Stretching to Buy a home

[Anonymous]

Anonymous wrote:Maybe you should consider moving away from Arlington? You could buy both of these for $975,000 or less (you could bid the second one down below $900,000) and be in the Bethesda-Chevy Chase HS district and walkable to Metro. A much, much better high school than anything you can find in Arlington and an easy commute to DC.

https://www.redfin.com/MD/Chevy-Chase/7411-Ridgewood-Ave-20815/home/10643922

https://www.redfin.com/MD/Chevy-Chase/4207-Stanford-St-20815/home/10642274

Before you knock the idea, I suggest taking a walk in that neighborhood. It's nicer and more charming than any neighborhood in Arlington at that price point, with better amenities nearby and better schools. You could make either of these houses shine with $300,000 or $350,000 and this budget would give you far more than enough to build an addition if needed.

We actually would prefer CCDC, but with higher income taxes its an effective $100k+ 30yr cost to live there, even with cheaper housing you come out paying as much or more.

Further we both work in Capital South so the commute from Arlington is much better

[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.

McLean is quite nice, but its not 5 or 10 minutes more driving from eastern Arlington, its like 5 to 10 minutes to the border of Arlington, and with EVERYONE driving now who knows.

[Anonymous]

Also, I never said anything about slumming. We both grew up in places were homes are like $80k, but we are just trying to find a solution that gives decent schools, commute, and a pleasant house to live in. There is no disparaging old homes, except that they seem to cost almost as much as a new home if you want layouts and function from this decade.

[Anonymous]

my suggestion is to buy something both and your partner are comfortable with. great if it's 1.6 or great if it's 1.2 with some upgrades needed. I agree that one shouldn't expect to do anything for this seemingly crazy number of over 1 million but that's the market we are in. for the most part i find the housing market to be priced fairly accurately. congrats on having such good problems to have

[Anonymous]

Anonymous wrote:Also, I never said anything about slumming. We both grew up in places were homes are like $80k, but we are just trying to find a solution that gives decent schools, commute, and a pleasant house to live in. There is no disparaging old homes, except that they seem to cost almost as much as a new home if you want layouts and function from this decade.

Something like that is easily had for like half your budget.

[Anonymous]

Anonymous wrote:

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.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:Also, I never said anything about slumming. We both grew up in places were homes are like $80k, but we are just trying to find a solution that gives decent schools, commute, and a pleasant house to live in. There is no disparaging old homes, except that they seem to cost almost as much as a new home if you want layouts and function from this decade.

Something like that is easily had for like half your budget.

Please show me these 4 bedroom $800k homes!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also, I never said anything about slumming. We both grew up in places were homes are like $80k, but we are just trying to find a solution that gives decent schools, commute, and a pleasant house to live in. There is no disparaging old homes, except that they seem to cost almost as much as a new home if you want layouts and function from this decade.

Something like that is easily had for like half your budget.

Please show me these 4 bedroom $800k homes!!

Why? You can look just outside the beltway on Zillow in VA and find homes like that in decent school districts. Decent commute? Yes. Decent schools? Yes. Pleasant house? Yes.

Or maybe that actually ISN'T what the OP wants.

They actually want an easy commute compared to the average, which is like 45 mins (<20 mins), the BEST rated schools, and a brand new McCraftsman.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Also, I never said anything about slumming. We both grew up in places were homes are like $80k, but we are just trying to find a solution that gives decent schools, commute, and a pleasant house to live in. There is no disparaging old homes, except that they seem to cost almost as much as a new home if you want layouts and function from this decade.

Something like that is easily had for like half your budget.

Please show me these 4 bedroom $800k homes!!

Why? You can look just outside the beltway on Zillow in VA and find homes like that in decent school districts. Decent commute? Yes. Decent schools? Yes. Pleasant house? Yes.

Or maybe that actually ISN'T what the OP wants.

They actually want an easy commute compared to the average, which is like 45 mins (<20 mins), the BEST rated schools, and a brand new McCraftsman.

Our current commute from Arlington is 30 minutes, how in the world is outside beltway 45?

We don’t need best schools, Arlington is hardly blue ribbon, Vienna is likely better schools honestly, we just need decent schools.

Again, we don’t need brand new, but a recent open and very functional kitchen, and looking at a $1.25M house with $200k+ renovations vs $1.6M move in ready we are leaning to the newer (but hardly new, 10 year old is fine, systems will still have a decade of life in them)

[Anonymous]

I regularly commute into foggy bottom from braddock near beltway. Easy less 40 mins no express lanes.

[Anonymous]

Anonymous wrote:I regularly commute into foggy bottom from braddock near beltway. Easy less 40 mins no express lanes.

We are going to Capital South. The other side of the district.

[Anonymous]

I commute from Lanley/McLean to Foggy Bottom through GW Parkway. 20 min, no brainer.

Going through Arlington is more traffic than going from outside it. Or maybe OP want to live near a Metro? Schools are not decent in either Ballston or Clarendon.

[Anonymous]

Anonymous wrote:I commute from Lanley/McLean to Foggy Bottom through GW Parkway. 20 min, no brainer.

Going through Arlington is more traffic than going from outside it. Or maybe OP want to live near a Metro? Schools are not decent in either Ballston or Clarendon.

Yup. The streets in Arlington are a pain for commuting. Jamming much of the further distance from a place like McLean down a highway/parkway makes up at least some time.

[Anonymous]

OP, do you have any college savings for the three kids?

Put some of that 600k for them.

[Anonymous]

https://www.zillow.com/homedetails/1618-N-Danville-St-Arlington-VA-22201/12078827_zpid/

1.26 you end up with such a crap in Arlington, with crap school... Seriously, ?
OP is not exaggerating in budgeting 200K+ for renovation... Even with 200K, I doubt anything decent/spacious can come out of it... Arlington is not for normal family, look beyond!