request investment/property advice

[WebBoard]

From: Nic Johns


Hi
I request advice on the following scenario for a friend.

He lives in a house valued at between $800,000-$1 million. It is his only property.

He doesn't work for anybody else and cant work for anybody else due to ill health.

He has a $150,000 mortgage on the property. He also has $150,000 credit in the bank, of which $60,000 is being used on outstanding bills and renovations, leaving $90,000 credit.

Mortgage repayments and living expenses are $1300/per week.

Should he pay $90,000 on the mortgage or leave it as credit?

What should he do with the credit? Should he borrow more? Buy new property? Buy a business?
What should he do?

 

[saskatoon]

Reply: 1
From: Terry Mc


On 7/10/02 12:21:00 PM, Nic Johns wrote:
>Hi
>I request advice on the
>following scenario for a
>friend.

Since we're on this board why not read
Jan Somers' book first. Then research the
ideas of some of the contributors e.g.
positive cash flow, etc.
What about Freestylers?

Terry Mc

 

[see_change]

Reply: 1.1
From: See Change


Nic

I'll be very surprised if anyone is prepared to give a straight answer to this one. There are too many variables.

In particular re friend setting up business. We have no idea of his abilities / strengths / weaknesses etc. What may be appropriate for some would be a recipe for disaster for others.

One thing though , If I was in a situation where I was "financial challenged" I wouldn't be doing any renovations unless it was utterly essential. I'd wait until I had my long term plan established and then think about non essential things. If the renovation is going to increase the value of the property and give him more equity that he wants to use for other purposes, that's a different situation.

see change

it's better to be guided by your dreams than your fears