New here and so excited to find this forum!
I'm 37, have 2 kids (toddler and infant), married.
Live in and own a 2 bd beach condo in Venice, CA worth between $650-700K. I refi'd 1st TD @5.25% with cash out in 2005 for $600K. Took out a 2nd @ 7.5% in 2008 with cash out in 2008 for $230K. PITI + HOA = $4500/mo -- both mortgages are 10 yr interest only, 30 yr fixed.
I have $1 mil invested in a family business (grocery stores, hotels, restaurants) and though it was originally agreed that I could get my capital back with 30-60 days' notice, with the economy as it is, I can't get it without replacing my position -- at least for a while.
I'm gifted about $10K/month.
Fixed expenses around $4K/month. Did not include beer, entertainment, travel or taxes (s-corp and c-corp).
We freelance on occasion, so there is additional money that comes into the s-corp. Payroll from s-corp happens as appropriate.
Currently have about $100K liquid and a token $5-10K in a combination of IRAs (Roth, traditional, SEP). Also vested in a pension fund through a union around $55K.
Through the union, if I work about 6 weeks every 6 months, I can maintain great health insurance for the whole family. If I work about 400 hours a year, I will add to qualified pension years. I need 3 years after age 40 to receive health benefits in retirement.
My work is in film editing and the time demands/life demands are great. I worked to maintain health benefits for the last 3 years, but want to see how paying for our own health insurance goes in 2010. California has some low-cost health insurance for kids, so will look into that, too. Not so sure about the union pension and health being there when I retire, so my original plan was to buy a 2nd property (bigger house, with yard in less expensive area) and rent out the beach condo ($3200-3600/mo. long-term tenant or $3500-5000/mo. as exec furnished or vacation rental). But the economy and the mortgage industry have changed so I need to figure out:
1). Do I just start paying down my 2nd since I can't safely make anywhere near 7.5% in an investment?
Or
2). Should I go for a short sale and see if the 2nd will settle for less than full payment?
3.) Should I not pay down my 2nd and try a short refi?
My big issues are that my gifts are not taxable=not reportable so it would likely be impossible to qualify for a refi, not to mention being self-employed. If I didn't have 2 rambunctious kids, staying here would be fine, but for everyone's sanity, moving to a house, even a rental would be better. Also, my capital was meant to be temporarily invested -- I was wanting to do a career change -- found out we were having a baby and now we're really dependent on the gift income. Obviously, I need a more secure source of income.
Got here by "luck" -- paid my way through private college, learned how LBYM and after all my debt was paid, didn't really change my spending habits. Bought property in Venice at the market bottom, rolled equity and own savings into a private investment.
But luck won't likely keep me safely FI!
My immediate family is a combo of blue-collar and govt employees, so retirement for them is all set with good pensions and SS still there for them. I need a good education and would appreciate any input.
Thanks!
I'm 37, have 2 kids (toddler and infant), married.
Live in and own a 2 bd beach condo in Venice, CA worth between $650-700K. I refi'd 1st TD @5.25% with cash out in 2005 for $600K. Took out a 2nd @ 7.5% in 2008 with cash out in 2008 for $230K. PITI + HOA = $4500/mo -- both mortgages are 10 yr interest only, 30 yr fixed.
I have $1 mil invested in a family business (grocery stores, hotels, restaurants) and though it was originally agreed that I could get my capital back with 30-60 days' notice, with the economy as it is, I can't get it without replacing my position -- at least for a while.
I'm gifted about $10K/month.
Fixed expenses around $4K/month. Did not include beer, entertainment, travel or taxes (s-corp and c-corp).
We freelance on occasion, so there is additional money that comes into the s-corp. Payroll from s-corp happens as appropriate.
Currently have about $100K liquid and a token $5-10K in a combination of IRAs (Roth, traditional, SEP). Also vested in a pension fund through a union around $55K.
Through the union, if I work about 6 weeks every 6 months, I can maintain great health insurance for the whole family. If I work about 400 hours a year, I will add to qualified pension years. I need 3 years after age 40 to receive health benefits in retirement.
My work is in film editing and the time demands/life demands are great. I worked to maintain health benefits for the last 3 years, but want to see how paying for our own health insurance goes in 2010. California has some low-cost health insurance for kids, so will look into that, too. Not so sure about the union pension and health being there when I retire, so my original plan was to buy a 2nd property (bigger house, with yard in less expensive area) and rent out the beach condo ($3200-3600/mo. long-term tenant or $3500-5000/mo. as exec furnished or vacation rental). But the economy and the mortgage industry have changed so I need to figure out:
1). Do I just start paying down my 2nd since I can't safely make anywhere near 7.5% in an investment?
Or
2). Should I go for a short sale and see if the 2nd will settle for less than full payment?
3.) Should I not pay down my 2nd and try a short refi?
My big issues are that my gifts are not taxable=not reportable so it would likely be impossible to qualify for a refi, not to mention being self-employed. If I didn't have 2 rambunctious kids, staying here would be fine, but for everyone's sanity, moving to a house, even a rental would be better. Also, my capital was meant to be temporarily invested -- I was wanting to do a career change -- found out we were having a baby and now we're really dependent on the gift income. Obviously, I need a more secure source of income.
Got here by "luck" -- paid my way through private college, learned how LBYM and after all my debt was paid, didn't really change my spending habits. Bought property in Venice at the market bottom, rolled equity and own savings into a private investment.
But luck won't likely keep me safely FI!
My immediate family is a combo of blue-collar and govt employees, so retirement for them is all set with good pensions and SS still there for them. I need a good education and would appreciate any input.
Thanks!
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