Early Retirement Extreme Forums

I got my first paycheck!

$5800 - ($5800 * .0765 FICA) = $5,357 for May. No state taxes, and minimal federal tax for the year. So, to buy a used 250K house in a small western city, that's $250,000 / $5,357 = 46 months, or 3.9 years of work. More like 4.5 years cause of federal income taxes.

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$250K is a lot of money to save up. I wonder if it'd come out significantly cheaper to seriously consider buying a plot of land in that same small western city, and build a nice 2-bedroom, 1.5 bath house w/ a garage on the plot while living out of a trailer w/ internet. Put those tools in the other thread to good use, and avoid having to remodel/fix-up inevitable mistakes on a used house (while still paying $250K for the base house).

I'd probably find a good design online, secure a construction mortgage (or self-fund by saving), pay for the driveway, grading, foundation, framing, electrical, plumbing, HVAC, and fencing, and then do the flooring, roofing, siding, insulation, sheet rock, trim, paint, cabinetry, appliance research, interior decoration, deck, and landscaping myself. I could maybe figure out the electrical, plumbing, HVAC, and fencing, but the driveway, grading, framing, and foundation work seem pretty vital.

Slow down hun...this is a massive undertaking. Self build can work out cheaper, if you know what you're doing. It can also work out a lot more expensive if you don't. If you're planning on doing work yourself I suggest you learn on an easy refurb before doing anything more major. You can't just 'figure out' things such as electrics or plumbing, not if you want regulatory and mortgage approvability anyway.

Can't I just get the regulatory ppl to come take a look routinely, just like the contractors do it? Contractors aren't the brightest if you've interacted with any of them, I'm sure I can figure it out w/ research & YT, just like I did with complex car mechanics (where ppl also told me I couldn't do it, but now they're like "omg, you're so good at car mechanics, can you replace my SRS module/McPherson strut/fuel filter/transmission oil").

True tho, I'd imagine this process would take 5 years, w/ many spent in the trailer, and w/ tons of research.

TopHatFox wrote: ↑

Wed May 31, 2023 11:12 am

Can't I just get the regulatory ppl to come take a look routinely, just like the contractors do it?

Possibly but some jurisdictions may require licenced contractors, as might the mortgage company.

Interesting, you think small western city jurisdictions would require licensed contractors for that (like Grand Junction, CO, or Montrose, CO)? I guess that's why you can't build in blue cities, especially big ones -- they'll regulate the hell out of your build (beyond just regular safety inspections, which I agree are vital).

You can find fixer-upper houses for quite a bit less than 250k, maybe start with getting a bedroom, bathroom and kitchen into usable condition, then take as mich time as you want with the rest of it.

There are plenty of deals out there, but you need to go there and find places that fit your needs.

Here is a town that I liked and could have settled down in:

https://www.zillow.com/silver-city-nm/

There are some houses for under 150k that look livable.

Perhaps you could connect with others who have self built in the area and get some guidance from them ? Or speak to some local architects or designers who might give you some free advice on the local requirements?

@sky, that's not as intimidating an idea, it's essentially saying "someone else not me do the driveway, grading, foundation, framing, HVAC, electrical, and plumbing." Then I re-do everything else as needed/desired (flooring, roofing, siding, insulation, sheet rock, trim, paint, cabinetry, appliance research, interior decoration, deck, and landscaping myself), with an additional demolition step. Probably the biggest hurdle is finding a property that isn't from multiple decades ago. Sometimes the houses are like $160K for a house in a small city built in 1940. Like, even if I re-build all the finishes, the bones are still 100 years old.

@chenda, yeah, that'd be the way to do it. Find someone who just finished a build, and ask them the ppl they worked with, hang-ups they had, etc.

TopHatFox wrote: ↑

Wed May 31, 2023 11:21 am

I guess that's why you can't build in blue cities, especially big ones -- they'll regulate the hell out of your build (beyond just regular safety inspections, which I agree are vital).

Your freedom-to [listen to loud music after 10pm for example] basically ends where my freedom-from [having to listen to it] begins. This happens sooner and in stronger measures where people live close by each other. Roughly speaking it's not that cities regulate because they're blue. It's that cities are/turn blue as population density increases and higher densities mean more regulation. This holds both statistically, theoretically, and trend-wise. There will be very few exceptions to this. Increasing efficiency and complexity requires increasing regulation. This is why blue counties generate some 70% of GDP now. In practical terms, it will be very difficult to find a place that's both rich, unregulated, and doesn't cost a fortune.

Fair or unfair. It's just economic reality. You're looking at a trilemma of (rich, cheap, unregulated), pick any two but only two.

Of course working remotely, you can pick a place that's cheap and unregulated and still make good money. Your neighbors won't though.

I don't mind regulation, like don't make noise after 10 PM. Cool. Make your building up to fire code. Cool. Don't shoot, steal, or philander your neighbors. Great.

Requiring that only contractors can work/approve work on your house, or that you can't do your own car repairs on your own driveway? Unacceptable. Hopefully I can find a middle ground.

Yeah, the demographics of the city and neighborhood you live is super important for quality of life. I wouldn't want to live next to drug manufacturers or perpetual welfare recipients.

TopHatFox wrote: ↑

Wed May 31, 2023 12:27 pm

Requiring that only contractors can work on your house, or that you can't do your own car repairs on your own driveway? Unacceptable. Hopefully I can find a middle ground.

