Steve 96C4S

The sad thing is that with my current income we couldn't even qualify to rent a $2500 - $2800 house. It doesn't matter how much you have in mutual funds, if you're tracking $45k-50K per year, no one is going to rent us that house. At least I don't think so.

In any case, this idea is not very appealing to me, at all, but one I'll think about. To move all our stuff out (a monumental task - if you saw what's here you'd understand), sell our house, just to rent a house for a year? I don't like it.

Why oh why did I start this thread in the first place? Now I'm stuck with harsh reality, slapping me hard in my face. I didn't know you guys would put my house on the chopping block here. I thought it would be more like, "Sell the 993. Get over it." Or, "Sell the BMW and drive the 993 - you'll love it for year or two. Steve, you'll get a better job soon and all your problems will go away, you'll see. Have faith".

That's the way I saw this going... Guess I was wrong.

mooty

to me 6000sf for two ppl is way big. we have four ppl in 3000sf house granted this is CA.
selling your house would bring you most cash flexibility, but b prepared to lose in this market. you only owe 116k, that's a conventional loan and today with your LTV, you can EASILY get a sub 5% 30 yr fix with your eyes blind folded. that's about $622/month. no way you can rent anything with that money (not that i know prices in MD, but i figured that much). there is no reason to pay off the mortgage now. the interest can offset a bit of your income, however reduced that may be. your logic of fearing going from a short term mortgage you have now to a 30 yr loan if highly flawed. just refi, but it's not really a 30 yr loan. today's mort are usually free from prepay penalty. so if you suddenly got a big paying gig, you can pay 3x or 6x or whatever of the $622/month that will reduce your 30yr mort to 15 to 10 to 1 yr depending on how much you wan tto pay a month.

unless you have no CF, i dont see how selling your 993 really going to help your. 30k yes, but how long will it last?

oh even with your highly reduced income, many banks will still lend to you as your LTV is less than 15%. they probably hope you will default as they will make money off you right off the bat!. i have been an underwriter in my past life, unless the underwriter is green or just a plain idiiot, you should be approved easily.

nile13

BTW, I've driven th 993 on daily basis here in Boston for several years. Of course I've worked from home so it was not that many miles annually, nor did i have to go anywhere if the weather was truly atrocious.

95 C4 993

Is this a single or dual income house? If the wife can ski, she should be able to work. I recall at some point she wasnt working but I could be wrong.

steve porter

i would Not sell the house as you would loose a (current whole years salary) on fees . unless there is a Bargain house availabe to step into. You have to live somewhere. use your reserves thats what they are for unless there is absolutely no hope of getting another job . tough it out it will make you hungrier

Steve 96C4S

She has medical issues. She can't work. She was a dental hygienist for 22 years but had to leave that professional when she started suffering from health issues. She does work for her parents helping them out, so that brings in some "income."
Her working isn't an option, really.

I'll call my loan officer this week, then. Thanks Mooty. We basically live on the top 2 floors of the house which are 3800 sq ft. It seemed big at first but honestly, it's a lot of wasted space - double stairway kills a lot of the space, so it doesn't look or feel THAT big to us.

We're not giving this up until we have to... we pretty much live in the kitchen and the bedroom.






Our cats love it here, too


Kitty #2 is saying, "Don't move!"


Before we put pictures up and decorated the bedroom... Our Egyptian Mau "Tut" in the window, definitely doesn't want to relocate.

SCMomentum

This is quite simple...
Reduce the stress in your life.
Sell the Porsche 993 C4S (21k miles right?) Easy sale.
Refinance the home and get rid of the monthly mortgage that is sinking you.
When all is said and done sell the BMW too...trust me, it is going to milk you dry over the long haul...ask me how I know:-)
Replace it with something more practical and significantly less expensive to work on.

vincer77

Steve,

It takes a lot to be as honest as you have been. I am also so very impressed with the responses to your questions. This is a neat community and the advice has been fantastic. I mean 5 (wow, 6 in the time it took to write this) pages in one day! It took us a week or so to get that many talking about a dang light bulb!

