Stretching to Buy a home

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are aiming to stay east of Glebe Rd (for school zoning and commute), need 4 bedrooms up stairs for 3 kids, want a decent kitchen because we cook as a family all the time and would love to not be bumping into each other nonstop, and a decent yard. And not a busy road. We have looked for over a year, and there is a doughnut hole in pricing, lots of older homes needing new kitchens and baths for $1.2-$1.3 and then nothing until $1.5M (which is a new home without a yard that PP referred to) and then $1.6M for a package of a decent home (and by decent I don't need new, I'm happy with 10 years old which is still very new but won't need updates). Our current rental is from the 90s, and all the cabinets are literally falling apart, the bathroom floors have layers and layers of grout an cracked tiles. I know an older home will need updates.

For the older homes I'm budgeting $200k because we will want to put laundry upstairs, redo the 50s bathrooms, and probably need to reconfigure and expand the kitchen (either in addition or into existing space in the house). And I'm sure there will be $20k of random work like old water heater and roof and what not from deferred maintenance.

If you can point me to recent sales or a current house that meets these goals for $1.2M. But its not like we are looking for Corinthian leather or something.

You will not be slumming it if your home is older than 10 years old, it has laundry in the basement, a small yard, or a dated kitchen or bathroom. Unless you have unlimited funds, you cannot have it all. Forty million people have filed or unemployment and you are complaining about not being able to find a $1.3 million home that meets your needs.

Agree with immediate PP. OP all of your wants are understandable but they are wants, not needs. The kitchen isn't a big deal if you're planning a reno, so there's no reason to put it on the checklist up front. Placement of laundry is a not a big deal, if you're redoing all the bathrooms you can move it upstairs at that time. My guess is 4 bedrooms upstairs is the real killer - you're essentially looking for 5+ bedroom houses with that requirement. Depending on ages of the kids I'd rather they share a room until one can be on a different level than spend an extra $300k, but it takes all kinds.

Make them share rooms. This is an easy fix that is probably good for the kids.

That’s fine when the kids are young, but we have a mix of ages and genders that really doesn’t work long term. And they have all 3 shared a bedroom for the last 6 years in our rental, so we wanted to give them some space finally after these MONTHS of togetherness.

Wait, are your kids young or not? If they're too old to share bedrooms then they're old enough that it's not necessary they all be on the same floor. If they're young enough that you need them all on the same floor with you, then they're young enough to share bedrooms.

You're getting a yard, a whole house, probably a finished basement with a rec room/play space - you are giving them much more space than an apartment. They're absolutely going to see it as a huge improvement unless you put it in their heads that they're still slumming it in a $1.5M house just because they have bunk beds for a couple of years.

There is no age under 18 I sending my kid to sleep in the basement when we are two flights up.

That is not the only option. There are houses with first floor master suites, or bedrooms on the second and third floors. Listen, if you just want to spend every last dollar you have saved outside of retirement then swing for the fences. But don't pretend your hand was forced and it's impossible to get what you need for less. You did a really good job saving money for a long time, but now you've flipped the switch from frugality to "I deserve the very best because of my past frugality." Be careful you don't undo all your hard work in one emotional decision.

[Anonymous]

Anonymous wrote:Ignore current pandemic, this is far enough away to not need to consider.

We have a big down payment of $640k, which is all of our cash on hand. Healthy TSPs of about $800k.

We are both SES so make around $400k HHI

It seems like we could afford a $1.65M house, using that big down payment to bring down our monthly payment. Taxes would be a bit high but we are looking in Arlington so taxes are relatively low anyways.

I am floored to even think about spending this much, but to keep our constraints of commute and school we end up looking at $1.25M homes that need a bunch of renovation (new kitchen and bath, who knows what else, easily $250k or more on a 80 year old house) or just getting a newer home at $1.65M and not having to do any renovation.

Am I missing something? I hate spending this much, but we have lived with our kids in an apartment for all these years to save up this down payment and finally with pandemic we need to get a SFH but not kill ourselves with a commute (we won’t be teleworking 100% in our roles, guaranteed).

Plunking down ALL of your cash on hand would make me very nervous. IMO you need 6 months of your dual nets in reserves PLUS another minimum $25k or so for household emergencies (water heater breaks, car is totaled, what have you). Then put the rest of cash on hand down as your down payment and negotiate a mortgage at 2.5 to 3 (eeck, high) times of gross.

Technically the cash that you are moving to the down payment moves from an investment in the stock market to an investment in real estate. You will not be diversified at all so it behooves you to make a good choice in location and features to maximize return. As in everything your goal is to buy low and sell high. Use an experienced real estate agent who will guide you to areas that will have the best opportunity for appreciation.

After 2 years you may want to get a home equity line of credit so you have additional cash available if you need it. The trick will be to NOT use it so you don't have to pay your mortgage and pay back the LOC at the same time. That would be a real cash flow crunch.

[Anonymous]

The only way I would do this would be to buy a teardown and build myself so that I would net 15-20% instant equity. Otherwise get a cheaper home.

[Anonymous]

Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

[Anonymous]

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

LOL, basic needs... so many out of touch people.

[Anonymous]

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

[Anonymous]

Hi OP,

Part of the problem is the Houzz and HGTV effect. For millenia people lived in older homes and made do. Now we all have to have shiny and new.

I'd consider buy the house. Do the deferred water heater etc.
Let the teens be teens. Save more money.

