So. Here’s the situation, and I’ll try to explain it as clearly as possible (the attempt will be made, anyway, and please tell me if it doesn’t make sense!) Many years ago, I was in a horrible accident as a young teenager and got a personal injury settlement (for, well, permanent injuries.) Half of it was a lump sum–and my financial advisor has told me that I’m one of the VERY few people he’s ever seen who had any amount as a lump sum and didn’t just blow through it all in a few years (or ten years. Or twenty years!) Most of the other half was basically set up as a regular structured settlement with small amounts every month.
However, there was also a third part. The best way I can describe it is that this was set up in the framework of a pension type of thing. I would get one lump sum at a certain time (many years later),and another lump sum ten years after that. The first lump sum is now set to be due in four years. So here’s what we have.
1.) Structured settlement every month, will last for life, but not a lot of money.
2.) Original lump sum, quite a bit of it is still there but with medical expenses to meet I don’t think I should count on it for a 20% down payment.
3.) Lump sum payout #1 in four years ($235,000)
4.) Lump sum payout #2 in 14 years ($475,000)
5.) None of it is/was/will be taxable.
But here’s the problem. I live in Portland (OR), and I’ve found the perfect neighborhood that hasn’t YET been taken over by yuppies. This means that housing prices aren’t bad at all right now, but they could easily explode into total insanity soon. PDX has to be one of the worst places in America for that right now; all of California is moving here and rents are often 2-5 times what they were less than five years ago. MANY neighborhoods have seen house prices doubling, tripling, and quadrupling in less than five years. Ardenwald has got to be one of the next neighborhoods to go-- it’s across a major street from a neighborhood that the same thing happened to in the past year (house prices and rent prices doubling in a year, and that is not an exaggeration.) We also have a MAX line that will open this fall about two blocks from my house.
Basically, I can see the writing on the wall. If I wait four years to buy, I would not be at all surprised to see prices two, three, four, or even five times what they are now (because this has happened in many of the close-in neighborhoods. I’ve seen it over and over again, and so have all of my friends. I am really not kidding. I personally know people who sold their houses for about $200,000, a developer renovated them, and they were next sold for $1.1 million.) BUT, if I can buy within about a year, I think I can beat the truly insane rise in prices. Because it really could happen where I live now.
So here’s the question. Would it be worth it to find a way to sell the first lump sum annuity (not the second one)? And what’s the best way to do it? Has anybody else done this? It’s a little unusual-- it’s not exactly the same as a “structured settlement”, because it was set up to be a lump sum payment at a particular time from the very start. It’s appreciated ever since then, and after about twenty-five years, it only has four years to go. You can never know exactly what will happen, but buying in, say, a year as opposed to four years could save literally hundreds of thousands of dollars on the price of a house. There were MUCH more dramatic price increases that actually happened in several central neighborhoods over the last five years. It’s not unrealistic at all that it could happen in my neighborhood (where I’m currently renting a house.)
Thoughts? Comments? Advice? Musings? And thanks for making it through this whole rambling thought process! 