I'm considering selling my car... Operation "Reduce Debt".
#16
Instructor
I'd find a way to dump the house, neutral colors and proper staging will go a long way to moving it. The more 'vision' you need to like a place, the smaller the buyer pool will be.
Additionally, I hope you have property in Boulder already! ~300k would get you the 500 sq ft apt I just sold...
Additionally, I hope you have property in Boulder already! ~300k would get you the 500 sq ft apt I just sold...
#17
Rennlist Member
It sounds like that $1000 per month cashflow is hurting. I'm sorry you are in this position.
I agree with a lot of the sentiment ---- spending $1000 / month to keep the house is throwing good money after bad --- to what end? Especially with no equity in the house.
I'm sure you currently get the tax benefits of the depreciation of the house. However, given that depreciation is against the structure and not the land, and the whole she-bang is 300K -- I'm not sure the depreciation benefits are worth it.
Your options are -
- Sell Car. Keep House. Only Do this if you think (a) price of the real estate will rise significantly faster than interest rate or (b) revenue potential from house is not maximized.
- If (b) --- then can you get 1K more per month if you do short term AirBnB type rentals? This will involve significantly more effort on your part as well as higher rate of wear and tear. Please account for a certain vacancy rate per month. This also assumes the area is in a desirable location to vacation in. You do mention though that it is in a desirable location. Perhaps you have another calling in life as an innkeeper. I know many landlords locally that have switched some of their properties from long term tenants to AirBnB short term rentals in search of higher return --- but it does require more effort and risk.
- Sell House. Keep Car. All said and done, this is perhaps what, -30K USD or -50K out of pocket for you? That's an expensive learning moment. Some people value peace of mind over all else. For myself, I value peace of mind.
I agree with a lot of the sentiment ---- spending $1000 / month to keep the house is throwing good money after bad --- to what end? Especially with no equity in the house.
I'm sure you currently get the tax benefits of the depreciation of the house. However, given that depreciation is against the structure and not the land, and the whole she-bang is 300K -- I'm not sure the depreciation benefits are worth it.
Your options are -
- Sell Car. Keep House. Only Do this if you think (a) price of the real estate will rise significantly faster than interest rate or (b) revenue potential from house is not maximized.
- If (b) --- then can you get 1K more per month if you do short term AirBnB type rentals? This will involve significantly more effort on your part as well as higher rate of wear and tear. Please account for a certain vacancy rate per month. This also assumes the area is in a desirable location to vacation in. You do mention though that it is in a desirable location. Perhaps you have another calling in life as an innkeeper. I know many landlords locally that have switched some of their properties from long term tenants to AirBnB short term rentals in search of higher return --- but it does require more effort and risk.
- Sell House. Keep Car. All said and done, this is perhaps what, -30K USD or -50K out of pocket for you? That's an expensive learning moment. Some people value peace of mind over all else. For myself, I value peace of mind.
#18
Rennlist Member
Sorry to hear of your dilemma and financial situation. I just know I drooled over your car during one of the Hersey meets, so it would be among the last assets I'd be selling! Likely not really helping here, but best of luck either way you decide to go.
PS: if you end up selling, I would make sure you have first rights on the car if the new owner decides to ever re-sell. Hopefully by then your situation will be better and you can get your car back, it will take a good amount of effort and expense to recreate a new 993 to the level you have dialed in this one! She's a marvel.
PS: if you end up selling, I would make sure you have first rights on the car if the new owner decides to ever re-sell. Hopefully by then your situation will be better and you can get your car back, it will take a good amount of effort and expense to recreate a new 993 to the level you have dialed in this one! She's a marvel.
#19
#20
Rennlist Member
Rich,
I am sorry to hear you considering selling your 993. She is a real beauty!
I am (soon to be was) in a similar situation. In Dec 2007, we bought a house. Two years later the house had dropped 1/3 in value. We had to move out of the area (for work). Being totally upside down we rented hoping the market would come back. Eight years later, and the markets in that county have all come back minus one town. You guessed it, the town we owned in. Here is my $0.02.
