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Started By
Message
Need help with a lump sum
Posted on 7/13/18 at 9:39 am
Posted on 7/13/18 at 9:39 am
I am selling a property on Monday and will have $310K. It was $220K originally, but I paid it off over the 6 years and it was my first primary residence so I will not be taxed on capital gains.
My current mortgage is 400K at 4% over 30 years, so I don't feel like it would be smart to put any towards that.
I have a commercial property that I still owe 490K on and it has a 4.85% rate, but it is adjustable every three years and it will re-adjust higher in June, however, I am not allowed to make any early principal payments until then. My thoughts are that it would be wise to put this money towards that mortgage next June but I need to park this money somewhere before then for 11 months. Any suggestions? Or should I be looking at something completely different?
My current mortgage is 400K at 4% over 30 years, so I don't feel like it would be smart to put any towards that.
I have a commercial property that I still owe 490K on and it has a 4.85% rate, but it is adjustable every three years and it will re-adjust higher in June, however, I am not allowed to make any early principal payments until then. My thoughts are that it would be wise to put this money towards that mortgage next June but I need to park this money somewhere before then for 11 months. Any suggestions? Or should I be looking at something completely different?
8
Posted on 7/13/18 at 9:42 am to jsquardjj
CD, high yield savings account.
Posted on 7/13/18 at 9:45 am to jsquardjj
No one can give you advice without knowing your full financial picture.
If you're dead set on using it to pay off your commercial property property and are looking to park it somewhere then a high yield savings account should do the trick.
If you're dead set on using it to pay off your commercial property property and are looking to park it somewhere then a high yield savings account should do the trick.
This post was edited on 7/13/18 at 9:46 am
Posted on 7/13/18 at 10:36 am to jsquardjj
If the commercial property is cash flowing well and is a sound investment, why not look for more rentals to buy with the money?
Posted on 7/13/18 at 4:36 pm to jsquardjj
Put in High yield saving acct and pay down Commercial property next year.
If you don't have a cash flow problem and commercial property isn't a burden, look at buying vacation property. Put cash down on condo in Fla., keep it rented out year round. pay off in a hand full of years.
EDIT: just saw where you had a vacation place.
What do you do?
If you don't have a cash flow problem and commercial property isn't a burden, look at buying vacation property. Put cash down on condo in Fla., keep it rented out year round. pay off in a hand full of years.
EDIT: just saw where you had a vacation place.
quote:
I have 200k between my sep and Roth, and then another 25k in my child’s 529. Im 30
quote:
o between those two plus my home, I have 1.65 in real estate with about a million of that still being mortgages
What do you do?
This post was edited on 7/13/18 at 4:54 pm
Posted on 7/13/18 at 5:35 pm to jsquardjj
quote:
it was my first primary residence so I will not be taxed on capital gains.
The reason you aren't subject to capital gains tax is that your gain was $90k, which is under the $250k exclusion ($500k for married couples).
quote:
My current mortgage is 400K at 4% over 30 years, so I don't feel like it would be smart to put any towards that.
Assuming you're itemizing, that's probably right.
quote:
I have a commercial property that I still owe 490K on
Do you own it as a sole proprietor or did you incorporate? If the latter make sure you dot your i's and cross your t's and don't comingle funds.
quote:
I need to park this money somewhere before then for 11 months.
I'd look at CD's. You need to set aside money for a specific purpose for a specific duration, that's exactly what a CD or other short-term note is for.
But I'd imagine you already know this since you're a real estate magnate.
Posted on 7/13/18 at 6:26 pm to jsquardjj
Everyone is overthinking this.
The mortgage on the commercial is adjustable.
Park the money in savings and pay that down when allowable.
The mortgage on the commercial is adjustable.
Park the money in savings and pay that down when allowable.
Posted on 7/13/18 at 10:09 pm to jsquardjj
leverage up while debt is still easy and rates are low....lock in long term rates while you can....don't prepay if you are cash flowing.
use the money to cherry pick some new investment opportunities.....commercial real estate or branch out.
you are ahead of 99.8% of adults 31 and younger....keep plugging away.
look at some timber real estate...you could get a nice piece of acreage that yields timber with that cash and some loans.
use the money to cherry pick some new investment opportunities.....commercial real estate or branch out.
you are ahead of 99.8% of adults 31 and younger....keep plugging away.
look at some timber real estate...you could get a nice piece of acreage that yields timber with that cash and some loans.
Posted on 7/13/18 at 11:18 pm to jsquardjj
Thanks, there has been a lot of good advice in here and I do appreciate it.
To answer a few more questions, I am a consultant for small hotels and b&bs. My job paid only commissions based on my sales so i made a killing for a long time by working hard, but it has slowed the past few years with the competition from Airbnb and the general ease of using hotel websites. I will probably have to look in other directions in the future, which might explain my hesitation to use this cash to not pay down debt.
The cd option is where I was leaning, it’s just a littler strange because I need it to be an 11 month and not 12 month cd which is not offered for very good rates and I hate to see I chunk of change like this earn only 2%.
To answer a few more questions, I am a consultant for small hotels and b&bs. My job paid only commissions based on my sales so i made a killing for a long time by working hard, but it has slowed the past few years with the competition from Airbnb and the general ease of using hotel websites. I will probably have to look in other directions in the future, which might explain my hesitation to use this cash to not pay down debt.
The cd option is where I was leaning, it’s just a littler strange because I need it to be an 11 month and not 12 month cd which is not offered for very good rates and I hate to see I chunk of change like this earn only 2%.
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