Head Messed Up

debtman_3

Well here goes

Over the last 4 years I've been lurking around the mse boards & had my LB moment in September of 06 , & to say it's helped me is putting it mildly, first of all I'd like to thank all the board members for pointing me in the right direction allbeit without actually advising me directly but nonetheless through your questions & answers to each other, I am in a very desperate situation I'm 51 years old & am a self employed building contractor I have 98.000 in unsecured debt made up of 12 CCs & a loan, over the years (10ish) I foolishly at times had a spend now & pay later outlook however that accounts for about half that debt, the rest was accrued by subsidising earnings where I fell short when work was slow/non existent, my wife & I are hard workers we work every day & even on weekends on a regular basis in order to make ends meet, but after many years it has become obvious that working for customers just doesn't bring enough money to make ends meet, we never eat out or order takeaway we're non smokers & watch every penny & have taken advise from these boards & applied it in order to save every penny, I recently bought a house (Feb 06) for 151000 a semi I put down a deposit 10% on a self certified mortgage so 15.100 I just had a central heating system installed (there wasn't one in the house previously) I'm also putting in a new bathroom- kitchen- drive- doors-floors etc the house had not been improved for 26 years ( have I bored you yet) I've never defaulted on any loan but I now have only about 5.000 left in the bank and work is slow, I want to take out a secured loan about 40.000 on my new house, the reason for my insanity is I want to stop working for customers & to buy-fix-& sell on houses, I think it's the only way I can get my self out of this mess & I've been renovating homes for others for so long it's time I did it for myself, my estate agent said my house should be worth about 180.00 when I'm done, I'll soon have about 75% finshed in the next couple of weeks but really can't afford to wait until I'm done before applying for a loan as I may run out of money & start defaulting on my debts, which at this point in my life is the last thing I want to do, does anyone out there in mse land think it's possible for me to get a secured loan under my circumstances, especially as I just bought my house, anyway for those of you who have read through the whole of this thread Thank You & even if you can't really help me, well thanks anyway for helping me to get this off my chest, I'll look eagerly for any response hope to hear from you soon, but for now I'm off to work.

debtman_3

Sorry my Lb Moment was in 02

Rafter

debtman,

How is your secured loan going to help exactly?

Even if the estate agent is right, when you sell the property you aren't going to even make enough to repay your mortgage and secured loan and will still have almost £100k in unsecured debt.

I seriously think you need to go and talk to citizens advice or a debt charity about your options. As I see it, even if you can renovate two properties a year, you are still going to have difficulty clearing your debt before you retire.

Would it not be better to enter into some sort of debt plan or even consider bankrupcy? At least then you have a chance of relieving yourself of some of the debt and using some of the money you earn in the next decade to put towards your retirement?

Sorry not to be more positive - but getting yourself into more debt doesn't seem like a way out.

R.

debtman_3

Hello Rafter

Thanks for reading my post, & for thinking it through & responding, if I sold the house say 6-24 months from now it would pay for the mortgage & secured loan remember my mortgage amount is 135.000 thats after I had put down my original deposit of 15.000 if I sold it for 180.000 that would be enough to take care those loans, I would be able to turn over 3 houses in one year no sweat, 2nd year I'd be overlapping houses, in other words two at a time it's almost as easy to do 2 at a time as one at a time, I'd continue that way each year for the next few years & chuck every extra penny at the unsecured debt, I've often spent 7 days a week working so that's no problem, I figure if I'm this much in debt right now I might as well take another bash by getting the secured loan (if I qualify under my circumstances) & make a last stand so to speak, even if I knocked out 75% of what I owe that would put be back in control, it may all be wishful thinking but if I'm going to go down in flames by planning a bankruptcy now, I may as well give my plan a bash & if it doesn't work I'll go bankrupt in a year or so, I know it's not the right move to continue getting into further debt but at the same time I'm trying to do what I do best which is work hard, but the twist on it is I'd be working hard not to make my customers homes look good, but to work hard renovating houses for myself to make money from, one other thing is, & it may sound weird but I don't ever want retire, I'll work until I drop!! I really enjoy what I do, even when I have some down time I work around my house, so what do you think am I crazy or what?

Bestthingsinlifearefree

Hi Debtman,

I think you should get this thread posted in / moved to the debt free forum you will get a lot more advice there.

Its good that you are investigating the best options available to you, don't make any snap decisions, look at all the options.

Good luck in what is probably a stressful time at the moment.

I am sure there is a way forward.

jobbingmusician

Yes, I agree, you'll get loads of good advice on the very friendly DFW (debt free wannabe) board.

I can see it's a big decision, and it sounds as if you have done some pretty good thinking through. I know it's getting more difficult to make money out of property nowadays, but if you have the skills I should think it can still be done, especially if you are not too greedy and settle for a small margin on each house (which it sounds as if you are planning).

Good luck whatever you decide. And if you just want to help your situation by reducing your outgoings, the DFW and Old Style boards will both give you lots of good advice about ways you can do that

debtman_3

Btilaf

Thanks for that great idea, I hope someone reads your suggestion & moves it for me, as regards it being a stressful time you are so right it has kept me awake at night often, & I hope your right that there is a good way forward, & I'm doing my best to not make snap decisions :beer:

debtman_3

JobbingMusician

I'd love to know what your Title means, & I forgot about those boards you mentioned I'll look into them to see if I can glean something from them to add to all that the mrs & I already do to save money, also thanks for the good wishes, it's much appreciated :j

jobbingmusician

Lol my title just reflects the fact that I work as a (classical) musician sometimes in my spare time.....and that I'm the old fashioned sort of musician who plays several instruments

Debt_Free_Chick

Oh dear ..... it looks like your plan is to borrow your way out of debt. It won't work - never does.

You have a high-risk strategy that depends on getting the right house, in the right area, doing it up and then selling it at a profit. All the time you are doing up your own property, you are not earning money by doing your "normal job" - and you know that work is "slow".

You will be paying out more money on the materials you need to make improvements and with reduced income (as work is slow and you can't devote full time hours to it) your debt will surely increase.

Sounds like a disaster waiting to happen. You are relying on a "get rich quick scheme" to bail you out .........

Oh dear .....

debtman_3

Debt_Free_Chick

Thank you for you post, Even though it's true that picking the right house at the right price in the right neighborhood fixing it up & selling it for a profit,is a high risk strategy one thing I have on my side is that I've been a contractor for just over 21 years & have built/renovated houses for customers & developers alike, I know real estate, I don't see it as such a big leap to go from building for others to building for myself, all to often because of my experience in the construction field I'm the one turned to for advise when a buyer wants to know how much it will cost to renovate a house & if there is potential for a profit at the end of it, the risk is negligible when when looked at by a pro I.E. me, also it's precisely because work is either a feast or famine (because I'm left to advertising for work or depend on repeat customers for work) that I've decided to take the bull by the horns & control my own destiny I won't rest literally, until I generate work through networking the real estate industry, & I know the financial payoff is better than just working for a daily set amount, "get rich quick schemes" are for those looking for the easy way out while their eating bon bons watching late night tv, well that 'aint" me, I intend to put the sweat equity in for the long haul, if the "disaster" happens it's not going to happen because I took my eye off the ball, & I don't expect to be "bailed out" I'll be picking myself up by the short & curlies & moving forward, have a nice day :rolleyes2 :rolleyes2