I'm considering selling my car... Operation "Reduce Debt".
08-19-2016, 12:17 AM
#31
Burning Brakes
Thread Starter
Don't know how the housing market is right now but I think at this point it is irrelevant since you have a mortgage already. Maybe if you knew the house is going to decrease in value in the future, then you'd be better off selling it for what you get right now and coughing up that difference between your mortgage and the sales price by selling your 993.
You need to make some calculations, different scenarios and then make up your mind.
Good luck!
You need to make some calculations, different scenarios and then make up your mind.
Good luck!
I'm in the process of renovating a 2nd floor apartment over a restaurant/bar in a small building I own and after I secure a tenant, I should be able to refi that property and cash out for some but I'm planning to use the proceeds from tat cash out refi to eliminate over $40k in credit debt, $25k in construction costs and pay off 2 other cars. I am now thinking I should use some of that liquid to subsidize the sale of this house. It would save me so much headache and money.
08-19-2016, 12:32 AM
#32
Burning Brakes
Thread Starter
Rich,
I hate to say it, but keeping that home is throwing good money after bad. You paid $340K for it in 2005, and today it sounds like you would be lucky to get $300K for it. When you say that there is zero equity in the home, you are boxed in. Refinancing the property with the proceeds from selling your 993 is sort of like moving the deck chairs around on the Titanic. In the end, the property is what it is......and economic times are not going to get any better.
Lastly, given the dismal geopolitical storm that is currently hitting our country, I am fully expecting that tax "loop holes" such as mortgage interest and property tax write-offs may become collateral damage in the war of progressives that is underway.
So, you are underwater on this property. Retaining ownership will just put you further underwater, while at the same time sacrificing your 993. And, if your financial lode stone continues, my guess is that it would be difficult for you to justify another 993.
My suggestion is that you figure out a way to give the bank ownership of the property, so that you can walk away. And, retain ownership of your car. Easier said then done. That is my 2 cents.
I hate to say it, but keeping that home is throwing good money after bad. You paid $340K for it in 2005, and today it sounds like you would be lucky to get $300K for it. When you say that there is zero equity in the home, you are boxed in. Refinancing the property with the proceeds from selling your 993 is sort of like moving the deck chairs around on the Titanic. In the end, the property is what it is......and economic times are not going to get any better.
Lastly, given the dismal geopolitical storm that is currently hitting our country, I am fully expecting that tax "loop holes" such as mortgage interest and property tax write-offs may become collateral damage in the war of progressives that is underway.
So, you are underwater on this property. Retaining ownership will just put you further underwater, while at the same time sacrificing your 993. And, if your financial lode stone continues, my guess is that it would be difficult for you to justify another 993.
My suggestion is that you figure out a way to give the bank ownership of the property, so that you can walk away. And, retain ownership of your car. Easier said then done. That is my 2 cents.
I paid $340k (put down 5% and financed 2 loans 80% and 15%) in 2004. I lived in it for 2 years as property values shot up and I refi'd in 2006 (when it was "valued" at 455k) for $370 and took out $50k cash to pay down some debts then and used the other part to help start the restaurant I currently own. No regrets there except the whole part about being stuck with a house that WAS underwater but I expected to stay in it. Ive since watched the value plummet and recover somewhat and I'm about even at what I owe currently.
08-19-2016, 12:34 AM
#33
Burning Brakes
Thread Starter
Yea, thats my hope. If I didnt think I'd be forced to pay for a bunch of stuff, I'd just stop paying on it and let it go into foreclosure but I'm a stand up dude. If I can afford it, why pass the trouble on to everyone else. I'll stick it out and keep trying to sell it/dump it legitimately.
08-19-2016, 12:37 AM
#34
Burning Brakes
Thread Starter
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...
Thanks. I was looking in Longmont or Louisville, haha. I cant afford anything in Boulder proper.
08-19-2016, 12:45 AM
#35
Burning Brakes
Thread Starter
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!
