Best option to pay for large unexpected expense

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ZSH1023
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Best option to pay for large unexpected expense

Post by ZSH1023 »

Hi all,

First time poster. I got the bad news this week that a very large oak tree on my property is diseased and needs to be removed this year. I’ve gotten 4 quotes from arborists and all are around $15,000.

I don’t just have $15K liquid so my options as I see it are 1) cash out part of an IRA and pay the penalty/taxes, 2) take out a 401k loan and pay it off over 5 years , or 3) refi my house with cash out.

I looked into the refi and I have to refi another 30 years (I’m 8 years in on my current mortgage). It would drop the rate to 3.35% and I’d pay only about $60 less a month than I currently do. I should note I’m 51, single, and not looking to sell/move anytime soon as long as my job holds in this economy. Which we all know is a big if right now.

Looking for advice on the lesser of all these evils that makes sense. I’m leaning towards the refi.

Thanks for any advice. It is much appreciated.
BradJ
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Re: Best option to pay for large unexpected expense

Post by BradJ »

How close is this tree to your house? Your neighbors house? If far enough where it couldn’t harm a structure, I wouldn’t worry about it. If it’s close enough, I would ask around for a recommendation for a qualified “good ole boy” with a chain saw. This would be much less than an arborist.
Gufomel
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Re: Best option to pay for large unexpected expense

Post by Gufomel »

$15k? That just doesn’t sound remotely right. How large is this tree? I had a 50-60 ft spruce tree removed that was about 8 ft away from the house, and I was annoyed to pay $1400 for it.

Google search indicates $2k is the high end for tree removal. If you had said $5k, I would have thought that was high, but maybe possible in a VHCOL area for a massive tree right next to a structure. I just don’t understand how $15k could be possible to remove a tree.
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Watty
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Re: Best option to pay for large unexpected expense

Post by Watty »

ZSH1023 wrote: Wed Jul 22, 2020 12:46 am I’ve gotten 4 quotes from arborists and all are around $15,000.
Gufomel wrote: Wed Jul 22, 2020 5:58 am $15k? That just doesn’t sound remotely right.
+1

Even if they need to bring in a crane and it takes a crew all day to remove the tree. Other than it being big is there something special going on like it is in a backyard with limited access?

Does that include the stump removal? In some situations removing the stump can cost a lot more than removing the tree since that can involve a lot more work and equipment. If so you can just have them remove the tree then deal with the stump later when you have the money saved up.

One issue could be that you are talking to arborists and not just tree companies. You would still want to make sure they are reputable insured companies but around here arborists are mainly higher end specialists for when there are legal issues or you are trying to figure out what trees can be saved and how to save them. They have their roll in some situations but you already know that that the needs to come out. An analogy might be that you could hire an architect to build a garden shed for you or you could have a carpenter build it.
lazydavid
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Re: Best option to pay for large unexpected expense

Post by lazydavid »

We had three trees removed at our previous home, one was an oak nearly 60' tall. I think I paid $1600 to have that one removed and the stump ground, 12 or so years ago. So maybe $2k today?
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Nate79
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Re: Best option to pay for large unexpected expense

Post by Nate79 »

If you take debt off the table what are your other options? How about save up the money and pay in cash? How long would it take to save up the money?

You said the tree needs to be removed this year. Well how about a few months from now and save as much money as possible delaying all other savings until you have the cash.

And get some new quotes. That's crazy high.
NJdad6
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Re: Best option to pay for large unexpected expense

Post by NJdad6 »

Get quotes from tree removal companies. I got a few quotes to remove 3 very large oak trees (80-100’ tall) of around $7k. Reached out to another (insured company) and they did it for $3500. I live in a HCOL area. $15k is way out of line.

They removed the stumps as well. This was in 2019.
oldfatguy
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Re: Best option to pay for large unexpected expense

Post by oldfatguy »

Gufomel wrote: Wed Jul 22, 2020 5:58 am $15k? That just doesn’t sound remotely right. How large is this tree? I had a 50-60 ft spruce tree removed that was about 8 ft away from the house, and I was annoyed to pay $1400 for it.
+1

I've had dozens of trees removed over the years, and none ever came close to that amount. You don't need an arborist to remove a tree. Get quotes from tree services.
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alpenglow
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Re: Best option to pay for large unexpected expense

Post by alpenglow »

Unless this is a giant tree in the back yard of an urban area looming over 4 houses or something, this quote makes no sense to me. My Mom's house is in a HCOL area and she always hired certified arborists to do work on massive trees, including many removals. The cost never came remotely close to this. Even in an emergency when a giant oak fell on my sister's roof, threatening to crush the whole house, the cost was $5k. Again, certified/insured arborist.

