Heres my scenerio:

Glenda ownes a home valued around $700k. glenda lives in a bad market area and doesn't exspect to sell quickly (yesterday!). Glenda is self employed and currently does not have her work running. Glenda has $100k in liquid cash. Glenda wishes to move to tucson, az and then a few yrs later move near eugene oregan.

I (daughter of glenda) suggested that glenda get either an annuity or mutual fund for IMMEDIATE income. *IF* Glenda were able to get a mortgage of 50-70% of her homes value (for the sake of numbers lets say she could get $500k) and use that chunk to invest in one of the above, thereby making her a monthly income that could pay her monthly mortgage, give her a much more verifiable income, and give her some time to get her business up and running again. As I mentioned Glenda would also like (maybe i should stress NEEDS) to move even though her home hasn't sold. Glenda should with only minimal work be able to buy a good (what she wants) home around tucson for $150k. Therefore she would need to get another $50k mortgage. I would roughly estimate that her 2 monthly mortgages would be about $3300. glenda is a simplton though and only NEEDS internet, cell phones and insurance on vehicles ($100/ SIX months). the only other cost would be electricity but hopefully well water and no trash cost. I also think she has about 2 yrs worth of meat so food cost would be minimal as well but lets say $100/month. So total living cost would be around/under $4000 and that includes her monthly mortgage payments.

Could glenda do this? Is it even possible to get an income stream from this situation? Is there some other option available?

If you live in a bad market area and don't expect to sell quickly for 700k, then it isn't worth 700k. Why not just try to sell at 500k (or an attractive selling price) if she absolutely needs to leave. Cash out, buy the cheaper home, and bank the rest. If you are a motivated seller, someone will bite, you just have to be willing to take a lower price.

... and 2 YEARS of meat? Holy Cow!

ceobeaver said:If you live in a bad market area and don't expect to sell quickly for 700k, then it isn't worth 700k. Why not just try to sell at 500k (or an attractive selling price) if she absolutely needs to leave. Cash out, buy the cheaper home, and bank the rest. If you are a motivated seller, someone will bite, you just have to be willing to take a lower price. I agree. If she can get $500-600K out of her house and move to an area with a lower cost of living, she will be doing very well.

I'm not a big fan of homeownership when you are not settled with a job/life so I'd further suggest wait to figure things out before she buys another house.

RedCelicaGT said:mmmm...2 year old meat.

it gets recycled....its all freeze packaged etc....its not bad.

xerty said:danielleh said:I suggested that glenda get either an annuity or mutual fund for IMMEDIATE income. *IF* Glenda were able to get a mortgage of 50-70% of her homes value (for the sake of numbers lets say she could get $500k) and use that chunk to invest in one of the above, thereby making her a monthly income that could pay her monthly mortgage, etc.
The problem with taking out a mortgage and investing it for "current income" is that you're basically better than your investment will make more than your mortgage interest rate. Betting on stocks can be risky, now especially so. If you really just need cashflow to live on, why not get a simple HELOC and right checks against your home's equity until you can sell the place? You'll be paying interest anyway and this avoids the riskiness of investing the home loan.Keeping a house in a state that you are not living in is also a bet on housing prices.

I've known people who semi-retire, rent out their house while traveling, only to come back to the unpleasant reality that the tenants were doing bad things (in this case in norcal -- a grow house!).
Personally, I think the risks, hassle, and costs of trying to deal with a home you own in a different part of the country is not worth the reward.

I'd tell glenda to go find a swamp and start kissing frogs. Then the fantasy life of a princess can be hers.

BTW, how can I profit off this deal you post?

danielleh said:whats a HELOC??

Home Equity Line Of Credit
Most banks and/or credit unions offer them. It is kind of like a credit card against the equity in your home. The one we have at WAMU has a debit card attached, so you can use the card just like any other, and you get checks also. Mabey that would be a good option for her. We have one of these set up on every home we own as there is usually no fees to open one. We never use them, but if a good deal comes avail, we have ready cash whenever we feel like it.

Edited to add: Most HELOCs also come with a fixed rate option. If she needs a lump sum of cash right up front, she could always take that and lock it in at a fixed rate and have the rest as needed.