ok - time for a financial overhaul...need perspectives

[Deleted]

Aug 16, 2019 9:01:28 GMT -5 Rukh O'Rorke said:

The thought of actually moving is too much at the moment, lol! Maybe going through the appraisal prep, and then all the work, would kind of clear the way for that step a bit?

I totally get that sentiment.  I often consider how much easier life would be in town, then I look around and think about all the work moving would entail and get overwhelmed and eat popcorn.

[GRG a/k/a goldenrulegirl]

Just some things to consider:

IF life continues along otherwise uneventfully (no job loss, kids eventually launch, etc.), how long do you plan to live in the house?  Do you see yourself living there in retirement?  Can you age safely in that house?  If not, then it's time to think about your next move.  IF a recession hits (and I know you shouldn't try to time the market!!), you might be able to score something more appropriate for your later years.  How can you better position yourself for that?  

[Deleted]

Aug 16, 2019 9:37:13 GMT -5 Rukh O'Rorke said:

Aug 16, 2019 0:14:30 GMT -5 schildi said:

I would sell that house and either move into an apartment, or find a condo or small new house that does not require much maintenance.

New is important - chances of needed repairs are much lower.

I would NOT start dumping repair money into the old house.

A comparable new construction in my area would be well over a million.

This link is a 10 year old home, on an odd lot abutting a training line in back. The land these new houses are on was previously not considered desirable enough to build on.

www.redfin.com/IL/Chicago/4151-N-Kilpatrick-Ave-60641/home/17458099

Mine is older, but nicer setting - away from train and highway lines, most homes on wider lots, and I have a double lot compared to this one, with side driveway to garage in back. The interior of this one is shiny and new, but most of the rooms look cheap to me. No woodwork. My house has lovely woodwork, Thick, detailed baseboards and window trim, chair rail in dining room, and crown moldings throughout the first floor. There is also a number of stain glass and leaded windows. I would not trade mine for this one.

Here is a new one that is one neighborhood over, that neighborhood is a little pricier. While I like my house, I would trade for this one!


www.redfin.com/IL/Chicago/3922-N-Tripp-Ave-60641/unit-1/home/13458709 

But, if you're going to retire in 7 years or so, are you going to stay in that expensive area? 

[Rukh O'Rorke]

Aug 16, 2019 9:20:50 GMT -5 bean29 said:

Speaking as someone who has an actual second kitchen in my basement, I would not go there.  Do you only have one full bath? I don't know if I would add the bath either. In a very short time you will be living alone. Your house most certainly will be more than you need. That house will generate more taxes, more cleaning and more upkeep too. I just read an article yesterday that a second refrigerator is a bad idea too - uses too much energy for the use you get out of it  (Love my 2nd fridge, and I think we can afford it, so I am just saying to think carefully about how much you want to add to your house). 

DH and I live in a 3 bedroom 3 full bath home. We have an extra bedroom and an office/kitchen/family room in the basement (also one of our full baths is in the basement). We have full windows in the basement and a separate entrance. We are being killed on property taxes. We had hoped to get one of the kids to transition from college to independence by living in the basement, but they are not interested at all. I could live with less house, but I don't think I will come out ahead on a sale/repurchase, and we have an interest rate close to 2%, so we will wait 8 years or so until the house is paid off to make any moves.

I would upgrade your laundry facilities, do any maintenance issues and possibly pay off the student loans. My sister-in-law used to say she wished she did not have 3 full baths, and I thought she was nuts - but now, I really am beginning to get where she was coming from. It is just more to clean when you are having company, and it is more maintenance to perform too.

I am only including the plumbing and electric for these in the basement slab and wall redo (part of the flood control system, is in the walls)! It would be super expensive to retro fit that afterwards, but I am not adding those in. Putting the plumbing and electric in place, jic I or next homeowner is interested, is relatively straighforward to include when redoing all the concrete. 

[Rukh O'Rorke]

Aug 16, 2019 9:38:42 GMT -5 GRG a/k/a goldenrulegirl said:

Just some things to consider:

IF life continues along otherwise uneventfully (no job loss, kids eventually launch, etc.), how long do you plan to live in the house?  Do you see yourself living there in retirement?  Can you age safely in that house?  If not, then it's time to think about your next move.  IF a recession hits (and I know you shouldn't try to time the market!!), you might be able to score something more appropriate for your later years.  How can you better position yourself for that?  