Where do you live?! Do you have pics?
toocold
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Re: Best option to pay for large unexpected expense

Post by toocold »

The best option is to use your emergency fund. If you don't have that and you need to take out a loan, you have a larger issue that should be addressed.

On the tree itself, how important is it to remove the tree right now?
tashnewbie
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Re: Best option to pay for large unexpected expense

Post by tashnewbie »

toocold wrote: Wed Jul 22, 2020 7:03 am The best option is to use your emergency fund. If you don't have that and you need to take out a loan, you have a larger issue that should be addressed.

On the tree itself, how important is it to remove the tree right now?
+1 regarding the potential larger issue here. If you don’t have a “separate” emergency fund or a taxable brokerage account that’s sufficient to cover you in reasonably expected “emergencies,” then it’d be good to go to the drawing board and think about that, so that you’re not in a similar position in the future.

I don’t know anything about tree removal but it looks like you’ve gotten sound advice to seek additional quotes from regular tree removal companies.
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8foot7
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Re: Best option to pay for large unexpected expense

Post by 8foot7 »

No way I'm paying 15k to remove a tree. I'm rolling the dice and if it falls and damages something, that'll generally be covered by insurance. Or I'm finding a cheaper option, like taking it apart a little at a time -- find someone to trim some limbs this year, more limbs next year, to get it down to something manageable. Or something.

I would certainly pay a few thousand for a huge tree if it included removal of everything, stumps included. But 15k? Nah, I'll take my chances.

Others may not find that risk bearable; to each their own.
Broken Man 1999
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Re: Best option to pay for large unexpected expense

Post by Broken Man 1999 »

$15,000 seems outrageous to me.

I have several oaks in my yard, and I keep them trimmed as we have high winds occasionally. I haven't spent $15,000 total, that includes having a palm tree removed.

So, as others have mentioned, get some tree removal quotes from tree cutters.Those quotes might get your price down to a very managable amount.

Make sure the companies are insured, no need to deal with those who are not. Also, this activity might require a permit in your area. Pay no attention to what the tree people might say concerning a permit being necessary.

Broken Man 1999
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sailaway
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Re: Best option to pay for large unexpected expense

Post by sailaway »

8foot7 wrote: Wed Jul 22, 2020 8:31 am No way I'm paying 15k to remove a tree. I'm rolling the dice and if it falls and damages something, that'll generally be covered by insurance. Or I'm finding a cheaper option, like taking it apart a little at a time -- find someone to trim some limbs this year, more limbs next year, to get it down to something manageable. Or something.

I would certainly pay a few thousand for a huge tree if it included removal of everything, stumps included. But 15k? Nah, I'll take my chances.

Others may not find that risk bearable; to each their own.
If you have already been told about the problem and don't address it, insurance may not cover the damage.

Are any of your IRAs Roth? If so, you can remove the contributions without penalty or tax.
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8foot7
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Re: Best option to pay for large unexpected expense

Post by 8foot7 »

sailaway wrote: Wed Jul 22, 2020 8:38 am

If you have already been told about the problem and don't address it, insurance may not cover the damage.

Indeed a risk. But negligence is difficult to prove. Shelling out 15k today is an immediate loss. Like I said, I'd look for cheaper options but if I couldn't find any, I'm not accepting a 15k loss. All sorts of scenarios could come to pass, including selling the house, the tree falling down by itself in a direction that doesn't cause damage, the arborist being wrong about how diseased the tree is, etc.
BarbBrooklyn
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Re: Best option to pay for large unexpected expense

Post by BarbBrooklyn »

BradJ wrote: Wed Jul 22, 2020 5:53 am How close is this tree to your house? Your neighbors house? If far enough where it couldn’t harm a structure, I wouldn’t worry about it. If it’s close enough, I would ask around for a recommendation for a qualified “good ole boy” with a chain saw. This would be much less than an arborist.

