First, I'd like to thank everybody for the helpful and motivational comments they left for me in my last blog. It really, really is great to have people offering support and ideas and motivation and such : ) You guys are awesome!
Anyway.... an interesting proposition *may* have arose, and I can't decide if it's something that we should consider or look into further. I was talking to my brother (aka Mr. I Have Done Everything Perfectly With Money Since My First Job... seriously, he's never paid a penny in interest. AND he still lives with mom and dad, pretty much rent free. He's got more cash and assets than most 60 year olds, I bet) who knows we have financial issues, but doesn't know the extent of how awful it is, as nobody but DH and I do. Anyway, I was talking about this house and although I like it and we got a good price and pretty good interest rate on it, I'd sell it in a second. He asked how much and I blurted out $90,000 (plus so that we'd get to pay no closing costs). We owe $83,000 on it still, so that seems like a pretty good price to just blurt out. He said "I'd buy it! That's a steal!" ..........I just said "really?" and we talked about it for a few minutes. It was just a casual conversation, but he got out his magical money calculator and started running the numbers of how much $$$ he'd make. I said if we did do it, the condition would be that DH and I get to live here and pay what our old rent was before we bought the house (and lived in the same apartment) which was $525 AND we'd get to keep our dog and still foster dogs from the shelter (the most rewarding thing I've ever done, BTW.) We owe a little under $83,000 on it now.
So it was just a casual conversation, BUT it might be something to consider if he's serious about it, which I think he might be after he ran the numbers. I know nothing about number crunching. I don't know if it would be a bad idea to lose the equity that we already have in the house, which admittedly isn't much. I know we'd lose the tax benefits too, which is another thing to consider. Although being that he thought $90,000 was a good price, I could probably jack it up a little bit. That would make a *HUGE* dent in the CC debt that we have (even though the thought of selling our house we've had for a year to pay off credit cards is depressing... I've never been madly in love with this house and it was more of a convenience thing at the time to purchase it) we'd still have a place to live and not have to worry about moving to a place that would let us keep the dogs (right now there's 220lbs worth of dogs laying at my feet, something I don't think landlords would take kindly to, LOL!) and we wouldn't have to pay water, garbage and homeowner's insurance, etc.
My husband is NOT keen on the idea, as selling things to family members rarely turns out good and there's all the potential for problems and such... which I see his point 100% on that. I love my brother to death and we're very close and I wouldn't want a stupid house to change 26 years of awesome brother/sister awesomeness.
I'm very interested to hear what everyone has to say about this or any research calculator thingies that you guys can point me to. And I don't know if it's anywhere here, but our CC debt combined with the back medical bills (from the days of emergencies and no insurance) we pay on is (regretfully) about $27,000. Thoughts? Pros? Cons? Am I stupid for even considering this?
maybe an interesting proposition, would like to hear thoughts..
January 29th, 2008 at 11:31 pm
January 29th, 2008 at 11:34 pm 1201649682
January 29th, 2008 at 11:40 pm 1201650051
what is your mortgage payment? would you only be netting $7K from the sale? it might not be worth it.
January 29th, 2008 at 11:42 pm 1201650126
January 29th, 2008 at 11:51 pm 1201650699
Our mortgage is $770 a month, fixed rate.
And we would only be netting $7k, but that's enough to knock out a 20% cc.
And we would probably do a professional appraisal if it did turn out to be something we were really considering... I don't know! I thought $90k was a really high price to ask for this house!
January 30th, 2008 at 01:11 am 1201655494
January 30th, 2008 at 01:23 am 1201656220
For one thing, what is your mortgage again?
Another, can you please have him explain why he thinks it's a steal?
Third, if it really IS a steal, I'd get the house appraised and even listed on the open market to see if you can get even more than that!
I don't know what kind of financial shape your brother is in, but I have a sister who buys properties for passive income. (Essentially, she buys a house cheap. Have tenants who in turn try to cover the mortgage with the rent.) She thinks it's a great idea, but personally, I think it's too much hassle and risk.
RISK is the key.
When you get all this information, I would also post this in the forums.
However, I would recommend not to say or do anything further until you have all the information at hand. Also, what kind of person is your brother? Trustworthy? I don't mean as a family member, but from a business and financial standpoint.
January 30th, 2008 at 01:52 pm 1201701154
January 30th, 2008 at 02:47 pm 1201704478
January 30th, 2008 at 03:35 pm 1201707347
$700 a month for a house plus the tax write off is probably a good deal. Could you find a place to leave at that price - the tax write off? Would you be saving significant money that you would be able to deploy against your debt?
If no, I would try to keep the house and maybe try to get a low interest loan from your brother. Maybe you could start with a $5,000 loan at 6-7%. You can knock off some of the high credit cards, and he makes more then a CD.
Could be a win-win for everyone.