The 993 is not the problem. Goofball is right, it is appreciating, and I am guessing your house is largely stagnant. Selling the 993 will not fix the problem of the house's value--it will only increase your equity.
Here are few things I would consider.
1. Have the house re-appraised to lower the taxes. This will benefit you pretty quickly, and help any sale.
2. Sell the house. Here is what you will not like.
First, kick out any renters.
Second, find the top sellers agent in that area. Don't worry about friends in the business. Hire that guy or gal that moves over 150 houses a year. You need the super agent--not a friend.
Third, Do what it takes to make the house sell-able. If the style of the inside is typical for that area keep it. If not paint it to be what sellers would expect. When buyers walk into the place they should see where they want to live, not what they need to fix.
I see it as ripping the band aid off quickly. What I realized in my situation is that the only way to not have a money losing asset was to accept any loss and move to the next investment. What drove my decision were several factors. First, my wife and I realized we were never moving back to the town in the house is in. Second, I realized the roof was almost 15 years old, and it would be expensive to replace.
So the short answer here, is keep your car (you love) and sell the house (you don't love). You just have to accept that you are going to lose the money, but unfortunately, to stop losing the money you will have to lose some more.
I know it sucks, sorry Dude!
I am sorry to hear you considering selling your 993. She is a real beauty!
I am (soon to be was) in a similar situation. In Dec 2007, we bought a house. Two years later the house had dropped 1/3 in value. We had to move out of the area (for work). Being totally upside down we rented hoping the market would come back. Eight years later, and the markets in that county have all come back minus one town. You guessed it, the town we owned in. Here is my $0.02.
The 993 is not the problem. Goofball is right, it is appreciating, and I am guessing your house is largely stagnant. Selling the 993 will not fix the problem of the house's value--it will only increase your equity.
Here are few things I would consider.
1. Have the house re-appraised to lower the taxes. This will benefit you pretty quickly, and help any sale.
2. Sell the house. Here is what you will not like.
First, kick out any renters.
Second, find the top sellers agent in that area. Don't worry about friends in the business. Hire that guy or gal that moves over 150 houses a year. You need the super agent--not a friend.
Third, Do what it takes to make the house sell-able. If the style of the inside is typical for that area keep it. If not paint it to be what sellers would expect. When buyers walk into the place they should see where they want to live, not what they need to fix.
I see it as ripping the band aid off quickly. What I realized in my situation is that the only way to not have a money losing asset was to accept any loss and move to the next investment. What drove my decision were several factors. First, my wife and I realized we were never moving back to the town in the house is in. Second, I realized the roof was almost 15 years old, and it would be expensive to replace.
So the short answer here, is keep your car (you love) and sell the house (you don't love). You just have to accept that you are going to lose the money, but unfortunately, to stop losing the money you will have to lose some more.
I know it sucks, sorry Dude!
#22
Rennlist Member
Since you have not given a snap shot of your entire financial picture I can't give sound advise on the rental. That $1k month negative cash flow could be less than $500 out of pocket depending on write offs and tax bracket. Whatever the case you need to re-assess that "investment".
The 993 is a toy plane and simple. Unless you're sitting on a fair amount of $$$ you got to re-evaluate the opportunity cost of the money tied up in it. If you have the means to double that value every 6/12/18/24 months then that's what must be considered. If you cash in and then squander the proceeds that's not good either. Dumping it into that house does not look good either. That should be around 4% money.
Best of luck with the decision. I was faced with similar a dilemma earlier this year. As the sale stalled my investments continued to pay off. I can stomach the lost opportunity of the car value now.
Best of luck with the decision, I for one feel there are many more car love affairs to be had. If mine went away there would always be another something down the road. I've had some GREAT cars over the years. Many I miss dearly. Without purging I would not have been able to own then all.
