Bought a house for 560k in 2007

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mouses
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Re: Bought a house for 560k in 2007

Post by mouses » Sun Dec 25, 2016 2:40 pm

OP, I think you need to handle the family finances. Only then will you know where the sink of money is. Will your husband let you do this? Probably not, but the current situation is headed for bankruptcy. He is throwing away money somewhere, plus the obvious problem of buying houses you can't afford and the nowright craziness of an interest only mortgage.

If one kid is about to go to college (how do you expect to pay for that?), I think it is unlikely that you are shelling out for pre-school or any child care expenses for either of them now.

I don't think anyone here can help much until the money sink is identified and fixed.

if I were you, I would make sure I had training to get a decent job myself. The kids are old enough for you to do that. That is regardless of the current situation.

leod
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Re: Bought a house for 560k in 2007

Post by leod » Sun Dec 25, 2016 2:53 pm

Cut the cable, you will not miss it after a while and linit the kids activities for now. That will free up some cash.

Put credit cards in the drawer so youll stop hearing the worksheet does not match the statement then start working on a budget.

I agree that you are spending too much on 2 or 3 houses (including china) id sell 1 or 2 even at a loss. Also stop buying houses.

Sunshine22
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Re: Bought a house for 560k in 2007

Post by Sunshine22 » Sun Dec 25, 2016 3:03 pm

Our house in China is paid off and it got paid off many years ago.

printer86
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Re: Bought a house for 560k in 2007

Post by printer86 » Sun Dec 25, 2016 3:48 pm

Maintaining multiple residences is what is crushing you financially. You and your husband need to to pick either NJ or GA and rebuilt your financial life.

KlangFool
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Re: Bought a house for 560k in 2007

Post by KlangFool » Sun Dec 25, 2016 7:34 pm

Sunshine22 wrote:Our house in China is paid off and it got paid off many years ago.
Sunshine22,

So, why are you keeping it? You could sell that house and use the money to pay for your son's college education.

It is very simple.

A) The house in NJ is costing you $7,200 per year.

B) You are renting at Atlanta at $1,800 per month.

C) You have a 50K house in China.

Your current housing situation is costing you $2,400 per month. And, you have only 40K of savings. You cannot afford to do all 3.

Moving to NJ with the same house will not save you. Your housing cost will jump up to $3,000 per month. Then, what are you going to do with your son's college education? Will you be in-state for NJ? Is it cheaper than Georgia? That is a lot of $$$.

KlangFool

aqan
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Re: Bought a house for 560k in 2007

Post by aqan » Sun Dec 25, 2016 8:51 pm

I'm kinda in the same boat.. will lose about 100K on a 450K condo if I sell it. My tax guys suggested renting it out for two years and then the capital loss can be written off as a business expense.
The rent fully covers the mortgage, tax, condo fees plus I get to keep about $150. It hasn't been two years yet but I will weigh my options next summer..
You may already be able to write off the loss so it won't hurt you that much.. I would've sold it if I was in your situation.

delamer
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Re: Bought a house for 560k in 2007

Post by delamer » Sun Dec 25, 2016 9:44 pm

Sunshine22 - is there some reason that you have not worked during these difficult financial times for your family?

Are you able to work in the US? Do you have a skill set that would make you employable?

That seems to be a partial solution to your problem, and something you should consider especially since you are the one who wants to relocate.

BogleBoogie
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Re: Bought a house for 560k in 2007

Post by BogleBoogie » Sun Dec 25, 2016 9:47 pm

Minty wrote:
bubbadog wrote:Sell the house, take your loss, and move on.
+1.
+1 (like the other +1's)

Doesn't sound like there is much to discuss on this one...

bsteiner
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Re: Bought a house for 560k in 2007

