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At crossroads

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ukrkoz
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Location: seattle
At crossroads  Reply with quote  

Well, maybe not really, but..

Hi all

We are at crossroads, a little bit.
Situation is as follows:

1. Family of 2 working; age 59 and 56; total income around $250K before tax. Wife's job is very stable large hospital. Mine is OK, good size corporation, maybe a bit of hesitance on future...
2. we own a property paid off, for 2 years. We have over $100K cash stash as result. Only keeps growing.
3. Property itself is very nice, but the neighborhood is not so. It's not bad, simply hodge podge of mobil homes, on large lots, and less appealing houses on acreage. It's historical Boeing blue collar employee retirement area.
4. Entire area is booming. Developers develop large lots available, townships expand, improvements everywhere. But the immediate neighborhood is what it is. No major crime, just iffy looking.
5. Here's where the dilemma is:

- neighbors behind the fence went foreclosure and house was flipped by investors. It's 1.34 acre lot, very rare here flat land. They flipped house completely, starting from framing. I am considering (so was my wife) to buy them out, rent it, and eventually sell. Will be in $300K range.
- unfortunately, while they were flipping the neighbors, we looked at 22 acre very private, very nice property, about 2 miles away (we are rooted in this area for family ties). VERY nice property. $980K sale price. We even made initial offer.
To buy this property, we'd have to sell our current house, and still stay with about $450K mortgage. We can pull it quite easy and even pay off in about 8-9 years.
This particular property is not selling. Been for sale for almost a year, they started with $1.2 mill.
I pulled the plug on it, as I realized several things. One, we are tying ourselves into large mortgage instead of income, right into our retirement years. Two, it is a very non-liquid liability, that will be hard to move in case of need. Three, even if we sell it to downsize in ten or so years, we'll lose interest money paid to bank and capital gain tax. I counted roughly $300K loss, which is about worth of the neighbor's property.
Whilst on the neighbor's, we can pay it off in 2 years, rent it, and have someone else assist with mortgage via rental payments plus, after it's paid for, it's straight income. Of course, comes with hassle of being a landlord.

What do you approve of? As of course, my wife got monkey brain on this and wants "the mansion" no matter what the numbers are.

Thank you
Post Sat Jun 07, 2014 1:40 pm
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JonCartoon
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Investing  Reply with quote  

everything is simple, you can invest your money in stocks, taking mind last reforms in the U.S., I can put money in great Canadian company http://www.fvpharma.com/
Post Thu Jun 19, 2014 11:44 am
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Wino
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Re: At crossroads  Reply with quote  

quote:
Originally posted by ukrkoz
We are at crossroads, a little bit.
Situation is as follows:

1. Family of 2 working; age 59 and 56

(snip)

What do you approve of? As of course, my wife got monkey brain on this and wants "the mansion" no matter what the numbers are.


59 and 56... That's as far as I got... Why would you want to saddle yourself with $450K of liability/mortgage at nearly 60? That alone tells me I'd go for the flipped rental property.

And what we do or do not approve of doesn't matter. It's your choice to make. DW will get over the lack of the mansion, I'm sure. My DW wanted similar (not as much acreage, but much closer to town. It was sold (after more than a year on the market) one week before we decided to put in a bid. DW survived, after all.

Good luck, whichever way you go.
Post Thu Jun 19, 2014 1:20 pm
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liwern
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Re: At crossroads  Reply with quote  

quote:
Originally posted by ukrkoz
Well, maybe not really, but..

Hi all

We are at crossroads, a little bit.
Situation is as follows:

1. Family of 2 working; age 59 and 56; total income around $250K before tax. Wife's job is very stable large hospital. Mine is OK, good size corporation, maybe a bit of hesitance on future...
2. we own a property paid off, for 2 years. We have over $100K cash stash as result. Only keeps growing.
3. Property itself is very nice, but the neighborhood is not so. It's not bad, simply hodge podge of mobil homes, on large lots, and less appealing houses on acreage. It's historical Boeing blue collar employee retirement area.
4. Entire area is booming. Developers develop large lots available, townships expand, improvements everywhere. But the immediate neighborhood is what it is. No major crime, just iffy looking.
5. Here's where the dilemma is:

- neighbors behind the fence went foreclosure and house was flipped by investors. It's 1.34 acre lot, very rare here flat land. They flipped house completely, starting from framing. I am considering (so was my wife) to buy them out, rent it, and eventually sell. Will be in $300K range.
- unfortunately, while they were flipping the neighbors, we looked at 22 acre very private, very nice property, about 2 miles away (we are rooted in this area for family ties). VERY nice property. $980K sale price. We even made initial offer.
To buy this property, we'd have to sell our current house, and still stay with about $450K mortgage. We can pull it quite easy and even pay off in about 8-9 years.
This particular property is not selling. Been for sale for almost a year, they started with $1.2 mill.
I pulled the plug on it, as I realized several things. One, we are tying ourselves into large mortgage instead of income, right into our retirement years. Two, it is a very non-liquid liability, that will be hard to move in case of need. Three, even if we sell it to downsize in ten or so years, we'll lose interest money paid to bank and capital gain tax. I counted roughly $300K loss, which is about worth of the neighbor's property.
Whilst on the neighbor's, we can pay it off in 2 years, rent it, and have someone else assist with mortgage via rental payments plus, after it's paid for, it's straight income. Of course, comes with hassle of being a landlord.

What do you approve of? As of course, my wife got monkey brain on this and wants "the mansion" no matter what the numbers are.

Thank you


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Post Sun Jun 22, 2014 8:23 am
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Wino
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Location: Dubai
 Reply with quote  

Gold is a terrible investment. I wouldn't "invest" in gold on pain of death. Just suggesting it shows that the poster has no clue how markets work or what a good investment is.
Post Sun Jun 22, 2014 9:03 am
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ukrkoz
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Cash: $ 9.30

Posts: 43
Joined: 04 Nov 2010
Location: seattle
 Reply with quote  

Sorry, was out of this for a while.

Thank you for responses
Post Sat Jun 28, 2014 4:46 pm
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