DC from Cape Cod

If he doesn't need the liquidity from the sale of the house until retirement then he is better off selling it in 5-10 years when he retires. It will be worth more than as well. Refinancing now will reduce his monthly expenses without selling. The only reason to sell, IMO, is if he needs the liquidity NOW and he doesn't.

1st priority is balancing the budget and getting cash flow back into the black. He needs to refi and then squeeze his monthly expenses until they drop back under his income.

2nd step can be increasing liquidity, IF NECESSARY, by selling off assets such as cars, watches, whatever.

The biggest issue here is his negative cash flow and the areas that needs to be addressed are his mortgage (refi to 30 year) and his non-essential expenses (ski trips, eating out, shopping, etc.).

His wife has to be part of the solution...and that doesn't mean making him sell his toys and keeping hers.

matt777

I don't see carrying that lifestyle on $50k household income. Its as simple as that. A top salesperson should be getting $100k plus in many industries. I would certainly review your job seeking strategies. Perhaps you need to try something different. I know things are tough out there. Good luck and keep us informed whatever you decide!

User 121721

DC,
I agree with all you said except for the presumption that the house will grow in value. No one knows for sure -- I personally believe that the bubble has burst and the efforts of the federal gvmt and the federal reserve have been successful in partially re inflating it -- but that won't last IMO.

Why hang on to a house you know is not appropriate for your needs, both financially and socially?

Would the OP buy the house he has now if he never owned it in the first place, and could buy it for the cash he could recoup if he sold it now? --I don't think so. Selling the house would help with cash flow significantly when one takes into account utilities, taxes, not to mention the diminished risk associated with being heavily invested in this real estate market. Just my opinion.

PS-- I envy you, I grew up on Cape Cod and really miss living there....

csertich

Steve,

As others have said:
-sell the 993 (this has come up numerous times. If you don't sell it now, we'll all see another post in six months or so on the same topic)
-refinance the house (you can double up payments when things get better). This really is a no brainer with interest rates as they are.
-don't touch your 401k.
-find a good financial advisor and put a plan together. As of right now, my thinking is you don't have a good plan for finances when it comes to retirement. Get your wife signed up on the financial plan. You both might need to downsize your cars.
-don't give up on the job search. It will pay off. Buy a nice C2 in a few years.
-consider selling other items of value that you don't need.

I didn't mention selling the house because it sounds like that is the thing that you will miss most.
But you are going to have to make some big sacrifices to stay in it.

Best of luck to you Steve. I'm sorry that times are tough for you.

chuck

TRINITONY

That zipcode is a very desirable area; a lot of folks relocating to MC MD area with kids usually begin looking there. It will only go up in value...

Steve 96C4S

I've been looking for a $100k + job in my field (sales) for the past 11 months on an almost every day basis! I can't find a company yet to hire me, and I've applied for just about every job in my area on all the major search engines. I keep pushing on with that endeavor though.

I am finally saying "uncle". We're definitely not downsizing and selling this house. Our daughter is still in school in this area and we're not moving, period. We don't need to right now. Plus, someone is renting out part of our home (the apt above the garage) so our cash flow is much better. Our $2133 mortgage payment went to $1333 a month for an almost million dollar house. That's a good thing. You can't get a 1 BR apt in Bethesda MD for $1333 month. There's just no reason to sell this house.

The 993? That's another story. The BMW? She's saying that they both equate to around $3k a year each in maintenance when averaged out over 5 years. That's $5k-6k a year for maintenance. Over 5 years that's around $25k just to keep my cars on the road. ****e. In good times that didn't matter. In these times it does. I get it. One Japanese car, coming up. Did I happen to say ****e? Yes, I did. Her Acura RL is paid off by the way. Not a bad car, really.

Called my refi guy today and am waiting to hear back on the rates. Thanks to you guys I did something I really didn't want to do (call him in the first place). I hope I don't regret it down the road.

Cheers,
Steve R

Leander

He could refinance and then move into the garage apartment and rent out the big house with all the stuff in it. That would generate positive cash flow, he'd keep his toys and still be lord of the manor.

Full Boost

This comment above says it all.

And this one prove we will have this thread or a version of it again in 3 - 6 months.

Steve - once again - dont know you and have no skin in the game - but you need to face reality..... you are living beyond your means. Its a tuff pill to swallow - I can still taste it - but making some tough decisions now and some SACRIFICES will benefit you in the long run..... If I didnt know better I would say you (and more so your wife) are acting like that selfish generation that think it DESERVES nice things etc.... and that people that have ACHIEVED nice things got LUCKY...

OUT.

Simon.

Steve 96C4S

Great idea, except it's 1 room and a bathroom, no kitchen, no laundry, just 278 sq ft! Only one person could live there in this day and age in the USA. In Haiti, maybe a whole family would be calling it home for a lifetime.

Leander

All joking aside, I hope it works out for you. Good luck.

timothymoffat

Sorry Steve but this has come up in a couple of your threads. Not trying to stir the pot but it sounds like like your family (you and your wife) is having some financial difficulty but you are the one being tasked with making things right. Making things right requires both parties to do their part, whether that's finding work, coming up with solutions etc, or selling toys. Marriage is a partnership isn't it?

Canyon56

I tend to agree. Not specifically about Steve, but that a lot of people in this country own way too much stuff. And if they are too poor to have stuff, then they sit around dreaming about owning stuff.

It's kind of amazing how much crap people own. And most of it is crap that just sits there taking up space. We don't need much to live comfortable, happy, and honorable lives. But lots of people are addicted to stuff. It's like they feel they don't exist without owning stuff. It's an odd kind of power trip, to own things.

Money can't make you happy. It can only give you a big house to be unhappy in.

Bruce SEA 993

I assume you are networking...from what I have seen the "major search engines" are great at collecting a massive amount of undifferentiated resumes but I have not heard of anyone getting a job from them. I would love to be proven wrong and I hope you are working all avenues. Most of my friends have found jobs via folks they know in the industry they are looking in.

Let us know what is up in the search.

Cheers!

ZAMIRZ

Find and take the 60K/year job NOW, sell off all the stuff you don't need NOW. You're either in denial or you're jaded into thinking it will all work out if you keep posting on rennlist. When you're broke and posting from the soup kitchen cafeteria on borrowed internet, we will all be here to tell you "I told you so."

You're making this way more complicated than it really is. Take the advice you've been given, and TAKE ACTION. Posting on rennlist will not change the situation.

Sean993

How many kids do you have? 6000 sq ft is enormous. I have a good friend who lives in a similar sized house, his utility bill is $1300.00 a month in the summer, taxes $40k not to mention cleaning it, but he also has 4 young kids and makes over 7 figures, and he is sick of wasting money on it. We live live in 1800sqft including garage apt with a 5 year old and it feels like enough space.
Seems to me your real depreciating asset is your house, in comparison your car is a drop in the bucket. Personally I would sell the house at market value, even if it's less than you paid for it.
Rent and Sit on the cash until the Dow drops back to 7000 which could be as soon as this summer then invest, you'll be in great shape by retirement. Historically houses only appreciate 2-3% a year which we are now back to for a very long time.