In a real bind and need advice.

[dollarbill]

China...the deal is coming on really soon.

Chaos...I wouldn't have suggested it to my daughter
if it wasn't going to be a good deal for her.
If we had to resort to government benefits the rent assistance
would make it a survivable ( though not desirable ) scenario.
Her circumstances might change but this situation would
be a 'positive geared' investment so maybe not a biggy.

Westminster...30 year loan orig mortgage 2004 $220k current 7.31%
I would say LESS than the property you linked to.

 

[DaveM]

Westminster...30 year loan orig mortgage 2004 $220k current 7.31%

$220k at 7.31% is $309pw IO or $348 P+I so theres something up with your loan.

Before you start selling, I really really really do believe you should talk to one of the brokers from here and try to refinace your loan and extend it to property value, use excess funds to pay down most of the CC debt.

 

[MIZBUF]

Dollar Bill -Sorry to hear of your position Have a look at Hot Copper a site for share traders. Go to "ASX General'" & take a look at the thread- "Anyone one else having Worst time this year"- Rebel has a large CC debt & there are a few posts on how to handle it. Not saying you should take any of the advice but it may give you some ideas . All the best

 

[dollarbill]

Thanks MIZBUF.
Had a talk to a financial adviser this morning and some
of the info at Hot Copper was incorrect but generally a good read.
Hope you have a great festive season.

 

[westminster]

What did the financial advisor say? Is the light at the end of the tunnel?

 

[dollarbill]

Advice at this point.
Write letters to all creditors asking for
a hold for 3 months pending sale of home.
No idea who our next landlord will be.
( hopefully related )
Awaiting replies from creditors.

 

[china]

Advice at this point.
Write letters to all creditors asking for
a hold for 3 months pending sale of home.
No idea who our next landlord will be.
( hopefully related )
Awaiting replies from creditors.

So your advisor also advised selling your home to your daughter? I think us posters here have got the right idea.

 

[dollarbill]

In order of preference.
1. Daughter as new landlord.
2. Bargain hunter as new landlord.
3. Normal purchase and we move out.
Early days.

 

[china]

So you are now working hard on the daughter to be the new landlord? Are you selling this to her as a good investment opportunity whilst at the same time doing something good for her parents?

I hope that she can help you out on this one.

 

[kum yin lau]

Hi, I sympathise with you.

Selling to an investor is not such a bad deal. Say $220000 with rent back @ $350 pw that's > 6% yield

For you the seller, you get say $15K to pay the credit card companies, bringing down your loan totals.

Then you get rental assistance, in SA it's 50% of the rent so you only pay $175 pw

Your living costs reduce to a fraction of the present mortgage/loan costs.

I had a quick look at Realestate.com & I agree with you. It is a bit of a bargain for any intending property investor.

I'd be surprised if you don't get some offers from people here on this forum.

Good luck,
KY

 

[Melbournian]

Things have gone pear shaped and we need to sell our only property.
It is currently our home and we would like to keep it that way ( as tennants after selling ).
Current valuation $250,000
Amount owing $196,000
Plan A.
Sell to our oldest daughter.
The catch...she has no available cash.
We would sell to her at say $200,000
Is there any way she can borrow to buy us out WITHOUT having
any upfront cash ( for LMI, Stamp Duty and all other fees and charges ) ???
Plan B.
Let the wolves tear us to pieces.

sorry to hear this but from my experience in transfering or selling your property to your daughter you would need an independent valuation from a agent on the property value as oppose to saying you were selling for 200,000 and if she isn't a first home owners - she would have to pay the full duties on the current valuation.

 

[sanj]

Why would the OP sell to an investor at 220k if the house is worth 250k???

 

[kum yin lau]

He saves selling costs [can be 10K or more] plus he can make arrangements for leaseback & for a quick cash sale.

KY

 

[lizzie]

Before you resign youself to selling ... did you talk to any of the excellent brokers on the forum about refinancing and getting a lower interest rate?

As advised, your repayments seem to be really high in the current market. Even if you go on interest only repayments, and put all your surplus towards the credit card debt (should always pay down your highest interest rate debt first).

Why are you, or your wife, not able to look for employment? Something as simple as dog walking/minding, newpaper/brochure delivery, lawn mowing or expanding your online business to include more "in demand" items etc ... there are endless options

 

[sanj]

He saves selling costs [can be 10K or more] plus he can make arrangements for leaseback & for a quick cash sale.

KY

selling fees on 250k property will not be 10k and offering to pay say 50/week over market rent would likely have the same effect of enticing an investor

i just think it makes absolutely no sense for someone who is under severe financial pressure to sell a property for 30k under market value

 

[DaveM]

Before you resign youself to selling ... did you talk to any of the excellent brokers on the forum about refinancing and getting a lower interest rate?

I have suggested this many times and had no response, it seems the OP is blinkered into one course of action despite others being available.

Option 1 - Refinance and extend loan, pay down most of the credit card debt. End result - owns home, most CC debt gone, similar total repayment as current, still has assets and money.

Option 2 (OP's decided course) - Sell house cheap to anybody who will take it, lose all equity. End result - no longer has home, no longer has money, still has 100% of credit card debt, eventually be forced into bankruptcy by creditors.

I am not sure why option 2 is the preferred option despite all the advice to the contrary.

 

[kum yin lau]

Hi, Option 2 costs far less. No rates, no water, no insurance. That's 4K p.a. alone.

No mortgage. That's about 12K p.a. in interest alone. [6+%]

In contrast, pay $175 pw in rent = $9100 p.a.

The real difference is 7K p.a. in cost of living. Not a lot, only $583 per month but that's enough for food if one were to be really stretched.

When the government pays half your rent, why is owning your own home SO important? And he has no hope of owning, in his current circumstances.

From what I can see [cut down to the core] , the best option is not to sell to his daughter. The best option is to sell to WHOEVER will pay him the most. That way, he gets the most $ to pay off the credit cards fastest.

KY

 

[kathryn d]

2. Focus on innovative termite control product.
In production for years, modest sales, newly redesigned for
export while eliminating carbon emmissions.

It seems this is his passion.

Maybe he has put all his finances into this product, and wants to start a "new slate".

Personally, if he goes the bankrupt or bargaining with creditor route..he is trying to wiggle out of his obligations.

 

[Sean M]

The main challenge of owning a business is cash flow. Using a credit card to fund business expenses is a downward spiral. If you had looked back at things possibly a overdraft would have been better and you probably would of got better rates given you had a property to secure it.

The suggestion would to be listen to some of the posters on here and look at your situation from an overall rather than fix 1 problem and go to the next problem.

There is a reason your struggling and its because your trying to juggle more balls than you can handle. Slow down, focus on your end goals and ask yourself is what your doing helping you get to that end goal or not. Just because your in debt now does not mean your not going to pay it back. Just because business is slow does not mean it will not pick up. In business you have ups and down.

I also get the feeling that your dead keen on two things.
1. sell the house to your daughter
2. put the money you make to your new business and hope it pays off.

Hope it all works out for you.

 

[jackbak]

In order of preference.
1. Daughter as new landlord.
2. Bargain hunter as new landlord.
3. Normal purchase and we move out.
Early days.

Don't take option 2. The bargain hunter will take the bargain and then kick you out after the lease expires.