Please do not go the "good ole boy" or DIY route. Friend of a friend rented a cherry picker and a chain saw, sent a willing 17 year old neighbor up to do some work on trees. Hit electrical wires. Boy is in very bad shape; homeowner will most likely lose his home and business.

Look for tree surgeons and tree removal, not arborists.
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gr7070
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Re: Best option to pay for large unexpected expense

Post by gr7070 »

Ditto those questioning price. Do you have Nextdoor app or a local Facebook group? Ask for recommendations there.

Do you have a paid for car?

It's the best, of bad, options for a quick chunk of cash. At great rates and short term, as well - which are positives.

And create a six month emergency fund for the next large unexpected expense or unexpected loss of income.
drake19
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Re: Best option to pay for large unexpected expense

Post by drake19 »

Will they let you pay by credit card? You could pay that way and then immediately move the balance over to another card offering a deal for no (or very low) interest for a year.
BradJ
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Re: Best option to pay for large unexpected expense

Post by BradJ »

BarbBrooklyn wrote: Wed Jul 22, 2020 9:00 am
BradJ wrote: Wed Jul 22, 2020 5:53 am How close is this tree to your house? Your neighbors house? If far enough where it couldn’t harm a structure, I wouldn’t worry about it. If it’s close enough, I would ask around for a recommendation for a qualified “good ole boy” with a chain saw. This would be much less than an arborist.

Please do not go the "good ole boy" or DIY route. Friend of a friend rented a cherry picker and a chain saw, sent a willing 17 year old neighbor up to do some work on trees. Hit electrical wires. Boy is in very bad shape; homeowner will most likely lose his home and business.

Look for tree surgeons and tree removal, not arborists.
Good point, and I think my overall opinion was to not hire some "arborist" rather a tree service. But I agree, do not hire anyone who is not bonded and insured.
MadHungarian
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Re: Best option to pay for large unexpected expense

Post by MadHungarian »

The other route to seriously look into is to sell that oak tree for lumber. When you say "diseased oak tree", as an amateur woodworker I hear "potentially valuable highly figured hardwood".

It's quite likely you would be able to find urban logging folks who would take the tree away for free or even pay you to let them take it. Maybe try looking under "Urban Logging" or some such. Maybe try posting in craigslist or some such.
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Kenkat
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Re: Best option to pay for large unexpected expense

Post by Kenkat »

Another payment option would be a HELOC.
OnTrack2020
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Re: Best option to pay for large unexpected expense

Post by OnTrack2020 »

As others have stated, $15,000 for the removal of a tree is extremely expensive. Seek out tree services, someone who is insured, and get a few quotes. We've had several trees removed over the course of several years, one being extremely large, and haven't spent near this amount in total.
flyingaway
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Re: Best option to pay for large unexpected expense

Post by flyingaway »

I would do it myself, unless it is in a location that may easily damage other people's property.
Lalamimi
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Re: Best option to pay for large unexpected expense

Post by Lalamimi »

You do not need an "Arborist" to cut down a tree. Check on your local Next Door Neighbor site, or Facebook page for companies. We have dozens in our area. Just be sure they remove all and grind the stump. We have had large pines removed for $600.
TN_Boy
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Re: Best option to pay for large unexpected expense

Post by TN_Boy »

8foot7 wrote: Wed Jul 22, 2020 8:44 am
sailaway wrote: Wed Jul 22, 2020 8:38 am

If you have already been told about the problem and don't address it, insurance may not cover the damage.

Indeed a risk. But negligence is difficult to prove. Shelling out 15k today is an immediate loss. Like I said, I'd look for cheaper options but if I couldn't find any, I'm not accepting a 15k loss. All sorts of scenarios could come to pass, including selling the house, the tree falling down by itself in a direction that doesn't cause damage, the arborist being wrong about how diseased the tree is, etc.
The OP wasn't clear on whether it had to be removed because it might fall on his house, or maybe it might fall on somebody else's house. If the danger is to neighbors, you pretty much have to deal with the problem.

That said, I agree with everybody else, surely one can do better than 15k. But also as people have said, while 15k is a lot, this is not totally out of line for an unexpected house expense. We had to replace HVAC systems in a house barely a decade old a while back. That was expensive, and not really expected.
softwaregeek
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Re: Best option to pay for large unexpected expense

Post by softwaregeek »

I had a tree issue, not as big.