First, you really need to understand that you are in a pretty good financial situation. You have a beautiful home with a 20% loan to value mortgage, three paid off cars, a well funded 401k and $80k in the bank. It sounds like you have made a lot of good decisions, maybe a couple bad ones, and are going through a tough time now. I know guys who have 130% ltv on their homes, $50k in credit card debt and car leases or loans.

So, as one of the earlier posters said, keep your head on straight and assess your situation and make some common sense decisions. Praise God that you may only need to make a few adjustments to your lifestyle. I would first look at your monthly budget. How does it compare to some typical budgets? There are some online resources. This is one I'm familiar with http://www.biblical-personal-budgeti...worksheet.html but I am sure there are a lot of others out there. Where are you out of balance? Address these.

I am in the camp that believes moving out of your house is a last resort. It is your community, your wife has set up her nest and it is close to family. Closing costs pale in comparison to the other non-tangible costs involved. Also, you don’t want to be dumping your house like you did your mutual funds – at the bottom of the market. On the other hand, if you live in a neighborhood that almost forces you to keep up appearances, then you need to assess whether or not that is good for your family.

Cars are another matter. IMHO, let your wife keep her car. It is safe, dependable and brings her peace of mind. The first car I’d dump would be the 740. It is a ticking time bomb as far as maintenance costs. I friend of mine who is in a far worst situation to you just had the timing chain slip on his 740. $3000 of a cost he cannot afford right now. Replace it with a USED Camry or Accord, or even a Civic – actually, with the Toyota recalls, you may find a good deal on a car someone is irrationally afraid to drive. You should find a decent car for $10-$15k. Pay cash for it. I was in a very similar situation to yours about 5 years ago. I got rid of my Lexus and bought a 2 year old Civic coupe. Paid $10k for it and could still get $7-8k today, and it works like an appliance. Other than brakes and tires etc…, I had to replace a motor mount (it had been in an accident). That’s it. And boy was I enjoying it when gas prices went nuts. I still have it.

Dump the watch and figure out the other “lifestyle” expenses that you can go without. gym memberships, golf memberships other club dues etc... My sense is that you and your wife are holding on to some superficial things at a time when you should be simplifying your life. Skiing is a luxury that you can do without, as is an expensive wrist watch. The idea of keeping a car to go skiing is pretty out-of-balance (again IMHO).

As far as the 993, it probably will not depreciate much more, and maybe (very maybe) even go up in value. It may very well need to be sold, but other things need to go first. If the 993 symbolizes something more than it really is, that is a much larger problem than your financial woes.

Refinancing is a great idea – assuming you can qualify. Another idea I thought of was renting your house out and getting an apartment until things firm up for you. Disruptive yes, but at least it is not a permanent change.

But the single most important thing here is that you and your wife be on the same page. Both of you need to realize the problem you are in and both need to be willing to sacrifice. I am old fashioned, and believe that you need to “man-up” and make the toughest sacrifices (if the 993 has to go), but, she needs to contribute also. If it is working a few more hours a week, or foregoing a few ski days so be it. But I think she will gladly make these sacrifices as she sees you sacrificing.

Sorry for all the rambling. I pray that you will take all this information from your fellow RLers (much wisdom) and use it to make some good decisions. God bless you and your family.

Steve 96C4S

Thanks for all the kind thoughts and simple but tough suggestions. I would say that without a doubt, moving out of this house would be our last resort. Selling my BMW at this point is something for me to consider. I just looked to see what these cars are selling for and what they look like and found this:

$12900 - 30k miles. 2008 Honda 4 cyl, no leather, base model. The exact opposite of my 740i, but boy would my wife be happy if I did this! I'd get bonus points for sure. They were more than $21k, new. Rear brake pads requiring replacing every 18K miles or so due to a crappy defect that Honda doesn't cover but life could be a lot worse when my BMW breaks down.

goofballdeluxe

Brother, I gotta say, after looking at the interior and exterior photos of your home, it's hard for me to hear you talk about financial troubles. Clearly, you've hit a rough patch, but you're far, far from insolvency or anything even approaching a true emergency. In fact, you're in a much better position than others with similar real estate issues. You may not be used to having hard times, or making sacrifices, and I think that the shock you feel about that is making it all seem much more terrible than it really is.