Laws are tricky that way. One might argue that a law is unnecessary because "Nobody would be stupid enough to ..." Unfortunately, there are a lot of stupid people around. Laws are a crude technology that sets the minimum standard of adulting that makes it possible for everybody to get along. Laws seem stupid, because a few humans really are that stupid and it only takes one rotten apple to spoil the barrel.

When we moved into our house there were several "homeowner's special" surprises left from the previous owner. Outlets with reversed polarity (it all works fine until someone gets zapped), plumbing repairs using cling film, ... I can assure you that there will be some clown doing car repair in their own driveway who concludes that dumping used motor oil down the sewer would be a convenient way to dispose of it. And this is why we can't have anything nice (like driveways next to a shared sewer system) without some kind of regulation or adult supervision or whatever it takes.

FWIW, most of these ordinances are really intended to prevent homeowners from stupid behavior that hurts other homeowners or future homeowners. They are substantially more lax when it comes to behavior where the homeowner only hurts themselves and their own house.

Makes sense, though if a homeowner wants to do work on their own house, they probably won't even tell the city, thereby defeating the law. Sounds to me like high-iq ppl suffering on behalf of the low-iq ppl. Perhaps an exception should be made that a homeowner can work on their house, as long as they get an inspector to make sure the work is up to code.

TopHatFox wrote: ↑

Wed May 31, 2023 12:27 pm

Requiring that only contractors can work/approve work on your house, or that you can't do your own car repairs on your own driveway? Unacceptable. Hopefully I can find a middle ground.

I don't think any local government in the United states requires that licensed contractors complete work. If work is done consistent with the local code, you should be fine. Many very competent individuals run into issues with self builds though, because they don't complete some element of their project consistent with local zoning or development regulations.

It is feasible that an insurance company or bank might require a licensed contractor, but if a local building inspector signs off on a permit that usually satisfies those entities.

The bigger problems with local regulations often stem from Homeowner Associations (HOAs) or Covenants, Conditions and Restrictions (CC & Rs) imposed by homeowners associations. These are private agreements entered into by a property owner, and many often conflate them with local government regulations (which they are not). Special purpose districts (water, sewer, fire, irrigation, mosquito control, cemetary, the list goes on...) can also add a layer of regulatory complexity.

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Building your own home could represent a really cool opportunity to develop skills and do something unique. It is also a huge, multi-year project that would create a lot of stress. It would limit your ability to excel as a young professional IMO, and would absorb almost all of your time outside of work to build a startup, make social connections, or pursue other opportunities.

Why are you so focused on buying/building a home THF? Have you done the math on the opportunity cost?

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ETA:

+1 to this:

jacob wrote: ↑

Wed May 31, 2023 12:43 pm

FWIW, most of these ordinances are really intended to prevent homeowners from stupid behavior that hurts other homeowners or future homeowners. They are substantially more lax when it comes to behavior where the homeowner only hurts themselves and their own house.

@THF - Unpermitted construction can have consequences for homeowners down the road during the sale of the property, or in case of a disaster like a fire.

@Western Red, I guess I could live in a room forever

TopHatFox wrote: ↑

Wed May 31, 2023 1:12 pm

@Western Red, I guess I could live in a room forever

Why not rent for a year or two? It could be a house or an apartment. Maybe live with roommates?

I read this whenever I'm seriously thinking about buying:

https://jlcollinsnh.com/2023/03/02/why- ... nvestment/

This thread is probably worth a read as well:

viewtopic.php?t=12787

@WRC, maybe you're right, owning a house is for the rich that can afford such an expense.

Maybe I'll do something else

TopHatFox wrote: ↑

Wed May 31, 2023 12:12 pm

Like, even if I re-build all the finishes, the bones are still 100 years old.

This may not be a problem if it's well built, quality timber framing can last for centuries. Although I'm not au fait with American construction methods, and it might even be a resale/mortgage issue ? Environmentally though it's generally better to refurbish and retrofit rather than demolish and replace, as you're wasting the embodied energy. Something like 40% of carbon emissions come from the construction industry.

TopHatFox wrote: ↑

Wed May 31, 2023 1:32 pm

@WRC, maybe you're right, owning a house is for the rich that can afford such an expense.

Maybe I'll do something else

And if you rent for a couple years, get a promotion or two, you'll likely be rich

Mrs. Ego and I often ask ourselves the "money-is-no-object" question to explore what we are really looking for... so I'll ask you.

What would you build/buy if money were no object? Show us a few zillow links. Where would it be located? How many rooms would it have? Would you have a yard/garden? What style of home would it be? What unusual features would it have to justify building over buying a pre-existing home?

Key word in local building regulations is the word “local”. Sometimes this is national (e.g. national electric code) sometimes this is state, and sometimes this is village/town/city/county. Usually it’s a combination of all three.

Most villages/towns/cities will have a building department which can help you navigate what is required. I actually agree with you that the blanket statement “it’s too complicated you can’t do it” isn’t very helpful and is usually not true. My personal experience is that spending the time to read and understand the local regulations is time consuming but not very difficult and if you have some experience and are detail orientated it’s really just effort.

Many building departments will let owner-occupiers do their own work for single family residences. It [generally] gets more complicated for multi-family or rental properties where licensed contractors are required - see also @Jacob’s point above.

However, there is a big difference between learning car repair on an old car where it isn’t the end of the world if you mess up vs. building your own house. A significant amount of your capital, time, energy, etc will be tied up on this. A better comparison to your car repair would be learning electrical or plumbing by doing projects on a house you own, or doing carpentry by building some custom in-built shelving, etc. The reverse example is if you decided to build your own race car from scratch before you did any work on an engine.

Learn to jog before you take on an ultra marathon.