Post by bsteiner » Sun Dec 25, 2016 9:54 pm

aqan wrote:I'm kinda in the same boat.. will lose about 100K on a 450K condo if I sell it. My tax guys suggested renting it out for two years and then the capital loss can be written off as a business expense. ...
Did your "tax guys" consider Treas. Reg. § 1.165-9(b)(2), which takes a different position: https://www.law.cornell.edu/cfr/text/26/1.165-9?

itstoomuch
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Re: Bought a house for 560k in 2007

Post by itstoomuch » Sun Dec 25, 2016 9:55 pm

Do you not get depreciation for a rental?
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

ryman554
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Re: Bought a house for 560k in 2007

Post by ryman554 » Sun Dec 25, 2016 11:59 pm

bsteiner wrote:
aqan wrote:I'm kinda in the same boat.. will lose about 100K on a 450K condo if I sell it. My tax guys suggested renting it out for two years and then the capital loss can be written off as a business expense. ...
Did your "tax guys" consider Treas. Reg. § 1.165-9(b)(2), which takes a different position: https://www.law.cornell.edu/cfr/text/26/1.165-9?

I looked at this, too.

you need to transfer you basis (FMV - whatever adjustments) of the condo *when* you put it into rental service. If it went up, you are excluded on $250k of increase, if it went down, tough cookies. You certainly do get to claim a capital loss on any value change (including depreciation) during the rental period.

sawhorse
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Re: Bought a house for 560k in 2007

Post by sawhorse » Mon Dec 26, 2016 12:16 am

pasadena wrote:I would also get a detailed credit report for both of you - in fact that's probably the very first thing I'd do. Right now.

You say "my husband credit card statement is different". Can you expand on that ? What is different ? How much ?
Listen to this advice above.

You are entitled to a free credit report from each of the 3 major bureaus every year.

Find out what is going on with his credit cards. Do you have joint bank accounts? If so, look at those carefully. See if the amounts deposited are less than you would expect with his salary.

Based on what you wrote, my guess is that your husband has not given you full honest information about your finances. He may have lost money on a big investment you didn't know about, was a fraud victim, has a gambling problem, or some other financial problem you don't know about.

It's likely that he's ashamed or afraid of your reaction.

aqan
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Re: Bought a house for 560k in 2007

Post by aqan » Mon Dec 26, 2016 8:12 am

bsteiner wrote:
aqan wrote:I'm kinda in the same boat.. will lose about 100K on a 450K condo if I sell it. My tax guys suggested renting it out for two years and then the capital loss can be written off as a business expense. ...
Did your "tax guys" consider Treas. Reg. § 1.165-9(b)(2), which takes a different position: https://www.law.cornell.edu/cfr/text/26/1.165-9?
interesting.. I will talk to him about it when I see him next.

bungalow10
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Re: Bought a house for 560k in 2007

Post by bungalow10 » Mon Dec 26, 2016 8:16 am

OP - can I recommend a software that I think will help? It's called YouNeedABudget (or YNAB). I've been using it for years, with a little time, it will help bring clarity to your situation. I've been using it for a few years and it had given us the data needed to make some big decisions (DH leaving his job, selling a rental building, making a big move).

It might be tedious at first, but you will find it is worth it.
An elephant for a dime is only a good deal if you need an elephant and have a dime.

TropikThunder
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Re: Bought a house for 560k in 2007

Post by TropikThunder » Tue Dec 27, 2016 1:01 am

Sunshine22 wrote:The mortgage loan will reset for another 30 years at 4.75% interest rate.
OK, most of us (myself included) assumed the principal + interest phase of the mortgage was 20 years, not 30 years (explains why the monthly cost isn't increasing). I'm not in the home-buying market, how much better could they do then 4.75% on a $440k note?

2Birds1Stone
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Re: Bought a house for 560k in 2007

Post by 2Birds1Stone » Tue Dec 27, 2016 8:25 am

I would sell ASAP.

Also, that $500 for phone/cable is absolutely insane.

