Should I keep the house

rts265

Phil Edwards status
Oct 19, 2007
6,190
1,307
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I really want to hang on to my house. Ill have to get a loan to buy out the co owner. Probably withdraw from my 401k. With todays prices I got a real deal in 2016. If I do this I guess my cost will be more in line with current prices. Would it be better to just sell and wait for market to come down? who knows if that crash will come. I’m about 1.5 mile from beach and don’t see getting in another place like this if I let it go. :shrug:
 

casa_mugrienta

Duke status
Apr 13, 2008
43,214
17,645
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Petak Island
I really want to hang on to my house. Ill have to get a loan to buy out the co owner. Probably withdraw from my 401k. With todays prices I got a real deal in 2016. If I do this I guess my cost will be more in line with current prices. Would it be better to just sell and wait for market to come down? who knows if that crash will come. I’m about 1.5 mile from beach and don’t see getting in another place like this if I let it go. :shrug:
In general I would want to avoid withdrawing from a 401K. Chances are you've already taken a big hit this year and more hits are likely coming in the near future.

A couple questions you should factor in -

Suppose prices were to drop 20% in the next downturn...how well would you be positioned to purchase in the area you desire?

Would you be paying more in rent or a monthly mortgage payment?

Also, considering the false security given by the recency bias of "stock market only goes up - and parabolically!" - how well is your 401K positioned at this point and how well would you be positioned if our stock market loses a decade - say early 2000s to 2013 style? Or looks like the rest of the world's stock markets for the next 20 years?

Screen Shot 2022-06-03 at 4.40.34 AM.png
 
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rts265

Phil Edwards status
Oct 19, 2007
6,190
1,307
113
In general I would want to avoid withdrawing from a 401K. Chances are you've already taken a big hit this year and more hits are likely coming in the near future.

A couple questions you should factor in -

Suppose prices were to drop 20% in the next downturn...how well would you be positioned to purchase in the area you desire?

Would you be paying more in rent or a monthly mortgage payment?

Also, considering the false security given by the recency bias of "stock market only goes up - and parabolically!" - how well is your 401K positioned at this point and how well would you be positioned if our stock market loses a decade - say early 2000s to 2013 style? Or looks like the rest of the world's stock markets for the next 20 years?

View attachment 130827
I’ve been sitting in mostly cash since 2020. Still think it would be hard to get into something at -20%
 

Autoprax

Duke status
Jan 24, 2011
68,237
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62
Vagina Point
I would do van life if I had a friend with a lot of property.

I would just park on the north pasture out of sight.

But I ain't got no friends.
 
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sdsrfr

Phil Edwards status
Jul 13, 2020
5,857
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San Diego
I would do van life if I had a friend with a lot of property.

I would just park on the north pasture out of sight.

But I ain't got no friends.
I know someone who did this with their own property.

rented the structure and lives in an RV parked on the opposite side of the property.
 
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ElOgro

Duke status
Dec 3, 2010
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Predicated by the outcome of child custody. Your divorce lawyer (get a female attorney) will know a good tax accountant. Gender, or lack there of, isn’t important for the tax attorney.
 

Mr Doof

Duke status
Jan 23, 2002
24,860
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San Francisco, CA
On one hand, 401K money takes time....as in, you can only put so much in per year (barring the catch-up provisions) and then you need time to leverage the tax free gains, so not a good idea to raid it. But if stock market were to fall, get out while the getting is good, but would probably take a tax hit.

On the other hand, property has been hedge when markets fall. I mean, you gotta live some place, and rent is paying someone else's mortage, so why not pay yourself? Besides, what have housing prices done for the last 20 yrs, on average?

Then there are the intangibles that only you get discern for yourself.

In the end, the math will probably pen out something like 60% makes sense to keep house. Will only get more certain if you take fewer variables into account, and even then....

All above only my opinion, you pay your money, you take your chances.

PS
Forgot to say: I would try to keep the residence.
 
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oeste858

Phil Edwards status
Sep 11, 2017
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San Diego, CA
Keep the house if you can. As you said, unlikely you could afford as close to beach in future. IMO, Demand for coastal CA property will continue to exceed limited supply, regardless of what the greater real estate market does in other parts of the state / nation. It will go up in value over time, and if it comes to it, you can always rent it out as an income property and rent somewhere cheaper for yourself.
 

feralseppo

Billy Hamilton status
Feb 28, 2006
1,469
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Withdrawing from your 401k will cause a massive hit with taxes and additional penalties. Maybe take a loan out at most if you know you can pay it back.
 
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