 Financial Advise (by Rich [RI]) Dec 3, 2008 5:19 AM
 Financial Advise (by MrRational [MD]) Dec 3, 2008 5:31 AM
Financial Advise (by Red [GA]) Dec 3, 2008 5:39 AM
Financial Advise (by Rich [RI]) Dec 3, 2008 6:17 AM
Financial Advise (by Red [GA]) Dec 3, 2008 6:28 AM
Financial Advise (by Steve [TN]) Dec 3, 2008 9:34 AM
Financial Advise (by Rich [RI]) Dec 3, 2008 11:02 AM
Financial Advise (by Larry [MN]) Dec 3, 2008 12:30 PM
Financial Advise (by Rich [RI]) Dec 3, 2008 2:57 PM
Financial Advise (by Shelley [IL]) Dec 3, 2008 4:38 PM
Financial Advise (by MARTIN [KY]) Dec 3, 2008 5:04 PM
Financial Advise (by Jeff S [MI]) Dec 3, 2008 5:22 PM
Financial Advise (by Rich [RI]) Dec 3, 2008 5:59 PM
Financial Advise (by MARTIN [KY]) Dec 3, 2008 6:23 PM
Financial Advise (by Jeff S [MI]) Dec 3, 2008 7:00 PM
Financial Advise (by Rich [RI]) Posted on: Dec 3, 2008 5:19 AM
Message:
This isn't so much a landlording question although I do own a SFH rental. Anyway, I find myself in a financial quandry and need some advice as to how to get out of it. I'm hoping some of you folks may have used some service/bulletin board on the Internet that you found useful for this type of help.
Basically I need to see if I should re-mortage myself out of trouble or sell assets (pulling 401K money early) and pay my way out of trouble.
Rental is mortage free and in proce free-fall so I don't think I should sell it now even if I could.
Thanks for and advice. --24.91.xxx.xxx |
Financial Advise (by MrRational [MD]) Posted on: Dec 3, 2008 5:31 AM
Message:
I suspect any solution is going to depend on your earned income and credit. If you can get a mortgage or equity loan on that paid for rental... that seems the best option (from what info you've provided). Will the rents pay the freight?
Whatever you could get from the 401K is likely to be from reduced asset value even before the penalties. Ouch! --71.166.xxx.xx |
Financial Advise (by Red [GA]) Posted on: Dec 3, 2008 5:39 AM
Message:
Can you take a loan out on your 401K? That is much better than cashing it in.
MR R has a great point if you can mortgage the property you should. Not sure what your particular situation is, but some believe that paying off a property is nirvana even if it means neglecting establishing substantial reserves, thus becoming house rich cash poor. That is a situation almost as bad as being overleveraged. --65.12.xxx.xxx |
Financial Advise (by Rich [RI]) Posted on: Dec 3, 2008 6:17 AM
Message:
Actually I was thinking of a 50K loan on the 401K, cash in about 30K of us saving bonds, and selling off some GE stock. I'm 58 yo so I don't want to pull 401K until 59 1/2 where I can avoid the penalty. I kind of don't want to pull a mtg on the rental as it is almost ready to be sold, running down the depreciation clock. I still have a good job but my wife is in between positions right now. I just kind of need a knowledgeable advisor to run numbers for me to see what might be best for me and my family. My credit is still at 750+ but that's going to change if I don't fix things up pretty quickly. --24.91.xxx.xxx |
Financial Advise (by Red [GA]) Posted on: Dec 3, 2008 6:28 AM
Message:
I don't know how much GE stock you have, but you can sell some calls against what you hold and raise some bucks. The Jan 2010 15 strike price calls are going for about $5.35. So if you have 5,000 shares you could raise over $26,000 and still keep the stock for quite a while unless it shoots upward. Downside of course is that someone has the right to buy it from you for 15 between now and Jan 2010. It wouldn't make sense to exercise that right before expiration unless GE is well over 25.
This is not a complicated strategy just google covered call strategy if you are unfamiliar with it.
I'd also check into if there are any effects on your 401K withdrawal when you have a loan against it. If you take out a loan that is.
I still favor taking out a loan though. --65.12.xxx.xxx |
Financial Advise (by Steve [TN]) Posted on: Dec 3, 2008 9:34 AM
Message:
You can get an extra part-time job and your wife has time to go get 2 or 3 part-time jobs.
