Re: Dealing with a Life Estate Tenant

Thanks for the reply. The issue isn't really with the seller. He's ready to just deed me the property subject to the existing mortgage. Here's a little more background on the deal: The current owner, we'll call him Joe, bought the house from the life estate tenant, we'll call her Mary, a few years ago. Mary was in foreclosure. Joe offered to buy the house subject to. Mary agreed on the condition that she gets a life estate and only pay $500 a month. The mortgage is a little over $300K so Joe has been writing a pretty big check every month for a few years and now just wants out of the deal. When Joe made the deal there was over $200K in equity but that was at the top of the market. There's enough equity now for me to make a decent profit but I can't think of anything to offer Mary to get her to give up her life estate. She's paying $500 on a house that would easily rent for $2500.

One strategy I've thought of is take the house subject to and not pay the mortgage. When the house goes to foreclosure I can then approach Mary and explain I need to sell the house or she and I will lose the house to foreclosure so she should take $5000 from me to walk or face an embarrassing eviction from the new owner.

I was hoping I could find some sort of a loophole with these life estates. It seems other than getting a court order these things are pretty solid.