Taking Equity out of Home to Go on Guided Hunts

[WCB]

SEND IT!

 

[TaperPin]

After thinking about it longer than I should have, and contemplating the outfitters I’ve known and are related to, I’d say they are as reliable as an established residential construction contractor. Guess how many people prepay for a house or remodel years in advance to lock in a price? None.

The financial decision is an easy one to pencil out based on the cost of capital and expected inflation rates - finance 201 class walked us through the calculations. A period of high inflation after the pent up demand of a global pandemic, would seem to make relying on these a poor choice for the future three years, but that’s secondary.

Very little discussion of risk and the fallacy of getting better service by paying in advance. Ask any attorney specializing in contracts or construction and ask how smart it is paying in advance, any of ‘em. It’s done regularly, and to mitigate the risk in construction there is a completion bond - guarantees if the job goes south there’s protection for the person putting the money up.

I think it’s a cool goal and hopefully you keep us in the loop as the hunts come and go.

 

[RdRdrFan]

After thinking about it longer than I should have, and contemplating the outfitters I’ve known and are related to, I’d say they are as reliable as an established residential construction contractor. Guess how many people prepay for a house or remodel years in advance to lock in a price? None.

The financial decision is an easy one to pencil out based on the cost of capital and expected inflation rates - finance 201 class walked us through the calculations. A period of high inflation after the pent up demand of a global pandemic, would seem to make relying on these a poor choice for the future three years, but that’s secondary.

Very little discussion of risk and the fallacy of getting better service by paying in advance. Ask any attorney specializing in contracts or construction and ask how smart it is paying in advance, any of ‘em. It’s done regularly, and to mitigate the risk in construction there is a completion bond - guarantees if the job goes south there’s protection for the person putting the money up.

I think it’s a cool goal and hopefully you keep us in the loop as the hunts come and go.

Don’t know the answer but I want to ask a question. Have you ever booked and gone through the process of going on one of these hunts? Because what you are saying isn’t how it works.

You put a deposit down. Then a few months out from the hunt you pay the balance.

How he obtains the money to go on the hunt doesn’t change how he actually pays the outfitter for the hunt. It’s no different than if he had millions in a savings account. The process is the same.

Is the process financially risky for the hunter? Flawed? Always to the benefit of the outfitter? Yes, on all accounts. But unless you want to solely rely on cancellation hunts then that is the way you have to do it.

He’s talking about booking the hunts and completing them at an earlier time frame. Not booking and taking them in 10-12 years.

 

[Mojave]

Cancellation hunts are a hell of a deal. You need to be caller number one with money in your hand when they are posted. I have been caller number 3 or 4 multiple times.

The last time was August of 2022 for pronghorns 300 miles from my house in Northern New Mexico on private land for $1500 a hunt. I was caller number 3. Didn't get to go.

Sheep, bear and moose hunts are more money, so they should be harder to sell.

Elk and deer cancellations are usually just leftover hunts that didn't sell and the outfitter drops the price by $1000-500.

In Africa there exist a thing called a mop up hunts, but they are usually hotter than hell in September and October, often can be sucessful. Often not. A buddy killed a leopared, sable and some other game for $15,000 last year.

 

[WCB]

Normally not one to comment as I lean towards "you do you". But you did throw this out for all. Some sage advice here from the others.

Why not save up for couple years and do the least expensive of them first (Dall). Doesn't have to be $70k right off the bat. Talk to outfitters, maybe find a cancel hunt to shave some costs. Stay in shape and be ready at moments notice. Then decide if taking the plunge on 3 remaining worth it. As someone else stated, just because its guided doesn't mean it's guaranteed. BTW - ever hunted or considered mountain goat yet?

I have an idea that Dalls are going to see a massive jump in the next 2-3yrs and will pass Desert sheep. At least for a respectable outfitter. Hell at Sheep Show a couple MT Goat hunts jumped 25%+ in a year

 

[TaperPin]

Don’t know the answer but I want to ask a question. Have you ever booked and gone through the process of going on one of these hunts? Because what you are saying isn’t how it works.

