We Bought A Home!!!

It’s a fixer-upper but it has a lot of potential. I’m not sure if it feels like we were looking for a long time or not. Maybe it was because we were never seriously looking. It was always just one house that evening or a couple this weekend. But when we walked through Maiden, I really had to try to keep my mouth shut because I wanted to hear your excitement first. When that, “You know what, I actually REALLY like this house,” I was sure we were onto something. Just a little over a month later, IT’S OURS!

Now, we just have to lock down a general contractor to get this demo party started. Let’s face it, we’re not handy & we’d rather get it done right the first time around. Our best bet is to bring in a few contractors and get a handful of bids. We can go with the one who we feel the most trust, comfortability & professionalism with and sure pricing will play a factor in there somewhere haha!

Okay, let’s tie in personal finance. The monthly mortgage is two-thirds what we were currently “spending on housing.” (UPDATE for you readers: Somewhere along the line since the DEBT article, we decided we might want to buy a house so we slowed our roll on the paydown and started redirecting some of that capital into a “downpayment” fund – this reminds me there’s an article for an update on that coming in the future).

Anyway, reducing a third of the housing expense is not going to be realistic because we did buy a fixer-upper. Our plan with that remaining chunk will be to gradually pay down the rehab expense.

Speaking of rehab, the expenses that are sure to be incurred seem like the perfect opportunity for some travel hacking. Finding cards with 0% interest rate promos will be key. And while it’s still a bit up in the air as far as how long it will take to pay off the entire rehab, for sure we’ll be using the balance transfer hack to minimize our interest on the balance.

Lastly, let’s cover exit strategies. You never know what’s going to happen so the best thing you can do is have multiple options for what life may bring. Here are a few possible options:

  • This house could very will be our “forever home” (ugh, I hate that term). We’ll pay off the mortgage and then only have to worry about taxes & insurance at that point. We could pull a HELOC on the house and use the equity for other investment opportunities.
  • We could outgrow the house after another kid (or two LOL). If this were to be the case, we could rent the house out since the going rental rate for a similar house is ~$500-$750 more than our mortgage. Of course, this would also require us to be starting to save a little for the next down-payment so we won’t need to sell the house to buy the next one. It’s not a big deal; just a little planning ahead.
  • Alternatively, if we have been in the house for at least 2 years by the time we decide we’ve outgrown it, we could test the market to sell and take our profits tax-free (up to $500k) using the capital gains tax exemption.

For everyone else: Is your home an asset or a liability? It’s a popular debate. I’m in the camp of liability but as Krystine often says, “to each their own.” Think about your own exit strategies. Are you ready for the curveball(s) life might throw your way?

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