Advice on selling entire boxed set collection?

[labfreak7]

I think if you furnish a list to us on this site, you may be able to liquidate most of the sets- only caveat is that you would have to sell for less, and most likely take a loss, but that is your best bet. Selling on eBay / Amazon will take a long time, and a ton of work to pack and ship that many sets. If you sell the sets for cash, and in lots there are no fees and it is fast cash. I'm in NY, so it's a little far from Michigan, but I have traded and sold to bp'ers on this site. That or craigslist are your best bets. I knew of someone selling hundreds of model kits near me- a couple of guys from out of state came with a container truck and bought them all.

This is the big problem with large amounts tied up in Lego, liquidity.

 

 

Yes but Lego sells fast and well. It is one of the few collectibles that you can say that. At least for now....

[Alpinemaps]

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.

[LegoEdison]

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, 2016 by LegoEdison

[legopocalypse]

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

[gregpj]

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.)

[4cs]

Thanks for all the legwork and scenarios @gregpj !

[diablo2112]

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.  

[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.  

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!