Author Topic: Building a strong foundation, figuratively and literally  (Read 946 times)

Obscure_shadow

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Building a strong foundation, figuratively and literally
« on: July 25, 2017, 03:45:59 AM »
Greetings everyone! My first post here!

I'm not going to get crazy on the details for the numbers for this first go around, perhaps I will add more detail later but I'm just starting to get things on track doing a lot of research so I have a way to go still and I'm glad to have found mmm and all of you!


Anyways so a little about me and my situation:

I'm 29 and my partner is 27. I grew up in a family that could best be discribed as "white trash" extremely poor, 9 kids, many step dads, drugs, domestic violence, religious extremism and mountians of debt. I got out on my own when I was 16 and vowed that I was going to never have to look back. So far I have done pretty well for myself in comparison, and did a lot better than the folks ever expected... anyways.  My girlfriends family is quite the opposite... loving, supportive and decently wealthy. It's almost cliche, haha.

We have been together about 7 years now and about 2 years ago we bought a house together. We got a good deal because the house needed what we thought was about 20k in foundation work. Her dad said to make an offer minus the cost of repairs and he would do the repair work for us (he owned a remodeling business) so we took it. He never made good on that promise and things have gotten worse (he has since given up the remodeling buisness for landlording, cant say i blame him) so now we have to get a professionals help (which we probably should have done in the first place) anyways while im not too bad at construction, foundation work is beond the scope of my abilities. More on the house and repair numbers later...

Another problem we have is that we share a car. Now i know the mmm stance on biking, and we live 13 miles from work, which i wouldn't mind biking but its highway or fast single lane roads and around here people are unessesarily hostile towards bikers so I wouldn't feel safe at all on a bike that often (i have been cussed at and had trash thrown at me and run off the road in the areas around work where there are actual bike lanes so id hate to see what would happen in the hood between here and there) maybe im being a wuss... but I digress. Im locked into an fha loan so even if the house was sellable in its current shape im legally obligated to maintain it as my primary residency for a few more years. So the lady would like me to get a seperate car (which i have avoided for a while because its another expense that i dont want and the inconvenience doesnt bother me as much as it does her though im beginning to wander if the math might work out better for me to have one)

So as far as work goes, we both work at a pair of vegetarian  restaraunts which my lady bought into (5% ) they are doing a lot of business but they are not exactly turning a profit, mostly just barely staying above water. If they start doing better she can take a lot more pay but until then we both make about the same, and I'm a bit concerned about the future of that situation but im a bit more inclined to find a new line of work. Also to hedge my bets with a healthy savings.

Anyways here's some vauge numbers but perhaps y'all will have enough to go on for the time being I can get more exact as i work out more details.

Gross income:

25k each or thereabout
2 roomates at $450 each/mo

Taxes : filed separately

Savings & investments :
Simple ira @ 5% through work with 3% match : $1067 (I need to change some things here i had a $75 loss over the last year)
Cash : ~ $5k

Car : paid in full, '07 prius, 150k miles, needs some minor repairs but decently low maintenance

House : worth $167k owe $109k  27 years left on 30yr fha @3.5% we were paying an extra 100 on the principle until recently (borrowed so cheap i wanted to invest more instead but have only saved not yet started any real investments)

Nessesary foundation repair quote: $47,000 not including re finishing the walls and bathroom after the repair, but i can do that stuff decently cheaply.

Monthly bills usually end up being about $700-800 or so for my portion including mortgage, cell, car ins, cell, net, utilities and misc groceries and the odd tool here and there, i could shave down a little and plan to do so but i live pretty lean in general.

I think that about sums it up.

So basically we are looking at borrowing against the equity to get the repairs done, not sure how to start that process, or if i should refinance into a 15yr or do a equity line of credit? Should i sink my savings into paying off the house sooner (even though the lady is most lilely not going to meet my commitment to paying it off sooner?) Should i sink it into a vanguard investment instead so my safety net is gaining interest?
Should i buy a cheap high mpg car with part of that money?

Anyways 25k isnt much, even if we can sink 25k a year it will be a little over 4 years to pay off the current principle and then another 2 years to pay off the cost of the repairs and 6 years later then can start investing and maybe in 20 years be close to retirement.... hmmm 56 doesnt seem so early and that also seems like a lot of sacrifice....

Anyways thoughts ? Advice?

czr

  • 5 O'Clock Shadow
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Re: Building a strong foundation, figuratively and literally
« Reply #1 on: July 26, 2017, 12:14:05 PM »
You really should do a detailed income and expense breakdown because with your roommates, you should have more free cash flow. The house is $167k as it sits? How much longer can you forgo the repair and what are the risks? I'd get multiple quotes from different contractors. I don't know if you will be able to refinance if you need a new foundation as the house may not pass inspection. Maybe, get a home equity line of credit and to me a new foundation is an emergency and priority numero uno so no paying extra on the mortgage or retirement savings. Put it in a savings account to keep it liquid. You are pretty much house poor but the good thing is it is generating some income.

RetiredAt63

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Re: Building a strong foundation, figuratively and literally
« Reply #2 on: September 04, 2017, 08:00:14 AM »
You might want to read WhiteTrashCash's Journal, he is in the same life circumstances as you and his story is inspirational.
The measure of civilization is how people treat one another.

http://forum.mrmoneymustache.com/meetups-and-social-events/ontario's-own-camp-mustache-2017/ - MEET US THERE!