I'd remodel after the teens move to college. It will be a lot less stress on the family. If Larlo needs $100 for something you will have it and not be stressed.

So, buy a house, let the kids be comfy in it. Save more money. Remodel when the kids move out for college.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

I would call the above linked house luxury.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ignore current pandemic, this is far enough away to not need to consider.

We have a big down payment of $640k, which is all of our cash on hand. Healthy TSPs of about $800k.

We are both SES so make around $400k HHI

It seems like we could afford a $1.65M house, using that big down payment to bring down our monthly payment. Taxes would be a bit high but we are looking in Arlington so taxes are relatively low anyways.

I am floored to even think about spending this much, but to keep our constraints of commute and school we end up looking at $1.25M homes that need a bunch of renovation (new kitchen and bath, who knows what else, easily $250k or more on a 80 year old house) or just getting a newer home at $1.65M and not having to do any renovation.

Am I missing something? I hate spending this much, but we have lived with our kids in an apartment for all these years to save up this down payment and finally with pandemic we need to get a SFH but not kill ourselves with a commute (we won’t be teleworking 100% in our roles, guaranteed).

Plunking down ALL of your cash on hand would make me very nervous. IMO you need 6 months of your dual nets in reserves PLUS another minimum $25k or so for household emergencies (water heater breaks, car is totaled, what have you). Then put the rest of cash on hand down as your down payment and negotiate a mortgage at 2.5 to 3 (eeck, high) times of gross.

Technically the cash that you are moving to the down payment moves from an investment in the stock market to an investment in real estate. You will not be diversified at all so it behooves you to make a good choice in location and features to maximize return. As in everything your goal is to buy low and sell high. Use an experienced real estate agent who will guide you to areas that will have the best opportunity for appreciation.

After 2 years you may want to get a home equity line of credit so you have additional cash available if you need it. The trick will be to NOT use it so you don't have to pay your mortgage and pay back the LOC at the same time. That would be a real cash flow crunch.

I'm a big fan of buying less house than you afford. The interest on a $1M loan if paid over 30 years is $600K. Plan to sell it in 10 years? Don't worry. You'll only pay $300K. If you want to be a slave to your job and the bank, go for it. The interest rate will be higher on a non conforming loan.

If I were you, I'd keep $100K-150K cash, find a house that costs $1 million and put down enough to get the balance to the conforming loan limit of $510K. With your income you'd be on easy street.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

Seriously. They obviously drag themselves through the streets with all of their possessions in their arms. What else can you do when you have 3 kids and less than 1.6 million for a home.

[Anonymous]

If I had nearly $700K in cash, I would buy a $700K house and have no mortgage. But that's just me.

[Anonymous]

You will not be slumming it if your home is older than 10 years old, it has laundry in the basement, a small yard, or a dated kitchen or bathroom. Unless you have unlimited funds, you cannot have it all. Forty million people have filed or unemployment and you are complaining about not being able to find a $1.3 million home that meets your needs.

Agree with immediate PP. OP all of your wants are understandable but they are wants, not needs. The kitchen isn't a big deal if you're planning a reno, so there's no reason to put it on the checklist up front. Placement of laundry is a not a big deal, if you're redoing all the bathrooms you can move it upstairs at that time. My guess is 4 bedrooms upstairs is the real killer - you're essentially looking for 5+ bedroom houses with that requirement. Depending on ages of the kids I'd rather they share a room until one can be on a different level than spend an extra $300k, but it takes all kinds.

Make them share rooms. This is an easy fix that is probably good for the kids.

That’s fine when the kids are young, but we have a mix of ages and genders that really doesn’t work long term. And they have all 3 shared a bedroom for the last 6 years in our rental, so we wanted to give them some space finally after these MONTHS of togetherness.

Your kids are fine now. All of them will be even better when none of them are sharing with two other kids. One will share with one, and one will not have to share. It will have improved for all. And they will have a million+ dollar home to sprawl in. This is a huge improvement all around. That said, I am not sure why I am taking the time to convince a millionaire not to unnecessarily spend hundreds of thousands that they really want to spend. It is not like you are going to otherwise use those hundreds of thousands to help the community. Do you, OP! Try to spread some of the reno work to small businesses!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

I would call the above linked house luxury.

Is it? It's just a normal house in a normal neighborhood that just checked all OP's points, except Arlington... If you want same thing in Arlington, you need perhaps 200k+. McLean is actually a much more down to earth area, just requires about 5-10 more minutes of driving.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

Seriously. They obviously drag themselves through the streets with all of their possessions in their arms. What else can you do when you have 3 kids and less than 1.6 million for a home.

Well now, you can find a home but it may not have running water or a foundation.

Plus, you may be stuck living in Vienna, how much would that hurt that people think you shop at Wawa.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Hard to get what OP want in Arlington for 1.6. And honestly, what OP want is very normal, not really 'wants', just basic needs for a family of 5 with two busy working parents.

OP, you could consider McLean. It's a bit further, but still 20 min drive. You can get really decent thing within your budget. Such as this recently sold:

https://www.redfin.com/VA/McLean/6849-Strata-St-22101/home/9476258

How do think the vast majority of people who live in this area without $400K of income live?

I would call the above linked house luxury.

Is it? It's just a normal house in a normal neighborhood that just checked all OP's points, except Arlington... If you want same thing in Arlington, you need perhaps 200k+. McLean is actually a much more down to earth area, just requires about 5-10 more minutes of driving.

Stop trolling. That house is almost 6,000 square feet. It is not normal anywhere.