I'm not trying to criticize you, or negate the stress you most certainly must feel, but it's also fair to say that, right now, your home is nicer than 95% or more out there. No matter what, you have plenty of easy downsizing you could do, and some of it you might hardly feel at all. For example, how often is that nice piano being played? You understand what I'm saying...

Change is hard, but you're in a position to have no debt at all and have a nice nest egg, if that's what you wanted. For sure, you could make easy changes that would go a long way to saving you lots of money. Rememeber, you may not be in control of how much money you are taking in, but you DO have some control of how much you spend. I bet you have tons of crap you could sell, un-needed luxuries you could dispose of such as watches and yes, even 993s if you wanted to be religious about it.

Here's a tip: Make a list of priorities of what's REALLY important here. Cut the rest out of the equation.

P.S. Where the cats want to live should not even make the Top #50 on that list.

Good luck, and go kick some ***.

Canyon56

What GBD says.

As they say here in LA, you're living large. But seriously, it's all relative and sometimes you need to put it in proper perspective. The other day I was looking at some of John D's "Haiti Buy a Bandage" pics. That will snap anybody into the right perspective. Giving up a 993 seems pretty simple.

And what GBD says about control is a good reminder. You can't do anything about things you have no control over. But you can control those things you do have control over. So focus on what you have control over and forget the "what ifs" and "what could be" sort of scenarios. Those thoughts are a waste of time right now. Take control now and do what you know is right.

The world will keep on spinning and you'll still be on it for the ride. Just like the rest of us.

DocTock993

OK - I've been following this thread for a while and am going to add my 2cents. Honestly, what I have to say isn’t different that what a lot of other’s have said, but I have been in a similar situation to you and empathize with some of your difficulties.
First, and foremost do not touch your 401K unless you get desperate - no seriously, really desperate, like medical emergency type stuff. You are employable, as is your wife in some capacity. Tapping your 401 is the kind of thing that is ONLY for an emergency. It is WAY too expensive to do so otherwise, and with a college age kid, I’m guessing you are in your 40’s, and therefore at a point where loosing those funds would really hurt for the future.
Next, dump the BMW in favor of a much less expensive DD. That 7 series caries a much higher insurance premium, maintenance expense, and fuel expense than a “loaded” 3 year old CPO Lexus – I use that car as an example as a friend just bought one for $20K, and you are used to driving a “nice” car, not a Civic. Hey, let’s look at reality, you may need to drive a Civic for the time being, but it’s going to make you more miserable than you already are – hence the suggestion of a preowned-Lexus.
Then, take a strict look at monthly expenses. Create an Excel spreadsheet that documents every dime you spend and where it goes. Once all that is established, cut the "fat" where you can, and make the hard choices that need to be made. Do you really need HBO etc? What about all the extras on your phone plan? How about a programmable thermostat? Eating out? Do you need to be totally responsible for everyone’s unlimited cell-phone plans? It’s amazing how $10-20+ here or there can add up.
Now that you’ve established a potentially lower monthly expenditure, look at your probable biggest expense, the house. You laid out a ton of money up front for the purchase, money that you will, in this current economy, probably not recoup. In the face of probable inflation, and in the current horrible real-estate market, it would, in my mind, be stupid to temporarily reduce monthly house expenses, in the face of major loss of principal to sell the house. Decrease your other expenses, refinance your loan to a 30 year, and remember that a portion of your interest will still be tax-deductible (something not present with rental expense).

How do I know all this? Been there, done that. In the past 5 years I've been through a very expensive divorce, a pricey house re-build due to ****ty construction (of course, post divorce), a disastrously costly short-sale, and several loss of job scenarios.
I currently have all my expenses mapped on a monthly spreadsheet and know exactly how much I need to make to cover my bills plus save above and beyond a 401K.
To this point I have not had to sell my 993, nor my S4 daily driver - but they would be headed to the "chopping block", albeit not willingly, should I need to. I've been personally "downsizing" selling various toys, watches, and other possessions to both pay bills, decrease my need for space (be it storage or living), and to continue to pay for current interests and "fun".
So far for me it’s been do-able.