$40-50 for an internet connection + get an unlocked Fire TV Stick and save yourself $450/month. :sharebeer

cjhud32
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Re: Bought a house for 560k in 2007

Post by cjhud32 » Tue Dec 27, 2016 8:39 am

I ran into a similar situation in 2008. Tried to be a landlord and that just did not work. Have you thought about using a property management company to serve as your landlord? Yes, less money coming in each month but the best decision I made. Takes the work out of it for you and you can wait until you want to sell. You may go through several tenants like I have, but they place new ones that I ultimately approve. Something to consider.

Betterself
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Re: Bought a house for 560k in 2007

Post by Betterself » Tue Dec 27, 2016 10:56 am

As a Chinese immigrant, I assume a 50K flat in 2000 is valued between $500K-2M now. So I do not think this thread is about financial bankruptcy but about trust/mistrust in marriage.

OP, since your husband told you that you should look at credit card expenses, why not start from there? You at least should give him some benefits of doubt. If you still cannot reconcile the difference, you should go find a job first instead of trying to change your husband. Last but not least, find a lawyer to make sure you get your fair part of assets in China. You know how difficult it is to trace property ownership in China.

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Sandtrap
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Re: Bought a house for 560k in 2007

Post by Sandtrap » Tue Dec 27, 2016 4:22 pm

Minty wrote:
bubbadog wrote:Sell the house, take your loss, and move on.
+1.
+1

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Sandtrap
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Re: Bought a house for 560k in 2007

Post by Sandtrap » Tue Dec 27, 2016 4:29 pm

printer86 wrote:Maintaining multiple residences is what is crushing you financially. You and your husband need to to pick either NJ or GA and rebuilt your financial life.
agreed
+1
Last edited by Sandtrap on Thu Dec 29, 2016 10:25 am, edited 2 times in total.

inbox788
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Re: Bought a house for 560k in 2007

Post by inbox788 » Tue Dec 27, 2016 4:48 pm

aqan wrote:I'm kinda in the same boat.. will lose about 100K on a 450K condo if I sell it. My tax guys suggested renting it out for two years and then the capital loss can be written off as a business expense.
The rent fully covers the mortgage, tax, condo fees plus I get to keep about $150. It hasn't been two years yet but I will weigh my options next summer..
You may already be able to write off the loss so it won't hurt you that much.. I would've sold it if I was in your situation.
That's in interesting strategy. Do the capital losses carry over if you don't have the offsetting gains?

I'm surprised that's necessary since it's all about capital gains and losses, but personal property has some quirks, which in this case is a negative (while the $250/500k tax-free gains is the big positive).

OP, how long have you been renting out the property? Is it now 2 years of business use? If so, selling it now makes sense. Otherwise if it's a few months, wait it out for the tax break.

lostdog
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Re: Bought a house for 560k in 2007

Post by lostdog » Tue Dec 27, 2016 6:07 pm

Hi Sunshine,

I suggest you check out Dave Ramsey's Total Money Makeover book. A very good read and should get you on the right track with budgeting and marital finances.

opus360
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Re: Bought a house for 560k in 2007

Post by opus360 » Wed Dec 28, 2016 1:34 pm

Betterself wrote: I assume a 50K flat in 2000 is valued between $500K-2M now.
To OP,

Betterself beat me to it. That 50k flat is worth a lot, likely more than your mortgage here. Sell that house in China and buy a house in NJ instead.

hille141
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Re: Bought a house for 560k in 2007

Post by hille141 » Wed Dec 28, 2016 2:16 pm

lostdog wrote:Hi Sunshine,

I suggest you check out Dave Ramsey's Total Money Makeover book. A very good read and should get you on the right track with budgeting and marital finances.
This. Follow the baby steps and get to BS3b before purchasing a house. Immediately sell the house in NJ and flat in China. Get a firm control of the budget and wait a minimum of 6 months to a year to get things under control before buying a house.

Regardless of where the OP chooses to live, sell the house in NJ. That's too much house. Dave's rule of thumb of 25% of take home pay on a 15 year mortgage is a good guideline to keep a similar situation from happening again.

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