My yard guy knew a guy who took care of it for about $1k. I doubt they were bonded and insured but they did seem to know what they were doing.
jarjarM
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Re: Best option to pay for large unexpected expense

Post by jarjarM »

We had a pine tree (the crown covered an area of several hundred sq ft) fallen over in the backyard due to diseases, it costed ~2k to remove it. Even with 40+ ft of fences repairs, it didn't come close to $15k. Get another quote.
flyingaway
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Re: Best option to pay for large unexpected expense

Post by flyingaway »

In a general sense, I am currently building an account for large unexpected expenses in retirement, after I had more than $5,000 water bills this year.

The account will eventually reach $100,000 and will be invested in the Fidelity's new zero cost total market index fund.
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dodecahedron
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Re: Best option to pay for large unexpected expense

Post by dodecahedron »

ZSH1023 wrote: Wed Jul 22, 2020 12:46 am Hi all,

First time poster. I got the bad news this week that a very large oak tree on my property is diseased and needs to be removed this year. I’ve gotten 4 quotes from arborists and all are around $15,000.

I don’t just have $15K liquid so my options as I see it are 1) cash out part of an IRA and pay the penalty/taxes, 2) take out a 401k loan and pay it off over 5 years , or 3) refi my house with cash out.
If you or spouse were in any way negatively affected by COVID, you have the right to take early distribution penalty free AND you have up to three years to repay the funds back into your IRA and keep it tax free to boot.

https://www.cnbc.com/2020/06/19/irs-exp ... vings.html
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Toons
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Re: Best option to pay for large unexpected expense

Post by Toons »

15k?
Scratching my head on the number
Too much for one tree
Unless it is a Giant Sequoia





:mrgreen:
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Spiderv6
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Re: Best option to pay for large unexpected expense

Post by Spiderv6 »

$15K???!!!!

Real Data:

I live in a HCOL area and had a large tree removed a few weeks ago. It was difficult to access, took all day, required a 38 ton crane, was between the house and a pool, and i also had 4 other trees removed a few days later for $3K, and I thought that was outrageous.
tibbitts
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Re: Best option to pay for large unexpected expense

Post by tibbitts »

flyingaway wrote: Wed Jul 22, 2020 5:22 pm I would do it myself, unless it is in a location that may easily damage other people's property.
You can't be serious in suggesting someone with no experience no equipment tackle a "large" oak tree.
tibbitts
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Re: Best option to pay for large unexpected expense

Post by tibbitts »

softwaregeek wrote: Wed Jul 22, 2020 6:52 pm I had a tree issue, not as big.

My yard guy knew a guy who took care of it for about $1k. I doubt they were bonded and insured but they did seem to know what they were doing.
There is no way I would have someone without insurance remove a tree.
rockstar
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Re: Best option to pay for large unexpected expense

Post by rockstar »

I had quotes for trees by my home, and they ranged from $600-$1200. I'm guessing you live in a highly affluent area. When I lived in one, every service I called for my home was way out of line, and no matter who I called for quotes, I always couldn't get a good price because my neighbors would write it off as the price of living there, rather than negotiating. Super frustrating.
tibbitts
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Re: Best option to pay for large unexpected expense

Post by tibbitts »

flyingaway wrote: Wed Jul 22, 2020 8:08 pm In a general sense, I am currently building an account for large unexpected expenses in retirement, after I had more than $5,000 water bills this year.

The account will eventually reach $100,000 and will be invested in the Fidelity's new zero cost total market index fund.
I don't see why you'd use an equity fund for what is basically an emergency fund, and also don't see why you'd choose a fidelity zero fund for a taxable account.
flyingaway
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Re: Best option to pay for large unexpected expense

Post by flyingaway »

tibbitts wrote: Wed Jul 22, 2020 10:00 pm
flyingaway wrote: Wed Jul 22, 2020 8:08 pm In a general sense, I am currently building an account for large unexpected expenses in retirement, after I had more than $5,000 water bills this year.

