What do you do if the bottom falls out of your life? It has happened to millions of Americans over the last couple years. It is survivable but you have to have a plan. Many people go through life responding to the disasters that occur. It seemed that way in my life in 2008 as I watched the market collapse and my wife's retirement plan slowly crash right along with the market. She lost almost forty per cent of her plan. That was not fun, but it did not hurt us as bad as it could have. We had been planning on retiring for years. I had a heart attack in Jan 2004 and had to sell my truck and quit trucking. Fortunately we had been planning long before that and we just modified the plan. The money we got out of the truck paid off my bills from trucking. My wife fortunately had enough left when she got her cash settlement to pay off the rest of the bills and buy her a new car. That car will hopefully last us till checkout time. My car is an old beater, but it does what I need it to do. We still have a house payment for a couple of years but we had planned for that and it was in the budget.
The question is what do you do if unemployment falls on you without warning. The first thing to do is adapt and get a plan. Cut costs and figure how to stretch every dollar to the max. That starts with down sizing. Yard sales are the worst way to get rid of excess. Craigs List is a much better way, but you have to take the time to put together good adds. Where and how will you live if you lose your house. Many people do not know about tax sales, but that is a good way to get a house really, really cheap. You can often get one for less than a thousand dollars. The trick is to have the money at tax time. The best way I know to do that short of selling something is to take your tax return and put that money back till the tax sale and use it for that purpose. There is a catch though. You buy the house at the tax sale but the person who owned it has a year to redeem the house. If they do redeem it your mainly out for your time. You will get your money back with interest. As I said the catch you have to wait a year to move in. So if you get your tax return sometime between March and June you have to figure how to provide a place for you and your family to live for anywhere from eighteen to twenty months. If you use every trick in the system it can take the bank six to ten months to get you out of your present house. If you can you can make the payment right up till you move into the house you bought at tax sale. Why would you walk away from a house you can make the payment on. Well if you still have fifteen to eighteen years to go and and you are going to have a house that is worth thirty to forty percent less than you paid for it, why not. If it is nice and you like it go for it. However if you simply walk away and let the bank have it back they do not have many options. They can come after you for for the difference but you can fight that. The best argument in that situation is that you counted on their expertise and they ripped you off. The court will probably decide in your favor. Even if they force you into bankruptcy you can keep the house you are living in most of the time. That would be the one you bought at the tax sale with no payment. In the end you still get out of the debt and your now in a home with "NO PAYMENT." If you can not work it out to stay in your house at least you shortened your survival period. That takes your survival period down to eight to twelve months.
The goal is to get the house and survive the wait. Once you move in you have no payment except your property taxes and utilities. Then you can start fixing the house as you go and either make it a permanent home or you can plan the sale of the house to get you enough to live a year and then move into another tax sale house. Ideally you would buy a second house make it liveable and rent it to provide yourself some income. Doing this will be hard. If push comes to shove you can move to an area where there is some work till you can move in the house. You need to provide mowing and keep the lot neat till you can take possession of the property. That reduces the chance of vandalism.
If you decide to go this route to get a house with no payment you need to do your research before the tax sale. The county assessor will have a list of properties that may be sold at the tax sale. They will tell you how much is owed in taxes. That is your starting point. Pick several properties that fit your budget. Try to do it so you will have a few hundred left to get the utilities turned on. Once you get your list of houses try and find out if there are liens on the property. The liens will be released if you buy it, BUT it is a property that the bank or the one holding the lien may make a move to get the property. Again if you bid and get the property you will get your money back if they exercise their lien. However, that means you will be waiting another year and you do not want that. You find out about liens at the county recorders office. You can also find out who the actual owner is of the property. Once you have that information you can simply ask them if they intend to pay the taxes. Some will say yes just to keep people from bidding, You have to make your own judgment on that. If you find a property with no liens or minor liens ones up to a couple thousand dollars, they are usually by a contractor. If the owner has no intention of claiming the property you have found one to safely bid on. If the owner does not want the property try to make a deal with the lien holder to release the lien for part of the money. Now you have a property with no one going against you and you may well get the house.
How can this happen. Sometimes old people die with no Will and no heirs to leave the property to. They may have had repairs done and the contractor may simply want his money. The trick is the contractor may not know the house is available and just want his money. If you let him know it is available he may go for it. You can act like and tell them you have an interest in the house. The trick is you have to make sure they release the lien. If they do and there is no one to contest the or redeem the property you end up with a house. Sometimes a house will get into this situation because a person simply left the area and has no desire to move back to the area. You can determine this by simply contacting the owner and asking them. Often they will tell you if they are not going to redeem the house simply to get the tax collector to quit hounding them for the back taxes.
Hopefully you now can see why I say you need a plan and a budget. You need to get your self organized to get out from under the debt beast and be an property owner. One that actually owns the property. Then fix the property as you can afford it. "DO NOT GET A LOAN" it may be tempting but if you do you will end up right back where you were at. Many people do not know you can do this and therefore they do not do it.
The trick is find a modest house in a decent neighborhood and follow through with your plan. You will find some really nice homes at the tax sales. However those are usually the ones that have a loan against them that the bank will redeem to get part of their money back. Read all of my blogs on money and any other solid information you can get. If you have questions ask me and if I can answer your question I will. Thanks for reading and I hope this helped someone.