Made it this far! finally admitting I am a little stuck. (debt)

16 Replies

Hello everybody, so I bought a duplex 7 months ago, racked up about 15k on three different credit cards. I don't want to explain haha. 

QUESTION: Is there a way to deal with this debt more strategically?? 

  • I've heard about taking one loan out and paying them all off.
  • Ive heard about paying them off with another credit card to dodge interest timeline. 

So really anything will help. Currently I have to pay 1200 to Home Depot in a few days to avoid their interest. One card I am already past the date and racking interest as I write this. There is another one too. 

I am not drowning, I am able to make minimum payment on all of them and I am Okay I believe for now haha. however, I feel like I'm racing and its just so scattered. Also this is my first duplex, I intend to get it cash flowing and to buy more. Im living in one side and renting the other, I used there rent to purchase this place haha. I still can't believe I managed to get it. 

so that's about it, after years of learning and hyping myself up, I have my first one, but I am justtttt a little bit stuck. so if anyone has any advice or knowledge for me I would greatly appreciate it. 

Thank you everyone. 

@Bryce Vaquera

You need to get out of that credit card debt fast. If there’s enough equity in the duplex I would refinance and pay off the cards. I think you’ll find the longer you make the minimum payments the longer you’ll be swimming upstream. Congrats on the duplex and good luck.

Originally posted by @Brendon Pishny :

@Bryce Vaquera

You need to get out of that credit card debt fast. If there’s enough equity in the duplex I would refinance and pay off the cards. I think you’ll find the longer you make the minimum payments the longer you’ll be swimming upstream. Congrats on the duplex and good luck.

I have put about 20 thousand into it so far. I do not know much about refinance. I know I need to do it at some point. I don't think its time for that. I bet this place is worth more though haha its much nicer in one unit at least. 

Getting out from underneath the high interest credit cards charge is vital. I'd cut back your lifestyle in every feasible way to enable this. If you really scrimp and save you can whittle them down to size. Any opportunities for additional income? Not for the rest of your life but for a few months to get this debt gone. See if there's any other type of loan you can get to cut the interest rate. If you don't pay off the Home Depot card, you may have to pay all the deferred back interest. That will hurt.

Originally posted by @John Teachout :

Getting out from underneath the high interest credit cards charge is vital. I'd cut back your lifestyle in every feasible way to enable this. If you really scrimp and save you can whittle them down to size. Any opportunities for additional income? Not for the rest of your life but for a few months to get this debt gone. See if there's any other type of loan you can get to cut the interest rate. If you don't pay off the Home Depot card, you may have to pay all the deferred back interest. That will hurt.

Thank you, Im good at being frugal. Ive been looking for opportunities online to make money because I work landscaping during the day. I don't intend to pay the interest. its all timed out pretty nice. It is just going to take a longgg time. 

First find a really smart and supportive mortgage lender with a great refinance package. Shop around! I get 10 letters a week begging me to refi! Hopefully there is equity in your duplex otherwise the bank wouldnt have underwriten it. Why not talk to the banker who wrote your loan? What was it appraised for? How much do you owe? You need to get married to all the numbers relating to this property. Maybe you should move to the basement & rent the other unit. Also you should have a CPA on your team. If you are a veteran you would be in good shape but … not suggesting you join up …

Originally posted by @Jane S. :

First find a really smart and supportive mortgage lender with a great refinance package. Shop around! I get 10 letters a week begging me to refi! Hopefully there is equity in your duplex otherwise the bank wouldnt have underwriten it. Why not talk to the banker who wrote your loan? What was it appraised for? How much do you owe? You need to get married to all the numbers relating to this property. Maybe you should move to the basement & rent the other unit. Also you should have a CPA on your team. If you are a veteran you would be in good shape but … not suggesting you join up …

This is my first property, and I Intend to buy more. I live in south Florida, no basement or attic due to flat roof. I don't really know how Re -fi will help deal with credit card debt. 

I don't have much equity, I bought it 7 months ago on a FHA and Im paying normally. I did rehab one unit from garbage to pretty beautiful. The other unit is pretty nice already.

It listed as 360k, we agreed to 335k, then it appraised at 314k. somehow I got paid 2000 dollars at closing haha I still don't understand that. 

thank you

A refinance won’t be an option since you don’t have enough equity and since you just purchased 7 months ago almost all lenders would go by purchase price and not new appraised value.

