whole life vs selling house

[StealthRabbit]

look at all the angles, and time frame when you need the cash.

selling the income house may take some time, AND you may take a 30% hit on sales price being forced to sell (that would be ugly).

I would look to #1 a loan on the insurance and potentially cash it out and buy cheap term (get some diligent advice on this from someone who can evaluate the policy and your needs)

#2 I would get a loan on the rental house, rates are low...

#3 consider selling your 'primary' residence (tax free gain), and moving into rental. living in it 5 yrs will classify it as a 'primary' (requires 3 extra yrs, since it was income prop) then you can exclude your gain, but you would be liable for taxes on the depreciation, if you have taken any.

as Golf highlighted... NOW is a good time to sell Long term capital assets, as the current beneficial 15% LTCG tax is going to see sunset in 2009 (early) or 2010 (scheduled) then it will be 28% or more. Unfortunately, the desire to save taxes is going to hurt the investment property sales prices in 2009 and 2010.

I would tend to hang onto real estate that is paid off, or get cheap loans on it, as it might be your best inflation hedge.

[okaydorothy]

I was thinking of moving back in to the rental, but dh is against it ; maybe he will come around eventually.

We just ned cash for a short while. Its our low season with the business and once spring comes around, it will be ok.

Our primary home ; that is at 80% mortgage so we wouldnt get much cash out of it.

I was also thinking of mortgaging the rental.

Thank you all for your insight. It has been educating.

d

[Pilgrim21784]

Suggest you dump the life insurance (use term for any real LI needs, otherwise you are wasting money). Cash value LI is a uniformly bad idea. LI agents won't agree but trust me, term is the only LI that makes sense for 99% of the population.