and Deering Savings and Loan Bank collaborated on a Reverse Mortgage in 1961. In 1977 the RAM (Reverse Annuity Mortgage) was introduced by a savings and loan firm in Ohio.

Today the concept has gained widespread acceptance as seniors have found it to be a great solution to rising expenses and fixed incomes. Some folks are using Reverse Mortgages for increased monthly income. Many seniors are using Reverse Mortgages to pay off a mortgage with undesirable terms. Some folks are taking advantage of the cash option and using the large sums of available cash for a variety of other purposes, while others simply leave the funds in a line of credit with the lending institution that allows them to access the money whenever they need it.

A Reverse Mortgage is a retirement funding solution that helps seniors remain independent thru their golden years with safety and security not offered by any other mortgage product.
The advantage of a reverse mortgage can be endless, but different, so have your questions answered by an expert, not the news media.

Case in point, we were working with the Founder of an investment club who is in his 70’s and has a home worth $1,500,000. Due to the fact he could not prove income and there was some credit issues on his credit he was receiving a high interest rate on his loan. By securing a Reverse Mortgage he was able to pay off the existing mortgage and received cash in excess of $300,000.00.

He then was able to lend out money and receive a high interest rate. Which allowed him to earn more money then it cost him. By not making payments on the old mortgage he had money to spend on other items. I have found many seniors working with their family in this way and are able to invest in investment properties. Some have even been able to secure foreclosure properties since they had the funds to pursue them and cash to rehab them.

With the increase of foreclosure properties and having cash available this can open many opportunities for people.
“I know that I know what know, I know what I don’t know, and I know what I need to know”

Updated 13 Shortsale Property Package ~Great Income Producers

I just got some hot deals and I wanted to let you know as soon as possible I’ll get these properties or available find some other investors and go in and take all these properties of my hands. Check out these numbers subtract the renovation figures if you can do better. But you can’t beat these numbers. Drive by take a look at it, and submit your offers.

4090 Old Spanish Trail, Boynton, FL

$49,900

3 Bed, 1.5 Bath Home

Potential Rental Income $1,000 month

Currently Vacant

 

Sales Price	$59,900.00
Taxes	$1,000.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,200.00
Utilities	$0.00
HOA	$0.00
Vacancy	$600.00
Total Expense	$5,500.00
Rental Income	$12,000.00
NOI	$6,500.00
Net Yield	10.85%
Gross NOI	20.03%

All figures approximate. Great house in good area with central a/c. Price includes $10,000 renovation credit.

1377 7^th Street, West Palm Beach, FL

$39,500

3 Bed, 1 Bath Home

Potential Rental Income $1,000 month

Sales Price	$58,000.00
Taxes	$1,430.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,200.00
Utilities	$0.00
HOA	$0.00
Vacancy	$600.00
Total Expense	$5,930.00
Rental Income	$12,000.00
NOI	$6,070.00
Net Yield	10.47%
Gross NOI	20.69%

All figures approximate. Price includes $10,000 renovation credit.

1441 8^th Street, West Palm Beach, FL

$39,500

3 Bed, 1 Bath Home

Potential Rental Income $1,000 month

Currently Vacant

Sales Price	$58,000.00
Taxes	$1,501.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,200.00
Utilities	$0.00
HOA	$0.00
Vacancy	$600.00
Total Expense	$6,001.00
Rental Income	$12,000.00
NOI	$5,999.00
Net Yield	10.34%
Gross NOI	20.69%

All figures approximate. Price includes $15,000 renovation credit

 

619 8^th Street, West Palm Beach, FL

$259,000

2 Bed, 1 Bath Home

10 UNIT APARTMENT BUILDING

2 Bedroom, 1 Bathroom Units

Potential Rental Income $7,500 month

Currently Vacant

 

Sales Price	$349,900.00
Taxes	$3,000.00
Insurance	$3,000.00
Management Fee	$9,000.00
Maintenance	$9,000.00
Utilities	$0.00
HOA	$0.00
Vacancy	$4,500.00
Total Expense	$28,500.00
Rental Income	$90,000.00
NOI	$61,500.00
Net Yield	17.58%
Gross NOI	25.72%

All figures approximate. Price includes renovation credit.

1621 Tropical Drivee, Lake Worth, FL

$35,000

2 Bed, 1 Bath Home

Potential Rental Income $850 month

Currently Vacant

Sales Price	$39,900.00
Taxes	$1,137.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,020.00
Utilities	$0.00
HOA	$0.00
Vacancy	$510.00
Total Expense	$5,36700
Rental Income	$10,200.00
NOI	$4,833.00
Net Yield	12.11%
Gross NOI	25.55%

All figures approximate.

