Author Topic: Tuckpointing/Repointing cost ~$40,000. HELOC/Equity Loan/Liquidate FI/RE money?  (Read 1503 times)

Megatron

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My wife and I own a 2 flat brick building in the Midwest. it's owner occupied and we recently had about 4 different contractors come by to give us estimates on tuckpointing / repointing. A lot needs to be repaired. lintel replacement (20)... etc, the average estimate is about $40,000. We bought the place in a short sale 2 years ago. It's an old 1920s brick building and needs some TLC but it's ours and the wife loves it. It has 3 units, wife and I live in one.
We have about 25k-30k in 2 savings accounts that we've been using as Emergency Fund and a House Maintenance fund. It should've been more but last year we had to spend ~20k to completely rebuild the backporch of the building. It's not enough and we would need to liquidate some of our "fuck you" FI money in taxable accounts (vanguard/ stock portfolio). I know the basics of HELOC vs Home Equity Loan and I just wanted to poll the community to see what the best course of action or if anyone's been in similar situations. I just like the peace of mind of having a true EF if anything happens. Should we borrow or should we suck it up and pay from savings. Our current networth is about 430k and we gross 200k a year from full time jobs. Our monthly mortage payment (PITI) is $2750 and rental income is 2375. If we borrow, should we use a HELOC or a Home Equity Loan? If we borrow, I think we can pay back 40k within 2-3 years.
« Last Edit: July 13, 2016, 10:30:09 AM by Megatron »

Axecleaver

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You have high incomes, so consider working out a payment deal with the contractor. Most folks are willing to work with you if you can pay them at least half when the job is completed (cover their costs). In your spot, I might pitch them the idea of 10% down, 40% when the job is completed, and 10% (4k) a month for the next five months. Or, you could exhaust the EF and repay it over a period of time from your incomes, drawing on the taxable accounts if something comes up in the meantime.

If that doesn't fly, you can use a HELOC or LOC to pay it, just be sure you understand the origination costs. Some banks throw in junk fees at various steps in the process (like an annual subscription fee). It could be cheaper to liquidate some of your taxable holdings, especially if you can get some tax harvest-able losses as part of the sale.

Fishindude

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No contractor in his right mind is going to want to work out a payment plan.   He will want (and should be) paid immediately after completion so he can pay his bills and make payroll.
This is not a huge expense and you have high income.   Just do a short term loan or line of credit and pay it off as quickly as possible.

$40,000 Sounds like a lot of money, but when you consider that this building is near 100 years old and has probably had little if any work ever done to the exterior masonry, it's actually pretty good value.   A good tuck point & repair job should take care of you for a long time.

tooqk4u22

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HELOC would be perfect for this.  What I don't understand is paying it off over two to three years - $200k income with housing basically covere, what am I missing.  You should be saving $5k-10K/month easy. 

nottoscale

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Facade project manager/engineer here $40k for pointing and lintels? WTF? I work in NYC and can get pointing for 10$ per squarefoot.  Lintel replacement should be about $200 per liner foot. How large is your two flat? I just had my building done here in NYC for $40k. Brick 3 story building with 6 units. No lintels but needed a lot of brick replaced.

I think the contractors are taking you for a ride. Feel free to PM me for some help this seems insane and I deal with this everyday.