08-19-2016, 06:09 AM
#37
Rennlist Member
I think there is some bad advice here... I mean you guys who say "walk away", how can you do that? You owe the money, they will want it back. Unless you destroy your financial history and go through a bankruptcy etc. how can you just "walk away".?
No, you didn't get it.
First, what is the house worth in 10 years if you keep it?
1. Less than now, how much less?
2. Same
3. More than now
I don't expect you to know that, I think no one knows that. However I think it is a safe bet that it will be the same value or at least not significantly less than what is worth now. Therefore any principal payment you make, goes towards the equity. You are now upside down but if you keep making payments that will change after time and at some point you start creating positive equity.
Keep in mind, whatever happens, you still owe the bank that money.
What you loose is everything you pay that does not reduce the principal of your loan. i.e. interest, taxes etc. Since you don't use the house yourself, that is all wasted money.
Cash in minus cash out does not equal loss or profit, it is just cash flow.
If your financial status can support the negative cash flow and if you believe the house will retain it's value, I would keep doing it.
If you think the value of the house will go down significantly in the next years or if you can't cope with the negative cash flow, then yes, dump the house as soon as possible, even sell the Porsche for that if you need to.
First, what is the house worth in 10 years if you keep it?
1. Less than now, how much less?
2. Same
3. More than now
I don't expect you to know that, I think no one knows that. However I think it is a safe bet that it will be the same value or at least not significantly less than what is worth now. Therefore any principal payment you make, goes towards the equity. You are now upside down but if you keep making payments that will change after time and at some point you start creating positive equity.
Keep in mind, whatever happens, you still owe the bank that money.
What you loose is everything you pay that does not reduce the principal of your loan. i.e. interest, taxes etc. Since you don't use the house yourself, that is all wasted money.
Cash in minus cash out does not equal loss or profit, it is just cash flow.
If your financial status can support the negative cash flow and if you believe the house will retain it's value, I would keep doing it.
If you think the value of the house will go down significantly in the next years or if you can't cope with the negative cash flow, then yes, dump the house as soon as possible, even sell the Porsche for that if you need to.
08-19-2016, 07:21 AM
#38
Moderator
Rennlist Member
Rennlist Member
As others have suggested, you need better advice than you are going to get on a car forum. As I read through the thread I kept thinking "how does that work - to just walk away and hand the keys to the bank". Did you actually get a bank to give you a non-recourse mortgage? That's not how things work if you have any equity anywhere else. You own the car, the bank will take the car. Generally, once you put renters into a property it gets harder to sell and you should expect to get less. The longer they (and others) are in the house, the worst it's likely to get (wear and tear, need to repair and replace, etc.). Talk to your CPA and attorney to help you create a viable plan.
08-19-2016, 08:59 AM
#39
Race Car
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I don't think Rich is looking for advice from a CPA on a car forum. He's looking to hear from a group of people with similar interests. The decision is ultimately his. Those of us that said to walk away are aware of the consequences of doing so. However, he ultimately risks losing the property regardless of selling the car.
Walking away is not literal. It's meant to mean:
1. Dealing with the bank to find a solution but losing his equity if any
2. Selling as a short sale
3. Declaring personal bankruptcy
Walking away is not literal. It's meant to mean:
1. Dealing with the bank to find a solution but losing his equity if any
2. Selling as a short sale
3. Declaring personal bankruptcy
08-19-2016, 09:32 AM
#40
Rennlist Member
None of those are an option IF you want to keep the car. Hence the advice "keep the car and walk away" is the stupidest advice IMHO.
08-19-2016, 09:52 AM
#41
Sell the car and sell the house, albeit at a slight loss. You owe $306k; hopefully you can net $285k+
If the house hasn't appreciated in the past 6-7 years the prospects of future appreciation is low unless a major development like Kevin Plank's (Under Armour) waterfront plans positively impacts your area.