The account will eventually reach $100,000 and will be invested in the Fidelity's new zero cost total market index fund.
I don't see why you'd use an equity fund for what is basically an emergency fund, and also don't see why you'd choose a fidelity zero fund for a taxable account.
The account is relatively large for a single purpose, I just want it to be invested properly.
Last edited by flyingaway on Wed Jul 22, 2020 10:16 pm, edited 1 time in total.
fyre4ce
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Re: Best option to pay for large unexpected expense

Post by fyre4ce »

ZSH1023 wrote: Wed Jul 22, 2020 12:46 am Hi all,

First time poster. I got the bad news this week that a very large oak tree on my property is diseased and needs to be removed this year. I’ve gotten 4 quotes from arborists and all are around $15,000.

I don’t just have $15K liquid so my options as I see it are 1) cash out part of an IRA and pay the penalty/taxes, 2) take out a 401k loan and pay it off over 5 years , or 3) refi my house with cash out.

I looked into the refi and I have to refi another 30 years (I’m 8 years in on my current mortgage). It would drop the rate to 3.35% and I’d pay only about $60 less a month than I currently do. I should note I’m 51, single, and not looking to sell/move anytime soon as long as my job holds in this economy. Which we all know is a big if right now.

Looking for advice on the lesser of all these evils that makes sense. I’m leaning towards the refi.

Thanks for any advice. It is much appreciated.
I agree with the other posters that $15k is probably outrageous. The biggest thing you can do for yourself is get more quotes and try to get the cost down. In the worst case, you'll understand what's driving the price up so high and sleep better at night.

To address your question more directly - the best option is clearly the cash-out refi. Cashing out a retirement account is a desperate move taken only as a last resort (desperate like when the mafia is going to kill you if you don't pay your debt in a week, and you have no other way). A 401k loan is better, but only a little. The cash-out refi is definitely the lesser of the three evils, and it sounds like based on the interest rate that you should be doing it anyway. What's your current interest rate? I'd also say you should consider a 15 year mortgage, given your age. Do you want to still be paying your mortgage when you're 80? If you can't cash-flow a 15 year mortgage with your income and expenses, maybe those need a review.

Also, let this be a motivator for you to get an emergency fund of 6 months of expenses in a savings account or similar. Wouldn't it be nice to not have the financial stress you're feeling right now? Once this blows over, make it a priority.
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Sandtrap
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Re: Best option to pay for large unexpected expense

Post by Sandtrap »

Refi makes sense of your options.

How big across is the tree trunk?
How tall?

Please be sure that you set aside some of your cash out for future emergencies so you are not caught in a bad position again.
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orangesherbet
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Re: Best option to pay for large unexpected expense

Post by orangesherbet »

We had to remove a large pine tree. I got a few quotes and one was from an arborist (he just came up on google search and I didn’t know he was an arborist till he showed up). He quoted $7,200. Everyone else quoted around $1,200-$2,000. Nice guy, very knowledgeable. Over qualified for tree removal.
LittleMaggieMae
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Re: Best option to pay for large unexpected expense

Post by LittleMaggieMae »

If you have enough equity to do a refi to get the 15K - why not just look into HELOC? I'm assuming you won't need 30 years to pay back the borrowed 15K. The nice thing about setting up the line of credit is that you avoid having this dilemma the next time you need a access to a large sum of money for a short term (say less than 5 years).

I have a 30K line of credit (currently with a 0 balance) in addition to a mortgage on my primary residence.

Also, I'd get quotes from a tree removal service. I had a 60 white pine foot pine tree removed from the 10 foot space between my garage and my neighbors garage with the added complication of the crane and removal truck had to fit into a narrow alley and navigate around electrical wires and the pole they were strung thru/across as well as avoiding the neighbor's garages on the other side of the alley as crane brought down each chunk of tree. It cost me $1800 with stump removal (which was another challenge as they had to use a smaller stump remover machine and it took nearly an hour to grind it out.) It took nearly 4 hours to get the tree cut down.
JackoC
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Re: Best option to pay for large unexpected expense

Post by JackoC »

tibbitts wrote: Wed Jul 22, 2020 9:53 pm
flyingaway wrote: Wed Jul 22, 2020 5:22 pm I would do it myself, unless it is in a location that may easily damage other people's property.
You can't be serious in suggesting someone with no experience no equipment tackle a "large" oak tree.
I agree with that and your subsequent post. *Four* quotes at ~$15k. Maybe the 5th quote will be the charm but a price that high is possible for a *very* large oak tree...which is what OP says it is. In which case either DIY or a quick and dirty uninsured provider are ridiculous suggestions.
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