Greetings!
My financial situation has recently changed and I'm looking for advice on what to do next. Here are the facts:
Between my full time job and freelance income I make about $115,000.
My partner made about the same until August, when his job was outsourced to India.
His insurance for him and his two full-time custodial kids is $550.00. That, other than food, is our main expense. I'm insured through my company.
We recently invested about $5000 in equipment for a new business venture that has so far made over $8000 (but partner still has no full time work... So we plan on just putting all profit into savings and living on my salary)
Our recently re-fi'd mortgage is $957.00 per month and we're looking to have that paid off within five years. The house is worth $350k and we owe $225k.
Our savings is $17,000 (it was well over $50k, but we used it to re-fi, and this is where we are now after saving since March)
I have a rental unit worth about $280,000. I paid $445,000 for it and put over $100K into it about seven years ago (I had planned on living there forever, but, well, things happened.)
The mortgage on the rental is $2085 per month, HOA is $200. I have put about $3000 into it for repairs this year alone.
My rent (top of market for the area) is $2000 per month.
No debt except the two mortgages. No car loan, student loans or anything.
I have about $50k in IRAs and 401ks.
Kids' school tuition is $12,000 a year, but that will drop to $6k next year as one heads on to High School.
My big worry is the rental. I lose money every month and have yet to see really any tax benefits from it (that I can tell.) No matter what I'm out $285 per month and that's when there aren't problems like roof repairs, tree trimming and other costly things. I don't think I can re-fi because it's so underwater.
I'm just not sure that I'm maximizing my money at this point and I feel saddled with this rental that if I walk away or sell it I will basically have just tossed hundreds of thousands down a hole with no return. Should I cash out IRAS to refi? Should I cash out IRAS to help boost our payoff at the house we live in and then throw everything extra at the rental??
Any ideas or advice? I'm in California, if that helps clear anything up.
Thanks SO much. I look forward to your responses.