Should I purchase a home and rent it to Mom? What am I getting into?

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Good Morning. Up until Hurricane Irma, my Mom lived in Orlando in a mobile home with little equity and little savings. Hurricane Irma flooded the home and the insurance has 'totaled' the home. Bottom line, she now has @ $20K to start all over again. This doesn't appear to be enough to buy a new property/mobile home as the new lenders want 25% down, and yearly income limits that she does not meet as she only has her Social Security that is not enough to qualify for a loan. So...we are in a pickle. She can't buy alone, so my options are to cosign and contribute funds to make up the difference needed to put down, or (my preference) is to buy the home myself in my name so I don't have to worry about any life events later that would lead to regrets (I am thinking of medicaid looks backs, approvals etc). I would like to buy an apartment in my name and rent it to her. It would be fair...I want to be above reproach and not cause her any medicaid hassles in the future (I worry as my family has been in nursing homes and I worry she may need the same assistance in a few years). Can anyone give me any suggestions or thoughts? I don't want to my silly mistakes that will cause issues later. I want to think it through now before I move forward! Also, on the five year look back period, how does Medicaid look at her spending? Since she lost everything in the Hurricane, she is spending a lot now from the insurance proceeds to replace furniture, clothes, you name it. Is there a limit on her spend? Will they question why she is spending so much in a six month period of time if the period fell in the five year look back period? Will they question the amount I charge her for rent if it is fair market value since I am her daughter? Thank you for any feedback or wisdom anyone can share!

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Garden - BFE ( base flood elevation) for MS & LA is coming in at 22’ for most coastal areas PLUS 2’ freeboard. So if your at or nearby the beach you could well be at zero or sea level. So you have to build up with your first floor at 24’ up. 1st floor at 24’ is really more at 3rd story. I’m waiting for the slow moving storm with cat 5 winds like Katrina that literally lifts the stilts houses up & off and tosses them a mile inland. Wizard of Oz’ish!

Worse are those who have property more inland but still coastal without a Corp of Engineers levee system in place and below the BFE to start with. Like more than 6’ below sea level. They start first floor at 30’ up.
Whichever it is, the costs related to foundation, stairs, lifts, elevators, etc just runs so much more than traditional building for elevated building and maintenance afterwards. It’s a real challenge. Most in H. harvey did not have flood insurance. I don’t see how those ever rebuild unless TX decides to do a 250k-300k grant program for home owners. (MS did a 150k MDA grant and it was still beyond that to rebuild which many folks couldn’t afford; LA did Road Home % grants which had lots of SSSandy type of contractor fraud issues). In many ways homeowners need to have their damage assessments come in way under 50% so house does not have to be torn down and rebuilt or if totaled rebuild an absolute no frills house as there’s not ever enough $$$.
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Also for Katrina, those without insurance who were displaced got 10k from FEMA. Many were on some sort of “at need” program in LA or MS. In theory it was to be a single application by household but once that was figured out folks applied as individuals. The 10k was not counted as an asset for being eligible for a new program or re-eligible for existing program or for getting stuff from an outreach program. The 10large was viewed as for displacement costs. I’d bet FL is going to have some sort of threshold amount for insurance, FEMA, charity giving that just won’t be considered as an asset. So only above that figure do you need to document where spent.
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Igloo, thanks for putting in perspective a post-hurricane recovery. I think your point about getting decent housing before it's snatched up is really good advice.

I think I wrote elsewhere that I watched a documentary on the so-called post Sandy cleanup, the botched projects, and what appeared to be an almost comical elevation of vulnerable homes on stilts (not sophisticated as has been done in other SE coastal areas, but just plain botched up).

People are also still living in houses that were damaged and haven't yet been repaired.

I think these catastrophic hurricanes are going to have a lot more long term effects than people realize.

Something else to remember is that the OP's mother is "verifiable at risk elderly homeless".
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CJ - I’m going to approach this from an entirely different angle & as one who went through Katrina & dealt with post storm recovery & rebuilding. Right now due to H. Irma your mom is “homeless” and is verifiable at risk elderly homeless. State of FL is going to have some type of fast tracking for those affected by H. irma to get priority into NH, AL, senior apts. If realistically moms at the point where living in a group situation fits for her, I’d do whatever to get her into the post Irma system to go into a IL-NH as a FL Irma evacuee resident. And be done with this. No renting from you or renting on her own. She may need to be placed outside of Orlando or Miami area. 