You put a deposit down. Then a few months out from the hunt you pay the balance.

How he obtains the money to go on the hunt doesn’t change how he actually pays the outfitter for the hunt. It’s no different than if he had millions in a savings account. The process is the same.

Is the process financially risky for the hunter? Flawed? Always to the benefit of the outfitter? Yes, on all accounts. But unless you want to solely rely on cancellation hunts then that is the way you have to do it.

He’s talking about booking the hunts and completing them at an earlier time frame. Not booking and taking them in 10-12 years.

If an outfitter is not expecting full payment to lock in a price three years from now, that’s not so bad.

My assumption was a deposit only gets you in the que and whatever price is the going rate the year of the hunt is what you pay.

 

[cbeard64]

Deposit traditionally locks in the price. But that is changing with many outfits these days. I believe in the near future things are likely to change and it will only get you in the line. Which may be all the more reason not to wait.
Hunt prices usually have a built-in increase if booked more than a year out anyway, but until pretty recently they have not been the big price increases we are seeing now.

I booked with a super reputable outfitter for a BC caribou/moose this year. Booked back in 2021. I put a 25% deposit down per the outfitter’s standard policy. When I read the contract carefully it said that it took 50% down to guarantee the hunt at the contract price. I’m sure everything would have been fine but I sent a check for another 25% as soon as I read that.

 

[MattB]

Sell your house, move into your parent’s basement, and go for it.

Financing those hunts by leveraging your residence and borrowing all the funds upfront at today’s rates is a patently dumb idea. All it takes is losing your job or a serious injury so you can’t service the debt and your future life will look very, very different.

 

[MattB]

Deposit traditionally locks in the price. But that is changing with many outfits these days.

It sounds like those days are generally out the window for sheep. Spoke with a friend in Reno this past weekend. He is booked into 2028 but my understanding is that he is only locking in prices a year out.

 

[Mule3006Elk]

Some guys have all the fun!

But dang! I don't have a large enough sac to attempt that one.

 

[Afhunter1]

Take equity loan for 500k buy rentals that cash flow 50k plus annually. Go on hunt every year for 10 years and then sell off rentals and pocket equity you built.

 

[MntHunter]

Sell your house, move into your parent’s basement, and go for it.

Financing those hunts by leveraging your residence and borrowing all the funds upfront at today’s rates is a patently dumb idea. All it takes is losing your job or a serious injury so you can’t service the debt and your future life will look very, very different.

The gentlemen said his house is worth 1.5M. I'm not sure he will need to move into his parents house anytime soon.

 

[WRO]

Take equity loan for 500k buy rentals that cash flow 50k plus annually. Go on hunt every year for 10 years and then sell off rentals and pocket equity you built.

That’s not doable in many markets, we’re at 5 to 7 cap at best.


Sent from my iPhone using Tapatalk

 

[thinhorn_AK]

Seems like a terrible idea. I guess I don’t believe in borrowing money for recreation. For things like boats, snowmobiles, bikes etc I save up and pay cash. The only bill I want to pay each month is my mortgage and my credit card.

Borrowing money for recreation is something poor people do.

But it’s your life, you only YOLO once bro.

 

[RdRdrFan]

Seems like a terrible idea. I guess I don’t believe in borrowing money for recreation. For things like boats, snowmobiles, bikes etc I save up and pay cash. The only bill I want to pay each month is my mortgage and my credit card.

Borrowing money for recreation is something poor people do.

But it’s your life, you only YOLO once bro.

You do realize that since you have a mortgage and you presumably spend money on recreation (those “boats, snowmobiles, bikes, etc”)…..you are doing the exact same thing as the OP.

If you don’t put 100% of that “recreation” money towards paying down the principal balance on your mortgage then you have zero room to judge the OP.

