All Forum Posts by: Tom NA

I don't think you're getting much response because you're a high risk loan. Nobody is giving you a refi because your homes aren't worth what you think they are - otherwise, they would be selling. If you can't sell for a certain amount, say $100k, then there's no reason to believe that your property is worth that amount. I suspect if you had enough real equity, you could find a loan.

Wow, $10k in monthly payments and then tack living expenses on top of that. I've gotta think you're looking at least at $130k per year right off the top and even in CA, it takes much more than an average income to cover that.

Anyway, it's obvious getting yourself into this that you're not very good at finances and I think you shouldn't be discounting some of the suggestions so quickly as the comments and advice is coming from people that I suspect have managed money much better than yourself. If you come seeking advice, you should be open to receiving it and really thinking through each suggestion.

For example, you believe you can't sell your cars because you are underwater but let's look a little closer using purely made up numbers:

o Assume $1000 in monthly car payments total for the next 24 months = $24,000 more to be paid.
o Also assume that you are "underwater" on each car $5000 so if you sell both, you need to bring $10k to the table.
o Replace with a single crappy car for $3k
o Ignoring time value of money, you just "found" $24k-10k-3k=11k. If you start to think beyond the short term pain of selling your car at a loss, you can see that it's actually a good financial move.

Again, these numbers are made up but I suspect they are not totally out of line with reality. The idea that you need to keep spending money in an area where you are already over-extended makes no sense.

Finally, this really isn't a real estate question, it's a financial planning question. You don't need advice from people here, you need a good financial planner who can help you put an *overall* plan in place to get you on the road to recovery. Your problems are much bigger than just real estate and you could use the help of a qualified professional to establish a recovery plan.

Good luck.

I would say if that's your car in the picture, perhaps selling it and getting something a bit more spartan would also go a long way toward improving your "proven liquidity". If you want to be successful, in my opinion you need to take what may sometimes feel like painful steps in order to do so and that may include a change in lifestyle.

Tony - I understand the LLC protecting you but where are the tax advantages? I thought it was just a pass-through with no tax advantages. What am I missing?

The nicer side of me agrees that you should follow what others have said and take the advice of a good lawyer.

The sarcastic side of me just sees this as another example of someone who has no idea how to manage money and ultimately I and others in society will have to pay for it... Sorry, but if you can't live up to your obligations, I think you should have your credit destroyed, salary garnished, etc.

The only property that I bought occupied resulted in an evicition within 2 months. Doesn't mean I wouldn't do it again but I'm 0 for 1.

Or an even simpler formula that will get you in the ballpark that I've always used:

Assume $700 payment (P+I) for every $100k in mortgage. No, it's not exact but you should be able to do that one in your head.

I'm *not* a tax attorney, CPA, or anything else but... to my knowledge, that information is half correct. You can't deduct the interest of a rental property against your ordinary income. You can only deduct it against the passive income you make from the property itself. If you make at least $150k AGI, the best you can do on a rental property is zero things out (no writeoff allowed - thus, the great myth that rental property is a great tax writeoff!). If you make less, you can claim a paper loss (income minus all expenses including mortgage interest, depreciation, etc.) up to a certain amount (not sure how much, maybe up to $25k?). This is all readily available information either in IRS documents or use a good tax software to do your taxes and it will figure all of that out for you.

Since this is a RE board, people on here may not agree with me but if I were you, I would seek advice on and figure out your overall financial situation before worrying about real estate. Don't take advice on your overall financial situation from someone who has a myopic view - in this case, real estate. In my opinion, with a family and no money saved, your first priorities should be investing in 401k's and 529's before you begin to put yourself at greater financial risk than you are already in. Otherwise, you may find yourself with no money to put your kids through college and no money to retire with. Good luck.

I'm going to take a slightly different angle at this question and ask why you want out? Is this your residence or a rental? If it's your residence, why the need to move? If you stay put and can afford the payments (no indication that you can't), there's no credit hit or other negative to worry about.