The 20k will come up as she will have to disclose insurance payments / settlements but she just needs to say it was used for contents replacement. 20k is pretty small amount so could easily take all for contents.(NFIP policy pay 100k contents.)

There’s a huge displacement from Irma plus there will be a continuing influx from Puerto Rico & USVI into FL till those islands can get back to some degree of normalcy. Plus those living on the other non US islands moving to So FL to have a base till they get their boat delivered or get housing situated on their carribean island. There going to be serious competition for housing (even crappy places) so toss aside whatever you thought you could buy a place for if your even close to Miami or Orlando. So imo you need to move fast to get your “homeless” mom into whatever program FL is doing & ahead of open market renting.

Buying a property to rent to me only works if you truly have the deep pockets to pay the whatever’s in an area with disaster recovery going on. Also realize there will be increased insurance costs. Insurance (flood, wind pool, homeowners) will increase but probably will have a capped annual % increase for FL homeowners on preexisting policies. But for new and rental or investment property - which buying a place for your mom would be - those caps aren’t there and the prices will be crazy high.

Mom needs to remember she’s homeless and displaced. She can stay with you or others temporarily but should she do anything to be considered part of your household, that homeless status goes away.
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I agree with those who said get a good elder law attorney, one whose specialty is long term planning. They may cost a lot, but I'd consider it an investment that will save you grief in the long run. My knowledge is limited, but I think having someone legal involved to oversee the process/wording and offer tips will keep it all clean and above reproach should Medicaid get in the picture in the future. Anyone who survived the hurricane circumstance will surely recognize why there were expenditures etc. As others said, keep the receipts, just as a precaution. Take care.
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Moving into a senior apartment, even those who take AMHA and section 8 can backfire on you. I sold my house and moved into a senior apartment. I didn't qualify for financial help but could swing the rent. Then they sold the building. The rent increase is now up to 8 percent, heading for 9 percent. And they are no longer taking new AMHA and section 8. Over 100 seniors had to move as they could no longer afford to live there. Myself included. What gets me is they have over 100 empty apartments, getting no income from them, when if they hadn't raised the rent so much they would have had some income coming in. The biggest problem with us was coming up with a security deposit and first months rent to be able to move. The majority had to either have help from their kids or move in with them. (I ended up with a taxed based apartment). I think her wanting to buy an apartment and rent it to her mom is a good one. Then she can control the rent and stop the increases in rent.
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CJ, Your Mom can spend her $20,000 on Carribean cruises or liquor as far as the Medicaid look-back is concerned, as long as it's cruises and liquor for HERSELF ONLY. Medicaid penalties only arise when people gift away the money they could have used for their own needs. Don't let her give away large amounts of cash or large gifts, and don't use any of her money to buy a house that is going to have your name as owner.
She can spend her money on herself any way she wants without incurring Medicaid penalties. And Medicaid is not going to deny or penalize her if she gives perhaps 10% of her social security to charity, $20 to a grand-kid for Christmas and birthday, etc. If she gives $15,000 of that insurance settlement to you (or anyone else, including charity) then it could be a problem. That being said, the keeping of records and receipts is a good plan.
This would be an excellent time to meet with an Elder Law attorney, since your mom could spend some of that money on legal fees to get POA, will, etc., and perhaps explore housing options you haven't considered and/or help you make a lease or written plan for her to live in a place that you own. As long as she pays you rent that's comparable or less than the local rate for similar housing, you'll have no issues with Medicaid; but written records that prove that will be a good thing to have.
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I can't see why u want to by a condo when Mom could rent a nice apt. You would have to sell the condo eventually. Medicaid look back is five years. If you r worried about the $20k then have Mom save all her receipts for items she had to replace. As long as her money is spent for her needs they won't say anything. I would keep back up for any large withdraws. She cannot give large amounts away or as gifts.
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I believe having her pay rent to a senior complex is the best bet.
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My sister did that - essentially she and her husband had a modest home built on the property (back yard area) of her home and they rented to Mom & Dad until Dad had to move to a nursing home due to his issues (he eventually moved in with me). I think it worked out until Mom also left that home (due to health concerns), and is in fact living with me now (Dad passed in 2012). For my sister, they were simply able to sell the home when they decided to move, too. As far as your other financial Q's, I have no idea, but it seems that real estate is almost-always (location, location, location) a good investment, so you might think of it that way, for beyond her stay there.
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