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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 12:02 pm to Oenophile Brah
Honestly, it makes me a little nervous and has me questioning if I am lopsided in my investments. (Too much real estate?)
The one I’m considering paying off is a commericial property, and I also have a vacation rental in another country that does well and is only borrowed at 3%. So between those two plus my home, I have 1.65 in real estate with about a million of that still being mortgages. The one in question is only about 1.5k month cash flow after paying the note/taxes/insurance and that would decrease next year with a higher rate.
I have 200k between my sep and Roth, and then another 25k in my child’s 529. Im 30
I know the retirement account is low, but I have certain limits each year and no matching 401k.
Sorry for all the info, I just feel like I’m hitting a wall in which direction to go with future investments and feel very unsure of myself.
The one I’m considering paying off is a commericial property, and I also have a vacation rental in another country that does well and is only borrowed at 3%. So between those two plus my home, I have 1.65 in real estate with about a million of that still being mortgages. The one in question is only about 1.5k month cash flow after paying the note/taxes/insurance and that would decrease next year with a higher rate.
I have 200k between my sep and Roth, and then another 25k in my child’s 529. Im 30
I know the retirement account is low, but I have certain limits each year and no matching 401k.
Sorry for all the info, I just feel like I’m hitting a wall in which direction to go with future investments and feel very unsure of myself.
Posted on 7/13/18 at 1:53 pm to jsquardjj
Is the commercial property something that you plan to keep until it's paid off, or at least longer term? If yes, are you at an LTV level that you could secure a fixed rate 10 year+/- commercial loan? I don't know what sort of loan terms you have now or what sort of relationship you have with your bank, but in this interest rate environment, that might be something you'd want to explore.
Posted on 7/13/18 at 3:49 pm to jsquardjj
quote:
I have 200k between my sep and Roth, and then another 25k in my child’s 529. Im 30 I know the retirement account is low, but I have certain limits each year and no matching 401k.
Ummmm.... That's not low. Not any of that is low.
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 5:15 pm to TheWiz
quote:Yeah, might be low for his personal goal, but thats nowhere near low. Hell, if he doesn't make another contribution, that'll be one million at age 55.
Ummmm.... That's not low. Not any of that is low.
Which obviously isn't an amount one should be comfortable with, but still that's way above average.
Posted on 7/13/18 at 5:34 pm to Oenophile Brah
710k in debt and some folks are suggesting he buy more property? Crazy! Pay down debt with the lump sum asap.
Posted on 7/13/18 at 5:34 pm to bstew3006
quote:
Put in High yield saving acct and pay down Commercial property next year.
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 5:54 pm to foshizzle
I have a similar circumstance occurring at the end of the month. I plan to use a portion of money in the next 24 months to purchase some land. I think I'm going with the AMEX High Yield Savings product. I don't really want the restrictions of a CD or the risk of investing.
Posted on 7/13/18 at 5:58 pm to bodsworth
quote:
710k in debt and some folks are suggesting he buy more property? Crazy! Pay down debt with the lump sum asap.
Without knowing how much this guy makes and other financial factors you have no idea if that's crazy or not.
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 6:38 pm to Mingo Was His NameO
quote:
Without knowing how much this guy makes and other financial factors you have no idea if that's crazy or not.
You aren't wrong, but given that OP has investments of this sort already I have to assume he has the basics sorted out.
Posted on 7/13/18 at 6:39 pm to beerman
quote:
I don't really want the restrictions of a CD
OP is already restricted by his chosen goals, so why not get a CD?
Posted on 7/13/18 at 6:47 pm to foshizzle
quote:
You aren't wrong, but given that OP has investments of this sort already I have to assume he has the basics sorted out.
I agree and that's my point. There may be no reason to pay down that debt or there may be every reason to pay down the debt, but we don't know. He came off the me as a debt is bad sky screamer.
Posted on 7/13/18 at 8:19 pm to Mingo Was His NameO
quote:
Without knowing how much this guy makes and other financial factors you have no idea if that's crazy or not.
Yeah based on the information OP has provided he is in a very good place financially and probably can dump some more money into RE.
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.
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