Last, but not least, I will address the 993 aspect – it is the 993 Forum after all. Steve, you have had a very public love-not so love relationship with this car. I recognize that there are aspects of ownership that make you extremely happy, but do you really need the burden of a costly, temperamental, high profile vehicle right now in your life? Not even including the spousal acceptance factor (if you give the car up, it will be MUCH easier to ask her to give up her ski trips/ salon visits/ etc in the name of family financial harmony), the car is just an object. I love my 993, and would hate to see it go. But if push came to shove, it’s just a car.

I wish you the best of luck.

whale_of_a_tail

I very much admire your candor, OP. I'm new to the forum, but I hope you'll permit me to offer my POV here, as my family was in a similar situation a couple of years ago.

I would suggest selling both the 993 and the BMW and picking yourself up a mid 90's Volvo. They're dead nuts reliable and can be had for around 5-6k in VERY good condition. They're also nice, and would not look out of place in a garage like yours. Cars will always come and go (you're talking to the king of Car Attachment, here), and the proceeds from the sale of both cars (No doubt well over $30k) will make for a nice addition to your savings while also lessening the degree to which you have to dip into said savings every month.

While I totally can relate to your attachment to your 993, no matter how much you've put into it, one's family, their wishes, and their well being should probably always be first. That is not to say you have not put them first (sounds to be quite the contrary), just clarifying my position.

It makes perfect sense for your wife to readily put the 993 on the chopping block when cuts need to be made. I know, I know, but its a car. A luxurious, high performance, impractical, trailing-throttle-oversteering, money-pit (albeit a beautiful one) of a car. It makes sense even to me, and I'm a die-hard car enthusiast. If you REALLY need to tighten your belt, then get rid of it. However, if you're just having to weather a few bad months, its probably smarter to keep it and sell something less important to you.

Depending on your credit rating, try to refi definitely.

As far as renting a house; if you're REALLY looking to move you can find owners who could give a ***** about your income...they're just dying for a tenant. You could find a very nice house to rent at whatever income level you are easily. Owners are much more willing to work with your situation (you have savings, etc so your income isn't so crucial), they don't just plug your income number into a computer and approve or deny you like an apartment complex would. Thats if you wanna move.

I wouldn't touch your 401(k). The tax ramifications are just ridiculous. You're talking to an accountant who has told many people "You owe $51,000 to the IRS because you took a full distribution from your 401(k)" a few times in his life. Roll it into a Roth if you do anything with it.

Good luck, fellow Porschephile. Its tough times for all of us, man.

MrBonus

Sweet, finally a winner!

Steve 96C4S

Ok, so we'll try that spreadsheet idea. I know she won't like it very much, at all, as I've brought it up in the past, but reality has stricken. I feel like we've cut back to the nub on spending, but I'm probably wrong. We haven't traveled in a year anywhere other than 2 mostly free short out of town vacations. No more European or Island travel at all. We rarely eat out and when we do, we split meals sometimes or eat for cheap.

I doubt we'll have to pay much or anything for my stepdaughter's education as her dad pays for most everything so far, up to this point. We may escape that bullet (he's offered to pay for a car when she turns 16 this year). Maybe he'll treat her to... a 993, mine. Keep it in the family, yeah, that's the ticket.

Ok, you've talked me into not going into the 401k. That's a subject that's closed with us for now.

And if per chance we decide to sell and rent a house (I really can't see us doing this at this point), it's good to know they don't rent totally based on current income.

On a happier note, and I guess/hope this thread is coming to an end now, I look forward to our local "Rennlist Meet and Drive" this Sunday coming up. It'll be good to see folks, maybe for the last time, maybe not.

You guys have really helped me out more than you'll know with your tough, candid, biting and heartfelt comments. Great community here that I'll miss. I hate to ask this question but in selling a 993 with the CEL on (it's been on for about 4 years now), will I HAVE to have the ports cleaned (it's an SAI issue) in order to sell it? Or could one put a 993 for sale and just let the new owner deal with it, figuring that repair into the price?