Reply to I don’t understand how my neighbors are paying for their renovation

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[quote=Anonymous][quote=Anonymous]Yeah, yeah, I should mind my own business – but I still don’t get it.  They are in their mid-30s with three young kids. I obviously don’t know their exact salaries, but based on their jobs, I’d bet one earns about $90,000 and the other about $70,000.

Pre-renovation, the house was probably worth $900,000. And they’re now doing so much work that it’s almost like a new build (adding square footage, completely gutting the inside, adding a deck, etc.).  I don’t see how they’re spending any less than $500,000 on the renovation, and it’s probably more.

I don’t get how a family with three young kids making $160,000 a year can afford this. I guess the answer is family money, but is there really this much of it going around?  This is not even in Bethesda or some place like that.  I should add that it is the childhood home for one of them, so maybe they were gifted it by their parents – but still, are parents giving an extra $500,000+ cash on top of a paid-off $900,000 house (plus rent for a second place while the remodel is happening)??[/quote]

You answered your own question.
If I inherit a paid off $900k house needing renovation from my parents and my income is $160k, I would take a Heloc or construction loan to renovate the place. That’s how I would afford the renovation. Simple and easy. That’s not magic.

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