If the house hasn't appreciated in the past 6-7 years the prospects of future appreciation is low unless a major development like Kevin Plank's (Under Armour) waterfront plans positively impacts your area.
08-19-2016, 10:11 AM
#42
Rennlist Member
Call in to Dave Ramsey and get his advice! I'm a Financial Peace fan, so unfortunately I'd have to go with u7t2p7 plan, sell both 
Your stress will go down, your time available will go up. Work your *** off at your business, cashflow will return quickly. The apartment over the restaurant is intriguing. I'd work my *** off on that and get that rolling sounds like free money. Hey good luck which ever way you go.
Your stress will go down, your time available will go up. Work your *** off at your business, cashflow will return quickly. The apartment over the restaurant is intriguing. I'd work my *** off on that and get that rolling sounds like free money. Hey good luck which ever way you go.
08-19-2016, 10:48 AM
#43
Race Director
I have to agree with the above. I think you might have bitten off a bit more than you can chew here.
That house is interesting, but in reality, the buyer pool there is small. If you are in any way handy, I think you may need to do some basics to clean it up, modernize it a bit, and have some better pictures taken.
You sound as though you're very short on liquid funds and have a tenuous cash flow scenario.
I'd sell the house for as much as you can, sell the car to fund any short falls, and work on the apartment asap to get it rented and generating income.
I'm not sure of your age and the remainder of your financial profile, but it might be time to pinch down a bit right now. Once you've sorted things out, there will be another 993 waiting for you.
That house is interesting, but in reality, the buyer pool there is small. If you are in any way handy, I think you may need to do some basics to clean it up, modernize it a bit, and have some better pictures taken.
You sound as though you're very short on liquid funds and have a tenuous cash flow scenario.
I'd sell the house for as much as you can, sell the car to fund any short falls, and work on the apartment asap to get it rented and generating income.
I'm not sure of your age and the remainder of your financial profile, but it might be time to pinch down a bit right now. Once you've sorted things out, there will be another 993 waiting for you.
08-19-2016, 11:17 AM
#44
I have to agree with the above. I think you might have bitten off a bit more than you can chew here.
That house is interesting, but in reality, the buyer pool there is small. If you are in any way handy, I think you may need to do some basics to clean it up, modernize it a bit, and have some better pictures taken.
You sound as though you're very short on liquid funds and have a tenuous cash flow scenario.
I'd sell the house for as much as you can, sell the car to fund any short falls, and work on the apartment asap to get it rented and generating income.
I'm not sure of your age and the remainder of your financial profile, but it might be time to pinch down a bit right now. Once you've sorted things out, there will be another 993 waiting for you.
That house is interesting, but in reality, the buyer pool there is small. If you are in any way handy, I think you may need to do some basics to clean it up, modernize it a bit, and have some better pictures taken.
You sound as though you're very short on liquid funds and have a tenuous cash flow scenario.
I'd sell the house for as much as you can, sell the car to fund any short falls, and work on the apartment asap to get it rented and generating income.
I'm not sure of your age and the remainder of your financial profile, but it might be time to pinch down a bit right now. Once you've sorted things out, there will be another 993 waiting for you.
+1
Don't try to leverage and move debt around to keep a car. Sell the car and use the money to repaint the entire inside of the house, new floors, update kitchen and remove all the fraternity furniture and decorations. With a little elbow grease that will be a very nice place.
Good Luck
08-19-2016, 11:32 AM
#45
Burning Brakes
Thread Starter
If your financial status can support the negative cash flow and if you believe the house will retain it's value, I would keep doing it.
If you think the value of the house will go down significantly in the next years or if you can't cope with the negative cash flow, then yes, dump the house as soon as possible, even sell the Porsche for that if you need to.
If you think the value of the house will go down significantly in the next years or if you can't cope with the negative cash flow, then yes, dump the house as soon as possible, even sell the Porsche for that if you need to.