 

[WannaBeRambo]

You know the old saying, sheep hunting requires a young man's body and an old man's wallet. I'm wanting to go on all 4 of the north american sheep hunts, as well as a few other mountain hunts while I am still physically able. I have cash flow, but not enough to pay $70K+ at a time for a hunt. My house is paid for and I could take $300K or so out of it, get a mortgage going on todays rates, then refinance in a few years once things go back down. If you look at how much hunt costs have skyrocketed over the last three years, I figure I'll be saving money to go ahead and book them now vs over the next 10 - 15 years. In the meantime, I'll enjoy the tax benefits of lowering my taxable income due to the mortgage interest. Heading to sheep show this week and right now this is my plan

Thoughts?

You asked… Horrible idea.

You risk your home if you can’t pay it back. Affects your entire family, not just you.
Your ability to pay this off may be good, but not slam dunk.

Keep in mind A significant number of people retire years before they planned to due to medical conditions that arise as they age (them or family member) or they get laid off and next job is much lower wage.

Business volatility and vulnerability to disruption has never been as high. Not just economic, but weather, and technology disruption.(Artificial intelligence)

I WILL give you three BETTER ways to do this:
1) Become the next Steve Rinella, do social media side gig and assuming you cover hunting that $70k hunt is deductible business expense. Of course you have to make at least $70,001 for that to work.
2) Upgrade your job. No way should you do discretionary activities on credit. Needs to come out of cash flow. Saving for it is a form of cash flow management.
3) google F.I.R.E. (Including periods) TL;DR— some software developers saw due to age discrimination they would one day be let go at peak of earnings. Generally would be downhill from there in their career. So they went “extreme cheap” mode saving 50-80% of their salary. They do this 4-10 years, living like a mizer. A million in the bank is about $40,000 annual interest, so they get a few million dollars saved and when they hit their number, they retire by 40. More to it than this, of course.

My way though, you EARN your hunt. May change your life too.

 

[Ecampbell25]

This is a terrible idea. I was 100% debit free at age 34… thank you Dave Ramsey… it took way too much hard work and discipline for me to throw it all way to go on a sheep hunt.

What happens if the rates don’t come down and you can’t refinance to a lower rate?

I wanted to hunt sheep so I moved to Idaho. Drew a sheep tag my fifth year and hunted my Rocky Mountain sheep tag in the frank church for 20 days because I didn’t have a mortgage!

Found some small sheep and passed on them.

How are you going to feel if you don’t get to shoot a sheep on one of these hunts you’re paying a stupid amount of money for.

I ate my sheep tag in the Frank bc I didn’t find the ram I was looking for. It was the best hunt of my life. Dreaming of drawing it again. Which I will.

Fast forward I decided to move my family up to Alaska this past year. I will be able to hunt dall sheep OTC as a resident next August.

I also think there is much more satisfaction figuring it all out on my own. Not showing up and expecting it to be a slam dunk.

Good luck with your decision…

 

[thinhorn_AK]

You do realize that since you have a mortgage and you presumably spend money on recreation (those “boats, snowmobiles, bikes, etc”)…..you are doing the exact same thing as the OP.

If you don’t put 100% of that “recreation” money towards paying down the principal balance on your mortgage then you have zero room to judge the OP.

My boats, cars, snow machines, education are all paid off. My mortgage is on a 2.1% rate and will be paid in full in 3 years.

Also I never judged the OP, just stated an opinion and made it clear that I believe it’s his life and his choice.

stop being so sensitive.

 

[WannaBeRambo]

You do realize that since you have a mortgage and you presumably spend money on recreation (those “boats, snowmobiles, bikes, etc”)…..you are doing the exact same thing as the OP.

If you don’t put 100% of that “recreation” money towards paying down the principal balance on your mortgage then you have zero room to judge the OP.

Not quite. Loan on boat (toy), the toy is the collateral. They repo the toy.

Loan on home the home is collateral. if you screw the pooch when it’s time to pay it back, you become a tenant or end up with lots of unplanned expenses.

 

[thinhorn_AK]

Not quite. Loan on boat (toy), the toy is the collateral. They repo the toy.

Loan on home the home is collateral. if you screw the pooch when it’s time to pay it back, you become a tenant or end up with lots of unplanned expenses.

What do they take when you can’t pay back the 60k you borrowed to go sheep hunting?