This is just not a consideration for me. I don't know if our genes are different, or if we just don't let these concerns influence us in my family. My mother is still in the family house I grew up in at 95, living alone. My father died at 96, after a very short illness. They never considered moving to another house. I don't even know what age safely means - if you are climbing up and downs the stairs daily - I think you are keeping in shape! My mother does use a walker now, and I do worry, but she will not consider moving!

In terms of retiring here, I just don't know. I had planned on that when I bought it. As a potentially multi-generational house, or pass on to kids when they had kids. Neither seems interest in that however, so now I don't know! I could golden girl it, there are 5 bedrooms. So - could get at least 2 rommates comfortably. But honestly I just don't know!

[Rukh O'Rorke]

Aug 16, 2019 9:39:13 GMT -5 minnesotapaintlady said:

Aug 16, 2019 9:37:13 GMT -5 Rukh O'Rorke said:

A comparable new construction in my area would be well over a million.

This link is a 10 year old home, on an odd lot abutting a training line in back. The land these new houses are on was previously not considered desirable enough to build on.

www.redfin.com/IL/Chicago/4151-N-Kilpatrick-Ave-60641/home/17458099

Mine is older, but nicer setting - away from train and highway lines, most homes on wider lots, and I have a double lot compared to this one, with side driveway to garage in back. The interior of this one is shiny and new, but most of the rooms look cheap to me. No woodwork. My house has lovely woodwork, Thick, detailed baseboards and window trim, chair rail in dining room, and crown moldings throughout the first floor. There is also a number of stain glass and leaded windows. I would not trade mine for this one.

Here is a new one that is one neighborhood over, that neighborhood is a little pricier. While I like my house, I would trade for this one!


www.redfin.com/IL/Chicago/3922-N-Tripp-Ave-60641/unit-1/home/13458709 

But, if you're going to retire in 7 years or so, are you going to stay in that expensive area? 

I'm just not sure of anything right now!


But some of this work is needed desperately. The porch repairs among them. Getting something on the front picture window before winter.

So - I could do maybe do the most pressing this fall, bank the money, and tackle others in the spring.

[Rukh O'Rorke]

welp - your counsel may have had an opposite effect than intended. After looking around at somewhat comparable homes, I really think that my house is worth the extra attention!

I wasn't particularly thinking it was the best use of cash, but as a needed step. But now I am thinking that the fix ups are really warranted, and could even potentially pay off!

ok - not as an investment, but you know, just regular.

[GRG a/k/a goldenrulegirl]

Aug 16, 2019 10:15:13 GMT -5 Rukh O'Rorke said:

welp - your counsel may have had an opposite effect than intended. After looking around at somewhat comparable homes, I really think that my house is worth the extra attention!

I wasn't particularly thinking it was the best use of cash, but as a needed step. But now I am thinking that the fix ups are really warranted, and could even potentially pay off!

ok - not as an investment, but you know, just regular.

I understand.  I live in the Boston area.  I bought in 2010.  I could not afford to buy this house -- or any house in my town for that matter -- now.  With kids still in college, we have another 10 years to go before retirement.  And, we aren't planning to move any time soon, but we do throw around the idea of selling and then either renting/buying somewhere cheaper or buying the retirement home in Maine and renting, etc.  Our house also needs some cosmetic work (thanks to the scam-artist contractor we used) which will get done, but maybe sooner if it will help us make up our minds sooner. 

[GRG a/k/a goldenrulegirl]

Aug 16, 2019 9:52:12 GMT -5 Rukh O'Rorke said:

Aug 16, 2019 9:38:42 GMT -5 GRG a/k/a goldenrulegirl said:

Just some things to consider:

IF life continues along otherwise uneventfully (no job loss, kids eventually launch, etc.), how long do you plan to live in the house?  Do you see yourself living there in retirement?  Can you age safely in that house?  If not, then it's time to think about your next move.  IF a recession hits (and I know you shouldn't try to time the market!!), you might be able to score something more appropriate for your later years.  How can you better position yourself for that?  

This is just not a consideration for me. I don't know if our genes are different, or if we just don't let these concerns influence us in my family. My mother is still in the family house I grew up in at 95, living alone. My father died at 96, after a very short illness. They never considered moving to another house. I don't even know what age safely means - if you are climbing up and downs the stairs daily - I think you are keeping in shape! My mother does use a walker now, and I do worry, but she will not consider moving!

