New to the board and financial planning!

[fousib9]

Hi all,
I'm a S 48yo F with a 15 yo son who is ill (I have no health insurance so I get help from family for meds etc). I live in the DC Metro area and I need to stay there for 3 years for school reasons. I will do this even if I have to live under a bridge.
I lost my (six fig) job in 2009 and have been eeeking it ever since. All in all in a dowward spiral ending in the recent sale of my house. I will get $265 in equity there. I still haven't found another job so income is 0 for now and I don't know how long that will go on. I've gone through all savings, raided my 401k so no savings left. However I still own a couple of condos but for various family reasons I don't get the rental income and cannot sell those.
I have moved into a $1750/mo rental (which believe it or not isn't expensive for our area), and have 0 debt of any kind. No student, car loans or cc debt.

My current issue is the 265k isn't enough to buy something cash here (at least not something I would WANT to buy, I'm ok renting) and I won't be able to get a loan until I find another job.

My question is would you wait until a job comes along (whenever that is) and then use the whole $250k (assuming I use 15 to live on) as a down payment or would you do something else?

Thanks!!!

 

[REWahoo]

Once you find a job, why not continue renting for a while until you can re-establish yourself and get back on your feet? What's the rush to buy?

Your description of your situation indicates you have nothing between you and living under that bridge other than this money. If there is a compelling reason why you must buy instead of rent, I would keep a sizable chunk of it as an emergency fund, not use it all as a down payment. You need some money set aside as a safety net.

 

[fousib9]

Yes my reasoning was to sell the house and use the net to buy something cash and live rent/mortgage free. Makes sense? (Turns out it's not do-able just yet o yes I may just hold off and rent for a while). Also I want to put some of that cash toward retirement and college fund for Jr.

 

[heeyy_joe]

In your situation, if you buy, do it with the absolute minimum. If the real estate market takes another severe tumble, you can walk away and still have some cash in your pocket.

Keeping the cash, when you do get a job, will help you max out your 401k and you can use your taxable stash to back-fill. Finding a job is the rush, finding a house is not.

 

[Meadbh]

Your priority should be establishing a reliable source of cash flow. In effect, a job. Forget the house buying for now.

Why can you not access the rent on the condos you own? Why can you not sell them? Are they garnished in some way because of previous debts? Tied up in family obligations?

 

[meekie]

Not sure if you've looked into medicaid for medical coverage for your kid, but it might help:
Children?s Health Coverage Programs in District of Columbia | InsureKidsNow.gov

I'd use the money to live on, and not even think about buying a house. I'd also look into finding any kind of job possible, as 265k won't last long if your rent is that much.

Good Luck, and welcome to the board!

 

[fousib9]

@Meadbh : No, no debt but my mom manages them and gets the income for now (She helps me anyway).

@ Meekie: I have looked into med coverage and applied to get it back in Oct 2012...still waiting...

...and yes it goes without saying but madly looking to get a job believe me...

 

[Meadbh]

@Meadbh : No, no debt but my mom manages them and gets the income for now (She helps me anyway).

@ Meekie: I have looked into med coverage and applied to get it back in Oct 2012...still waiting...

...and yes it goes without saying but madly looking to get a job believe me...

Would Mom be amenable to you taking on the management of the condos and keeping the income?

 

[fousib9]

@Meadbh... trut me in this case, I win with this arrangement! I couldn't take care of the condo, I'm too far... plus she probably helps me more than what I would get with the income from the condo, so, not a possibility I'm afraid...

 

[packrat44]

Renting, rather than buying, allows more freedom of mobility. At a time of uncertainty I would prefer not to be tied down to house ownership (and expenses). The ideal job offer may come from an area outside the DC area.

 

[fousib9]

@packrat: Wise. That's why I decided to rent but what if I don't find a job soon? My reasonning was at least the money's invested and I lower my living expenses significantly (rather than having a high rent to shell out) ...

 

[Meadbh]

Could you move into one of the condos you own? You wouldn't lose any rent, because you aren't getting the rent now.

 

[fousib9]

@Meadbh... no unfortunately not possible. (they're too far and I'm committed to the school district I'm in for another 3 years) .

