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I'm considering building an apartment on my property for my daughter and son-in-law to
live in until they can purchase a home. They'll pay rent while they're living there. And my two
options I think that are good for me is a HELOC, or I can do an auto loan on a vehicle that's paid
off, probably looking at about $50,000 on the HELOC, and can probably get about $40,000 on the
car. I do have the cash on hand, but I think a loan would probably be a better idea. I'm just
curious if there's any pros or cons one way or the other. Well, there's all cons, all of them.
Why would it be a good idea to do the title loan or the HELOC?
Well, because if I used cash on hand, I'd not have any cash on hand anymore,
and I've got a ton of equity in my home. And the only thing I owe on is my home as far as
in debt with anything. I don't know. Maybe it's not a good idea. That's what I'm curious about.
Well, if it's a true title loan, I mean, it's like a payday lending. It's like 25% to 300%
interest. You could lose the car. I mean, the repayment terms are terrible.
Horrible.
You get a payback in 30 days. You're talking about taking a loan out against your car
that's paid for? Well, this is through the bank, and it's basically-
Your car is collateral, though.
Yeah, the car is collateral. I'd rather lose a car than a house, though.
What's so urgent about this? Why can't they just get a normal apartment? Why
do you have to build an apartment for them to live in? Tell us more.
Yeah, well, both of them work ministry, and they're coming out of that.
And so they're not financially set to do that. The apartment would be an asset
to my current situation. I had considered doing it before because about two years ago,
my father became ill, all of a sudden had to come live with us. We just bought an RV and
let him live in the RV for a time. And so it just kind of put on the radar,
maybe we should have something like that available.
But what's the long-term plan for them? It feels like we're just
sort of temporarily subsidizing their lifestyle because they're not making good incomes.
So if they're going to be in ministry long-term,
they got to figure out how to put food on the table and cover rent.
No, I agree with you on that. And so I'm just wondering if I could help with that.
Well, here's the thing. I just don't think you can afford it.
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I just don't think you can afford it. I'm always, the last call, the lady wanted to be
like wildly generous. So we love generosity here. Hear me say that. But if you have to put your home
up and your vehicle up for collateral, and you're still paying off a mortgage yourself,
you simply can't afford to do so. You're cutting off your nose to spite your face at that point.
It's putting you in a horrible situation and it's putting them in a bad situation
because if this goes south in any way, you have a lot on the line that you can lose.
Sure. Yeah.
There's just too much risk here. If you want to bless them with a one-time gift,
you can do that. You can write them a check and maybe that covers a certain number of
months of rent for them. But again, I would try to help them actually become independent long-term
because otherwise now they need you. Now they're codependent instead of independent.
Ministry's tough because you don't make a lot of money. It's why we call it ministry.
But they need to figure out a way, either it's bivocational, which a lot of people in ministry,
it's what they do. They have another job that actually pays the bills and they do ministry
with their free time. I think helping them craft a plan is so much more helpful than
anything you could do financially for them at this point.
That's helpful insight. It certainly gives me a perspective to mull over and think about.
That was my objective in calling to find out, am I missing something? Is there
red flags that I'm just not seeing? I appreciate your input with all that.
Absolutely. You're trying to do just a nice, good thing in a bad way. Then you're trying to
justify it by saying, well, I'm also building an asset for me on the side. I think that's
sort of clouding the judgment here because you're looking at it as an investment. But if you have to
go into debt for it and put your car or home at risk, which is what's happening with either of
these loans, it's a bad idea. If it hurts to part with that much cash because you'll be cash poor,
then it's also a bad idea. I think it's a good gut check to say, if I paid cash for this,
would it give me some pause and anxiety? Then the truth is we just can't afford it right now.
Not that you never can do something super generous.
Yeah. It's something to aspire to possibly. Hopefully you'll think long and hard about that,
but please hear George and I say, we would not do this. By the way, if you don't do this,
it doesn't make you a bad person. It doesn't make you a person who doesn't support ministry.
It just makes you a person who is a financially responsible adult.
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