In terms of retiring here, I just don't know. I had planned on that when I bought it. As a potentially multi-generational house, or pass on to kids when they had kids. Neither seems interest in that however, so now I don't know! I could golden girl it, there are 5 bedrooms. So - could get at least 2 rommates comfortably. But honestly I just don't know!

I live in a 94 year old Cape with a steep roof line.  The stairs to my second floor are nearly vertical, LOL.  We very easily could turn the rarely-used living room into a first floor master (there is a full bath on the first floor already) and likely will do so IF we stay.  I don't want to chance falling down the stairs, breaking a hip, and spending the rest of my years bed-ridden in a nursing home.  That would be a fate worse than falling down and laying at the base of the stairs for days with no way to call for help until death whisks me away.  So, asking if you can age safely is a fair question, IMHO.  YMMV.

[Rukh O'Rorke]

It's a fair question i guess, but it's just not something that is a consideration for me.

[Pants]

One thing I've been told by people from/close by Rukh's neighborhood is that you just never leave the neighborhood. Everyone who grows up there buys somewhere close, their kids grow up there, and their parents stay there, and there's very little movement in and out of those areas. There are some good reasons for that, but it's also very much a cultural thing (based on what I've been told.) Versus some other areas of the city where people are moving in and out all the time and there's huge turnover. 

A friend of mine lives near there (3rd generation in her family to do so) and is experiencing personal attacks from the alderman, who she also went to high school with, because nobody ever leaves. When I suggested she just... move... she acted like I suggested she take up puppy-murder as a hobby. 

All that to say, if Rukh has a house in a desirable part of this area that she can keep in decent repair, someone nearby will want it. And I also understand Rukh not wanting to let it go. 

And finally, I think Golden Girls-ing it up is an awesome idea, Rukh! 

[Rukh O'Rorke]

ok - so - I think I have clarity on step one anyway!

I am not putting the house up for sale in the planned future - rates are low, and values are up, so I am going to cash out the max I can in this environment.

I can further consider and debate how to apply that money in the future - including pulling a full phil and dropping it all in the stock market, lol! Then use that to pull from for future repairs and upgrades as needed - when the market is up, and not when it's down. That was just a joke, but now I'm thinking about it!!!

So - going to spend the weekend putting the place in order in anticipation of appraisal.

raeoflyte  - any suggestions for maxing appraisal?

[Rukh O'Rorke]

Aug 16, 2019 10:46:05 GMT -5 Pants said:

One thing I've been told by people from/close by Rukh's neighborhood is that you just never leave the neighborhood. Everyone who grows up there buys somewhere close, their kids grow up there, and their parents stay there, and there's very little movement in and out of those areas. There are some good reasons for that, but it's also very much a cultural thing (based on what I've been told.) Versus some other areas of the city where people are moving in and out all the time and there's huge turnover. 

A friend of mine lives near there (3rd generation in her family to do so) and is experiencing personal attacks from the alderman, who she also went to high school with, because nobody ever leaves. When I suggested she just... move... she acted like I suggested she take up puppy-murder as a hobby. 

All that to say, if Rukh has a house in a desirable part of this area that she can keep in decent repair, someone nearby will want it. And I also understand Rukh not wanting to let it go. 

And finally, I think Golden Girls-ing it up is an awesome idea, Rukh! 

whoa! 

[Pants]

Aug 16, 2019 10:51:23 GMT -5 Rukh O'Rorke said:

Aug 16, 2019 10:46:05 GMT -5 Pants said:

One thing I've been told by people from/close by Rukh's neighborhood is that you just never leave the neighborhood. Everyone who grows up there buys somewhere close, their kids grow up there, and their parents stay there, and there's very little movement in and out of those areas. There are some good reasons for that, but it's also very much a cultural thing (based on what I've been told.) Versus some other areas of the city where people are moving in and out all the time and there's huge turnover. 

A friend of mine lives near there (3rd generation in her family to do so) and is experiencing personal attacks from the alderman, who she also went to high school with, because nobody ever leaves. When I suggested she just... move... she acted like I suggested she take up puppy-murder as a hobby. 

All that to say, if Rukh has a house in a desirable part of this area that she can keep in decent repair, someone nearby will want it. And I also understand Rukh not wanting to let it go. 

And finally, I think Golden Girls-ing it up is an awesome idea, Rukh! 

whoa! 