Congrats on the purchase! 🎉  🎊 

Haha!

You could try to find a credit card that offers a balance transfer with 0% interest for 12 months and then try to pay down ASAP, but if your cards are currently maxed out then your Fico is probably in the toilet until your cards are paid more down…

I'm getting the impression you don't really understand the importance of financial discipline. If you can't manage what you've got, you won't magically get better by increasing earnings. It's why so many people win the lottery or gain an inheritance and they quickly end up in debt again. You're walking a dangerous path that could lead to you losing the investment and possibly more.

Get a credit card with 0% interest on balance transfers. Move the debt there and do everything you can to pay it off as quickly as possible. If the card has a deadline for 0% interest, get another one before the deadline ends and transfer everything there. My wife had $12,000 in debt when I married her 23 years ago. We used several 0% interest cards, lived frugally, and put her entire paycheck towards the debt every month. It was paid off in 13 months and we have stayed debt-free since then.

I recommend you read "Set For Life" and get your house in order before it comes back to bite you.

Originally posted by @Nathan G. :

I'm getting the impression you don't really understand the importance of financial discipline. If you can't manage what you've got, you won't magically get better by increasing earnings. It's why so many people win the lottery or gain an inheritance and they quickly end up in debt again. You're walking a dangerous path that could lead to you losing the investment and possibly more.

Get a credit card with 0% interest on balance transfers. Move the debt there and do everything you can to pay it off as quickly as possible. If the card has a deadline for 0% interest, get another one before the deadline ends and transfer everything there. My wife had $12,000 in debt when I married her 23 years ago. We used several 0% interest cards, lived frugally, and put her entire paycheck towards the debt every month. It was paid off in 13 months and we have stayed debt-free since then.

I recommend you read "Set For Life" and get your house in order before it comes back to bite you.

Thank you, I appreciate the advice. I have a credit card I can do that with ( zero balance). Realistically. I have one card that is being charged interest. Ill get the balanced transferred soon.  Ive timed the others very well and I am fine with no interest. I just want to speed it up. 

Originally posted by @Jim Spatzenfeld :

A refinance won’t be an option since you don’t have enough equity and since you just purchased 7 months ago almost all lenders would go by purchase price and not new appraised value.

Congrats on the purchase! 🎉  🎊 

Haha!

Yea haha, because of this post I know what a balance transfer is and what it can do for me. 

Thank you guys

Answer is not some complicated scheme. You need a second and third job and stop all spending that isn’t food, shelter, and transportation. Period. Super easy.

The old dave Ramsey “live like no one else so you can live like no else” is what’s called for here.

I was just approved for a new credit card, zero interest for 18 months, it approved me to balance transfer all of it! roughly 3000 dollars. My other cards are all within promotion period. Oh! and My girlfriend was helping me pay it off anyways, so naturally I put her on the card to help her score. She was just giving me money before this haha. 

Thank you guys very much for all of the criticism and input. 

I think you REALLY need to stop and think about what you are doing.  Moving money from one card to another is a terrible idea....  why? because people have a habit of then just spending more on the original  cards so balances increase. 

You need a good mortgage broker and someone to help you understand how to organize your life so you dont crash and burn financially.  

If I were you I would cut all expenses that are frivolous and get some extra jobs and get the cc debt paid off then CUT UP THE CARDS.  keep one for emergencies ...  CC debt is like crack and most people can not handle having them. 

Originally posted by @Mary M. :

I think you REALLY need to stop and think about what you are doing.  Moving money from one card to another is a terrible idea....  why? because people have a habit of then just spending more on the original  cards so balances increase. 

You need a good mortgage broker and someone to help you understand how to organize your life so you dont crash and burn financially.  

If I were you I would cut all expenses that are frivolous and get some extra jobs and get the cc debt paid off then CUT UP THE CARDS.  keep one for emergencies ...  CC debt is like crack and most people can not handle having them. 

Its already done, thank you for your constructive criticism. I know most people have a habit of spending when they shouldn't. I don't. 

All of my debt is from rehabbing the property in order to make it livable. We had our personal reasons for needing it to happen fast. 

I am glad there are people like you on here to help.

thank you