 

[Calgary_Girl]

@packrat: Wise. That's why I decided to rent but what if I don't find a job soon? My reasonning was at least the money's invested and I lower my living expenses significantly (rather than having a high rent to shell out) ...

Welcome to the board. Sorry, I don't understand your reasoning here. Even with home ownership there are additional living expenses - maintenance, property taxes, etc. I agree with the others about continuing to rent. Why not invest the money from the sale of your old house in something liquid and that is easily accessible (if you really want the money "invested")?

Good luck with the job search...

 

[fousib9]

"something liquid and that is easily accessible" ...like what?

if you really want the money "invested"... if I don't I'm going to blow it (that's easy), so I wanted to get some revenue from it (another idea was to buy a cheap condo close and rent it).

 

[Meadbh]

"something liquid and that is easily accessible" ...like what?

if you really want the money "invested"... if I don't I'm going to blow it (that's easy), so I wanted to get some revenue from it (another idea was to buy a cheap condo close and rent it).

Aha.....so you have difficulty being LBYM, hence you want to keep your money where you can't get at it. Perhaps this is one of the root causes of your problem. However, real estate has its own risks.

 

[fousib9]

sorry but "being LBYM"? = ?

 

[fousib9]

oh Living below your means.... got it. No I do n't actually.

My problem stems from being unemployed 2 years, 3 times in a row, with 1 or 2 years periods of employment in between all the while spending approx $ 4500/mo for healthcare not covereed by any insurance. That's the root caue of my problem.

 

[Meadbh]

Well, then I feel for you. Will Obamacare help?

 

[fousib9]

Obamacare...dont' even know what it is. But no I don't think so. It *might* ...I think ...if for ex. I get another job and hop on their insurance, I can have coverage even though it would be a "pre-existing condition" for my son but I think that's it... that just covers Doc's visits and meds but that's just 20% of his total med bill...

 

[sheehs1]

@Meadbh... no unfortunately not possible. (they're too far and I'm committed to the school district I'm in for another 3 years) .

Can you clarify this? If you don't have a job why are you committed to a school district? Is it your son?

 

[fousib9]

Yes. He's on the autism spectrum and I know if I change school districts the disruption for him will be such that he won't graduate. Also, it's not like I've had any job offers from anywhere outside (and it's not for lack of trying, I actually think I'm in the wrong place pro speaking) so for now I'm searching from here... from eveything I'm reading everywhere this job market is better (Ha!) than most in the country so it's not like I'm looking from a desert... and I should clarify also that IF I did get an offer from somewhere else of course I would go, and try to find a solution for my son but I'm not sure what the chance of that happening is...

 

[Meadbh]

Autism is very expensive to manage properly and if you have found a good program for your son it makes sense to do everything you can to follow through with it. I admire and respect that commitment. A couple of questions:

Is your son's father contributing financially? If not, why not?

Given that your problem is lack of cash flow due to high fixed expenses and no income, the obvious way to improve your economic situation is to find a steady paying job. Early retirement should be the last thing on your mind. How do you think we can help you on this forum?

 

[Calgary_Girl]

"something liquid and that is easily accessible" ...like what?

if you really want the money "invested"... if I don't I'm going to blow it (that's easy), so I wanted to get some revenue from it (another idea was to buy a cheap condo close and rent it).

Sorry to hear about your son's medical issues.

In terms of investing so that it's liquid and accessible there are quite a few choices but you need to determine what your priorities are with the money. For example, there are high-interest savings accounts, stocks, bonds, mutual funds, etc. I'm just saying that there are other options out there besides investing all of your money into a new house, which will tie your money up. If it were me, I would continue renting and keep the money liquid.

 

[fousib9]

@Meadbh son's father has bailed from day 226. Never saw him after that.

I was bouncing off you the idea of buying a condo, renting it in order to get the revenue from it until I get a job. Sorry if I'm in the wrong forum. I think calgary girl hit it on the head though... I just like the idea of real estate because I don't trust Wall Street really but that's my own preference. Plus I figure I have the time to take care of a condo rental right now... I think i just gave up on the whole job thing... that may be the root of my problem!

Thanks to all!