Yuuuuuup.

[Rukh O'Rorke]

Thanks pants!!

I have been getting the sense that I live in a somewhat different world than where the posts are coming from. On the Nside of chicago, there really isn't any much of any SFHing for under 300k. wide lots are very rare, 25' is standards, my street has wide lots of 35', and I have 54.5'. Driveways are also very rare in chicago, and most lots can't even accommodate a side driveway.

Even sketchy neighborhoods are 200-300k for SFH. 

new construction is also relative rare. 

here is a gut rehab nearby

www.redfin.com/IL/Chicago/4125-N-Leamington-Ave-60641/home/13477571

ETA: noticed they are listing 2017 as the build date, but they never tore it down, used the existing footprint. Used to walk old Mr.Pup down that street on the daily, it was never without walls that I saw.

[Deleted]

You have a 5 bedroom 500K house on a 25' wide lot?  Yowser.  The house I grew up in was on a 25' wide lot, but it was tiny.

[Rukh O'Rorke]

Aug 16, 2019 11:06:46 GMT -5 minnesotapaintlady said:

You have a 5 bedroom 500K house on a 25' wide lot?  Yowser.  The house I grew up in was on a 25' wide lot, but it was tiny.

no - my lot is 54.5.


25' is standard in chicago, but my neighborhood tends to have a lot of 35' lots, most on my street are 35'.

[raeoflyte]

Aug 16, 2019 10:49:16 GMT -5 Rukh O'Rorke said:

ok - so - I think I have clarity on step one anyway!

I am not putting the house up for sale in the planned future - rates are low, and values are up, so I am going to cash out the max I can in this environment.

I can further consider and debate how to apply that money in the future - including pulling a full phil and dropping it all in the stock market, lol! Then use that to pull from for future repairs and upgrades as needed - when the market is up, and not when it's down. That was just a joke, but now I'm thinking about it!!!

So - going to spend the weekend putting the place in order in anticipation of appraisal.

raeoflyte   - any suggestions for maxing appraisal?

Truthfully, don't stress about it.  It's all about size and location.    We just refi'd and I of course can't take my own advice so spent the entire weekend cleaning (and decluttering!) and the appraiser was in and out in 10 minutes.  Got his measurements, took his pictures and value was just fine.  They're human, but just about everything that they use to get values is just cold hard #'s.  Outside of hoarders, the neatness of your house doesn't matter.  

Let the appraiser know what work you have done and when.  Your kitchen being newer can help.  

[Rukh O'Rorke]

so - now I am thinking I could have a minimum of 800-900k value if I do a gut rehab


lol - how much do those cost


but no, not doing that.

[Rukh O'Rorke]

Aug 16, 2019 11:15:58 GMT -5 raeoflyte said:

Aug 16, 2019 10:49:16 GMT -5 Rukh O'Rorke said:

ok - so - I think I have clarity on step one anyway!

I am not putting the house up for sale in the planned future - rates are low, and values are up, so I am going to cash out the max I can in this environment.

I can further consider and debate how to apply that money in the future - including pulling a full phil and dropping it all in the stock market, lol! Then use that to pull from for future repairs and upgrades as needed - when the market is up, and not when it's down. That was just a joke, but now I'm thinking about it!!!

So - going to spend the weekend putting the place in order in anticipation of appraisal.

raeoflyte   - any suggestions for maxing appraisal?

Truthfully, don't stress about it.  It's all about size and location.    We just refi'd and I of course can't take my own advice so spent the entire weekend cleaning (and decluttering!) and the appraiser was in and out in 10 minutes.  Got his measurements, took his pictures and value was just fine.  They're human, but just about everything that they use to get values is just cold hard #'s.  Outside of hoarders, the neatness of your house doesn't matter.  

Let the appraiser know what work you have done and when.  Your kitchen being newer can help.  

thanks! sounds good.

I always go nuts whenever anyone is coming over. Plumbers, cable installers, etc. My mom was always poopooing me on that score, but I am sure she does it too.

then when I got directTV about a decade ago - the installer was someone I used to work with!!!

So - yes, I will always spit spot and best foot forward on this!

In fact, I was planning on having the cable run differently for the directTV, through a vacant bedroom upstairs that was collecting unwanted clutter for a while, but when the installer was someone I knew, I didn't do it that way. Cuz clutter/messy. And he still talked to someone I dated from that company, so the cable went through the wall in the LR with the dish thing perched into the exterior house wall rather than on the deck area like I wanted. Cuz.....just cuz.....