The 993 is a toy plane and simple. Unless you're sitting on a fair amount of $$$ you got to re-evaluate the opportunity cost of the money tied up in it. If you have the means to double that value every 6/12/18/24 months then that's what must be considered. If you cash in and then squander the proceeds that's not good either. Dumping it into that house does not look good either. That should be around 4% money.
Best of luck with the decision. I was faced with similar a dilemma earlier this year. As the sale stalled my investments continued to pay off. I can stomach the lost opportunity of the car value now.
Best of luck with the decision, I for one feel there are many more car love affairs to be had. If mine went away there would always be another something down the road. I've had some GREAT cars over the years. Many I miss dearly. Without purging I would not have been able to own then all.
#23
Rennlist Member
Originally Posted by AZ Targa
Its a nice little house, too bad that you're not living there, I would have said to do a minimal renovation to freshen things up for a sale. The only downside I can see from the home (in relation to the area) is that its a little older inside, you could try to declutter and change the colors for a more modern look. Watch some HGTV and you'll think you can do anything. haha
I wouldn't sell the car though, I always have sellers remorse when selling a car!
I wouldn't sell the car though, I always have sellers remorse when selling a car!
#24
Given that you have no equity in the house and you are cash negative on a monthly basis, you should consider walking from the house with as minimum impact as possible. As for the car I hope your banker does not have a lien on it because you will definitely be underwater with what you will net for the real estate.
Last edited by Pr William; 08-26-2016 at 01:50 AM.
#25
Race Car
Join Date: Nov 2007
Location: Miamah, La Florida
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Selling the car will only allow you to continue to lose money on the house. The Porsche isn't the problem, the house is. Selling the car will only prolong the bleeding. If you have the cash to pay down the note then do that and ditch the PMI. Again this may only slow the bleeding. I'm sure the PMI isn't $1G a month anyway.
Other option is to throw up your hands and walk away from the house. Take the cash you pulled out in the refi as your "profit"...
Other option is to throw up your hands and walk away from the house. Take the cash you pulled out in the refi as your "profit"...
#26
Drifting
Real estate that doesn't cash flow is a liability... end of story. Dump it. Even if it means a short sale. Keep the 993. It's appreciating. Pm me if you like. Been in real estate 20 years.
#27
Burning Brakes
#28
Race Car
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Originally Posted by Todynot
Now there's a man of integrity...
#29
Pro
Rich,
This is my impression of your issue: you are upside down and don't have enough cash to get out from under the rental property without selling the 993. So your choices are:
1. Walk from the property. Major black mark on your credit.
2. Sell the 993, pay down some of the principal, and then sell the property to get out from under it.
3. Continue to sink money into the rental ($1k/mo.)
IMO if I were faced with these three choices I would quickly move on #2. You get clear of a money loser, can sleep at night (assuming this issue is bothering you, which from the sound of your post it is) and at some point in the near future buy another car. Others can flame me for this: its just a car, and it really is not that rare. I would rather sleep soundly at night.
Matt
This is my impression of your issue: you are upside down and don't have enough cash to get out from under the rental property without selling the 993. So your choices are:
1. Walk from the property. Major black mark on your credit.
2. Sell the 993, pay down some of the principal, and then sell the property to get out from under it.
3. Continue to sink money into the rental ($1k/mo.)
IMO if I were faced with these three choices I would quickly move on #2. You get clear of a money loser, can sleep at night (assuming this issue is bothering you, which from the sound of your post it is) and at some point in the near future buy another car. Others can flame me for this: its just a car, and it really is not that rare. I would rather sleep soundly at night.
Matt
#30
Burning Brakes
Thread Starter
Tried that a couple year ago. Unfortunately, I have an impeccable payment history and my income supports it so the Deed In Lieu wasnt an option. I have a 1st and a 2nd loan (purchased the home with an 80/15/5) and neither will budge.