Don't tell me that there aren't any jobs out there. That's code for there aren't any easy/fun/high-paying jobs out there. I see help-wanted signs in about every third store window in my city. And yes, I mean I saw them today. --216.79.xx.xx |
Financial Advise (by Rich [RI]) Posted on: Dec 3, 2008 11:02 AM
Message:
I am already working Full-time and 7/24 on call. I'm unable to work a second job. My wife collects unemployment and gets better paid with that than the job she had. I'm not broke like that, 2 to 300 extra a week won't matter to me. The covered call strategy is the type of thing I will end up doing. My own personal bail-out. --68.229.xx.xxx |
Financial Advise (by Larry [MN]) Posted on: Dec 3, 2008 12:30 PM
Message:
How does your wife make more on unemployment than on the job she had. I thought it was a percentage of what you were making up to a maximum?
Don't take a loan on the 401K. If you leave your job or get laid off it's due immediately. A lot of people don't know that. --75.73.xxx.xxx |
Financial Advise (by Rich [RI]) Posted on: Dec 3, 2008 2:57 PM
Message:
No deductions for medical etc. I just put her back on my insurance. I know the risk of a 401K thing but the company I am working for gives a sweet severance on lay-off and that would cover it. It's fairly unlikely I'd catch the axe now as we've done our trimming already. Company itself is actually doing OK now but we are not an American company and didn't find ouselves too exposed to the financial crisis. Lay-offs mainly centered around a business unit sale. --68.229.xx.xxx |
Financial Advise (by Shelley [IL]) Posted on: Dec 3, 2008 4:38 PM
Message:
You can access IRAs without penalty by doing a 72t (aka SEPP). If you don't have an IRA I believe you can transfer some of your 401K into an IRA. There are many rules and conditions when going this route so be careful. --206.125.xxx.xxx |
Financial Advise (by MARTIN [KY]) Posted on: Dec 3, 2008 5:04 PM
Message:
How much is the total debt? 100k, 150k??
How much could you sell the SFR for in this market? I mean if you really priced it to sell quickly.
Is it credit card debt? What about your personal residence, is there any equity in it?
Also someone said something about a SEP, that is only for self-employed individuals. GE stock has been hammered lately. --74.215.xx.xxx |
Financial Advise (by Jeff S [MI]) Posted on: Dec 3, 2008 5:22 PM
Message:
Rich:
From what I see above - the mortgage might be a good option if a bank will loan the $$. It doesn't affect depreciation deductions and if a sale takes place, the proceeds will pay off the loan. I would guess all Stocks are down in value, so that may not be the best option, assuming you have mutual funds or something other than US treasuries in your 401 K - same logic for that .... --24.192.xxx.xxx |
Financial Advise (by Rich [RI]) Posted on: Dec 3, 2008 5:59 PM
Message:
Total debt load is 200K including all mtgs on main residence, c cards and rest of a car loan. I can get a new 30yr on my existing home and still be doing a lot better cashflow wise. After doing some arithmetic I may turn in 30K of us bonds, sell my collector car and pay off my main house second mtg. This would give me 600/mo reduction in fixed costs. 300/mo to ELOC and that's be gone quickly. Calls on the GE stock are also being considered since I've had them for a long time and am still ahead. The SFH would bring say $150K quick. Tenants have even offered to buy so no Real Estate commissions. I'd go to $140K for them. That's not as positive as it sounds though, I sort of think they'd have bank issues. All the credit card debt is at 3.9 to 5.9% until paid off (so they told me) so interest wise I'm OK. Big debts are 1st at 90K, 2nd at 70K and eloc at 22K. eloc is 3.9% now due to low int rates. I could pput all the CC debt on the ELOC but if I get in trouble then I loose my house. --68.229.xx.xxx |
Financial Advise (by MARTIN [KY]) Posted on: Dec 3, 2008 6:23 PM
Message:
Looks like you have answered your own question.
If you can sell bothe the bonds and the car and pay off the second mtg, then you are nearly there. You could take that extra cash-flow in your budget and pay toward the eloc and the credit cards and car loan and be out of debt much quicker, especially if you have something else you can sell or some other extra money somewhere.
--74.215.xx.xxx |
Financial Advise (by Jeff S [MI]) Posted on: Dec 3, 2008 7:00 PM
Message:
Seems like there's different options. If the rental was sold, 200 K becomes 60 K, and still have collector car and stock, but no monthly income from rental. Can realign debt depending on interest rates, or the option that Martin suggested .... One thing about rentals - you can always get another one when the time is right ..... --24.192.xxx.xxx |
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