[Rukh O'Rorke]

going food shopping, going to pick up a few lotto tickets, in case the universe does want me to do a gut rehab.....

you never know!

[resolution]

Since you have decided to do a cash out refi and put some money back into the house, I would encourage you to review each item and rank them by which will protect your home/prevent future damage. There is no need to do them all in one go, as some of them may need to be done right away while others may be able to wait until after you are in a better position with your other debts.
 
I will give you my uneducated opinion on it, but what matters is your analysis and prioritization.

Basement flooding -If your basement is flooding this is a good priority to prevent mold and potential damage to the foundation. However, would the flood remediation require you to partially finish the rest of the basement, or can you do something like a french drain that would be less expensive and save the basement finishing to later? Would doing both projects together save enough from the total expense to make it worth parting with that much money when other work also needs to be done?

Porches and decks - This seems to be something that should be done sooner rather than later, especially if you can salvage some of it by painting it to prevent the wood from rotting. If it is already rotting it could be a safety issue so it would still be high on the priority list.

Windows - The windows would probably save you a lot of money on heat, especially the large picture window.

Garage roof and rotting - Roof upkeep is important to prevent future damage. Is the rot from roof issues or is there also a drainage/flood remediation issue to look at in conjunction with the basement?

Tree Removal and broken fence - This sounds like a priority health/safety issue/.

Driveway - Is this something that could be addressed through resealing or is it already too far gone? If it is too far gone to reseal, is it something that can wait until some of the other projects like roof and flooding are addressed? Is it unsightly or is it a safety issue?

Lawn - This sounds like something that can be deferred until the urgent projects are done and you have funds available. 

Cosmetics - Can this be deferred?

[Rukh O'Rorke]

yep - I certainly plan to prioritize from most to least critical.

[Rukh O'Rorke]

Aug 15, 2019 18:44:28 GMT -5 Miss Tequila said:

I couldn’t sleep at night with that kind of debt. I would sell the house and take some stress off my finances. One thing I would do it $100k into the house.

The student loan situation isn't the most pleasant aspect of my life right now, but given that I am able to pay all bills, put 14k/yr into 401k, and usually have about 400 or so left over a month, there isn't a great deal of immediate stress about it. I could also tighten up quite a bit if need be, but I don't want to at the moment. I am still getting weekly housecleaning that is over 300/month (which I previously justified to do FT work and school, and then 2 jobs while I was teaching), but I won't think of eliminating that unless things were significantly less stable!

I am currently filing housekeeping under "cost of doing business".

In the event of loss of income, with 200+k equity currently, I could sell, pay everything off, and have about 100k to use while I figure it out.

If I do pull out that equity and do the work on the house, then the sudden-job-loss scenario becomes a little bit trickier. But despite the layoffs, I do think I have some immediate job security (in the near term anyway).

In the grand scheme of things, this is a really good position for me. I've led a very precarious life!!! Right now seems rock solid .

I finished my degree, DD finished her, DS is close to finishing, I can pay everything every month, save money, and never clean a toilet again.

Life is good!

[nidena]

Older roommates is becoming more and more common.  www.aarp.org/home-family/your-home/info-2018/boomers-roommates-trend-fd.html

[laterbloomer]

Aug 20, 2019 10:18:49 GMT -5 nidena said:

Older roommates is becoming more and more common.  www.aarp.org/home-family/your-home/info-2018/boomers-roommates-trend-fd.html

That's always been part of my retirement plan, it was part of my plan when I bought the house. I like it for both the idea of company and the financial benefits. My house is set up in such a way that we can all have our own space but have company when we want it too. It doesn't seem like such a new idea to me.

[Works4me]

Aug 20, 2019 10:28:10 GMT -5 laterbloomer said:

Aug 20, 2019 10:18:49 GMT -5 nidena said:

Older roommates is becoming more and more common.  www.aarp.org/home-family/your-home/info-2018/boomers-roommates-trend-fd.html

That's always been part of my retirement plan, it was part of my plan when I bought the house. I like it for both the idea of company and the financial benefits. My house is set up in such a way that we can all have our own space but have company when we want it too. It doesn't seem like such a new idea to me.

Sign me up!

[azucena]

I already have a friend picked out. She likes to cook. I don't mind cleaning. It's a match made in heaven.