So my wife found a dream house she just has to have (who am I kidding, I love it too). In order to make it work in short order I need to raise some extra capital really quick. I just updated my Brickfolio to check the current values on the collection and need to make a decision on the best way to liquidate the inventory. So basically I need to turn sealed sets into cash in less than 30 days. How would you do it?

Some basics: 

Current inventory is valued at $55,000

All of the sets are sealed.  (We sell some sealed sets on Amazon now and have a small BrickLink parts business on the side)

The sets run the gamut from battle packs up to Modulars. (We were buying sets mostly to part out or hold for retirement)

All sets are from 2013 or newer, no old rare high $ sets.

 

Would you put it all on Amazon, price it at the buy box price and move it?

Would you post collection pics and lists on Craigslist and see if you could save some of the fees?

Would you try to sell the whole collection to someone at a substantial discount (saves time and hassle)

All of the above?

 

I'm open to any and all advice.  I plan on getting back into buying sets again next year, and I hate the thought of selling newer sets close to my buy in price, but this is our "20 year" dream house and if I need to liquidate now to make it happen, I can replace all of it in time.

Thanks in advance for your ideas and input!

Alternatively, take a line of credit now, start selling immediately, and pay off the line of credit as you sell. You will be paying a few months worth of interest, so you'll take a bit of a hit, but you might not be needing the LoC long.

I wouldn't suggest this. I just finished a refi and the first thing they tell you is to stop using credit and don't open new lines of credit. It can severely affect how the bank looks at your loan and the rates and discounts you are offered. If you open too much credit you're seen as a risk.

9 hours ago, legopocalypse said:

You'd be better off taking a 20k-30k loss on the 55k value then borrowing an additional 55k from your lender. That would cost you around 100k over the 30 years with interest.

Total interest for a $55k loan for 30 yrs is $36,697 at current rate

Try to do a 15 yrs fix rate, you will be surprise your saving vs 30 yrs

Edited August 29, 20169 yr by LegoEdison

yes the interest rate I used was 4%, (just in case they weren't able to get it in the 3's) which brings it to around 100k but if under that then the 91k with interest sounds right

Here are some concrete numbers that I've pulled out of my butt but should give an idea of what you'll need to do in order for this strategy (liquidating your LEGO) to be effective. To sell a large lot like that quickly, what's the general consensus on the discount that will need to be applied? 20%-30%? I'm not sure if @diablo2112 would be willing to share the discount he gave to sell his lot quickly, but maybe just a rough estimate would suffice. He sold his collection pretty quickly, but what he was selling was also only a third of your value.

Let's assume a fictional mortgage amount of $200,000 (the end number doesn't much matter). And go through two selling scenarios... Selling your sets in bulk... One closer to the 20% discount and the other to the 30% discount.

ROUND 1 - NO SELLING OF LEGO

Mortgage $200,000, Interest 3% Monthly, 25 Years

YEARLY PAYMENTS: $11,381.07
MONTHLY PAYMENTS: $948.42
TOTAL PAYMENTS: $284,526.79
TOTAL INTEREST PAID: $84,526.79

ROUND 2 - SOLD ALL LEGO FOR $45,000 or approx 18.2% off total value

Mortgage $155,000, Interest 3% Monthly, 25 Years

YEARLY PAYMENTS: $8820.33
MONTHLY PAYMENTS: $735.03
TOTAL PAYMENTS: $220,508.26
TOTAL INTEREST PAID: $65,508.26

Investment Sold At $45,000
Total Loss $10,000
Total Savings On Mortgage Over 25 Years: $19,018.53
Effective Savings (mortgage savings - loss on value of sets): $9,018.53
Monthly Payments Are This Much Cheaper: $213.39

ROUND 3 - SOLD ALL LEGO FOR $40,000 or approx 27.3% off total value

Mortgage $160,000, Interest 3% Monthly, 25 Years

YEARLY PAYMENTS: $9104.86
MONTHLY PAYMENTS: $758.74
TOTAL PAYMENTS: $227,621.43
TOTAL INTEREST PAID: $67,621.43

Investment Sold At $40,000
Total Loss $15,000
Total Savings On Mortgage Over 25 Years: $16,905.36
Effective Savings (mortgage savings - loss on value of sets): $1,905.36
Monthly Payments Are This Much Cheaper: $189.68

My Conclusion ... I wouldn't liquidate your assets unless you can come close to that 20% discount.

Intangibles:

1. Your Buy-In: Of course we don't know your original buy-in so maybe the 55k is already 20-30% above your original investment and you're potentially breaking even. 
2. What the Bank Will Give You: If you need to sell some in order to get a loan, by all means this may be a good strategy. Reducing your debt load is never a bad idea.
3. What You are Comfortable Paying: Some people only have so much tolerance for debt... And only so much money each month for the usual payments. Selling your LEGO will yield decent (not fantastic IMO) savings each month on your mortgage payments.

Important Note - I used a calculator that does monthly payments. Couldn't quickly find one that does bi-weekly... To improve your savings, I always recommend people use bi-weekly payments for their loan/mortgage repayments if offered by the bank. The interest savings and reduction in overall months you're paying down debt are substantial!!

(To the OP - I'm not assuming you haven't done this... I'm putting this out there for anyone who is reading your post and has never had a mortgage and is truly curious why opinions on this strategy and whether it may or may not work have been varied.)

Thanks for all the legwork and scenarios @gregpj !

I listed/sold an ~$25k collection at 55% of the brickpicker portfolio price at time of sale.  Just a data point, FYI.  My circumstance was a bit unique, and I'm most appreciative of the support I recieved here.  

I listed/sold an ~$25k collection at 55% of the brickpicker portfolio price at time of sale.  Just a data point, FYI.  My circumstance was a bit unique, and I'm most appreciative of the support I recieved here.  

Thanks for sharing... You moved the lot uber quick too.

Really... It boils down to need vs what's in your collection. If you have 300 Exo Suits, good luck!