619 59^th Street, West Palm Beach, FL

$39,900

2 Bed, 2 Bath Home

Potential Rental Income $900 month

Currently Vacant

Sales Price	$42,000.00
Taxes	$1,305.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,080.00
Utilities	$0.00
HOA	$0.00
Vacancy	$540.00
Total Expense	$5,625.00
Rental Income	$10,800.00
NOI	$5,175.00
Net Yield	12.32%
Gross NOI	25.71%

All figures approximate. Solid home in good rental area with central a/c. Price includes $10,000 renovation credit.

 254 Lytton Court, West Palm Beach, FL

$79,900

3 Bed, 2 Bath Home

Potential Rental Income $2,000 month

Currently Vacant

Sales Price	$115,000.00
Taxes	$3,000.00
Insurance	$1,700.00
Management Fee	$2,400.00
Maintenance	$2,400.00
Utilities	$0.00
HOA	$0.00
Vacancy	$1,200.00
Total Expense	$10,700.00
Rental Income	$24,000.00
NOI	$13,300.00
Net Yield	11.57%
Gross NOI	20.87%

All figures approximate. Home with cottage in Historic area of WPB. Price includes $XXX renovation credit.

5344 Bosque Lane, #104, WPB

$39,900

2 Bed, 1 Bath Home

Potential Rental Income $900 month

Currently Vacant

Sales Price	$42,000.00
Taxes	$200.00
Insurance	$0.00
Management Fee	$1,200.00
Maintenance	$1,080.00
Utilities	$0.00
HOA	$3,120.00
Vacancy	$540.00
Total Expense	$6,140.00
Rental Income	$10,800.00
NOI	$4,660.00
Net Yield	11.10%
Gross NOI	25.71%

All figures approximate. Beautifully renovated townhome in desirable rental/owner area. Price includes $2,000 renovation credit.

 3850 Orange Street, Lantana, FL.

$45,000

3 Bed, 1 Bath Home

Current Rental Income $900 month

Currently Occupied

Sales Price	$59,000.00
Taxes	$863.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,080.00
Utilities	$0.00
HOA	$0.00
Vacancy	$0.00
Total Expense	$4,643.00
Rental Income	$10,800.00
NOI	$6,157.00
Net Yield	10.44%
Gross NOI	18.31%

All figures approximate. Price includes $6,150 renovation credit.

 

4001 San Castle Blvd. Lantana, FL

$39,900

3 Bed, 2 Bath Home

Potential Rental Income $1,000 month

Currently Vacant

Taxes	$808.00
Insurance	$1,500.00
Management Fee	$1,200.00
Maintenance	$1,200.00
Utilities	$0.00
HOA	$0.00
Vacancy	$600.00
Total Expense	$5,308.00
Rental Income	$12,000.00
NOI	$6,692.00
Net Yield	11.17%
Gross NOI	20.03%

All figures approximate. Great house in good area on huge corner lot. Price includes $15,000 renovation credit.

 

125 South F Street, Lake Worth, FL

$97,700

DUPLEX – 2 Apartments

Current Rental Income $1,650 month

Currently Occupied

Sales Price	$97,700.00
Taxes	$2,033.00
Insurance	$1,650.00
Management Fee	$1,980.00
Maintenance	$2,040.00
Utilities	$0.00
HOA	$0.00
Vacancy	$0.00
Total Expense	$7,703.00
Rental Income	$20,400.00
NOI	$12,697.00
Net Yield	13.00%
Gross NOI	20.88%

All figures approximate. CBS Duplex: 2/1 & 1/1. Needs less than $2K in light repairs/paint

Tenants pay own utilities; owner pays lawn.

 

510 South F Street, Lake Worth, FL

$77,000

TRIPLEX – 3 Apartments

Potential Rental Income $2,000 month

Currently Vacant

Sales Price	$129,900.00
Taxes	$2,940.00
Insurance	$1,900.00
Management Fee	$1,200.00
Maintenance	$2,400.00
Utilities	$0.00
HOA	$0.00
Vacancy	$1,200.00
Total Expense	$9,640.00
Rental Income	$24,000.00
NOI	$14,360.00
Net Yield	11.05%
Gross NOI	18.48%

All figures approximate. CBS Triplex 2/1, 1/1 & 1/1. Price includes $32,000 renovation credit

 

For more information about this property and others like this one visit www.southfloridareinvestments.com

Cash or Hard Money

561.670.3297

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