Fox's Journey: And Onto the Sunlight!

Where are you and where are you going?
TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@zbigi, pre-nups get thrown out all the time; they're practically a meme at this point

@Frita, a nice relationship, sex, etc., much like what she's enjoying. I mean, I brought up the lack of LT compatability since the beginning and many other times. I think she's hoping I change my mind

basuragomi
Posts: 416
Joined: Tue Oct 15, 2019 3:13 pm

Re: Fox's Journey: And Onto the Sunlight!

Post by basuragomi »

Did you tell your partner when you got a vasectomy? That's some pretty optimistic thinking on her part if so.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

Sure did, it’s hard not to know too considering the additional activities it allows lol. I did freeze lots of stuff as insurance via IUI (definitely not IVF) to, say, 40 yo me. Very unlikely to use it tho, especially with how hard it’s been to get and keep a job, startup, house, etc., + that life has been mostly work

Salathor
Posts: 394
Joined: Fri Dec 18, 2015 11:49 am
Location: California, USA

Re: Fox's Journey: And Onto the Sunlight!

Post by Salathor »

I recommend you read the book "The Meaning of Marriage" by Timothy Keller. Yes, it's Christian, and I'm assuming that you are not. I suggest you read it anyway. You can disregard the Christian bits if they don't resonate with you--you might disregard the entire message, if it doesn't strike you. But this is a forum about pushing boundaries and expectations, and his is one of the most powerful explanations about the power and beauty (and duty, and sacrifice) of marriage. It changed my mind and heart.

Even if you read it and decide it wasn't for you, you can go forward with at least an understand of an alternate viewpoint that you have then discarded.
Last edited by Salathor on Thu Apr 06, 2023 2:14 pm, edited 1 time in total.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

That’s interesting, what are some of its main points?

Salathor
Posts: 394
Joined: Fri Dec 18, 2015 11:49 am
Location: California, USA

Re: Fox's Journey: And Onto the Sunlight!

Post by Salathor »

Sorry, I just edited it with a slight parenthetical to make it a little more clear. It's a medium length book and it's been a few years since I read it, but what I came away from it with is that when we lose ourselves in sacrificing for another, we both end up stronger for it. Basically, instead of thinking of how marriage can build you up, or even both of you up, look at marriage as an opportunity to sacrifice, and through that loss of self-interest you will both end up better in the end.

But please don't take my two sentence summary as the full depth of it. Tim Keller is an excellent writer. IMO, probably the best (best prose, most rational) Christian writer working today.

EDIT: Please don't take "rationality" to mean he's going to attempt to prove christianity. It's not that kind of book. It comes with the assumption that you believe, but if you would rather you can ignore that aspect and think of it as any moral system for the purposes of argument.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@Salathor, I suppose if marriage is supposed to make you stronger by making life harder, and you believe life is meant to be a test, that is indeed an argument, but not one I really want to entertain; life is hard enough as is hehe. Divorce Corp highlights the legal issues often faced when divorce happens (which is 70% of all married couples in a 40 year timespan): https://www.youtube.com/watch?v=th0R2nxva2w

-------------

APRIL 2023

Good news! I had an interview for a programming/geology role at 75-85K, 100% remote. Whaaat. Really hoping I get it. I also decided:

1. I want to buy a 2B house (not a townhouse), hopefully 200k if it's a fixer-upper (#HomeRenovision) or 300k with how stupidly expensive everything is. My guess is, it makes sense to buy a used house with good bones and then fix up everything over time, just like with a used car. That and rent any additional space until the mortgage is paid off. I'm thinking in a small city or ~suburb of a bigger city, with good natural sunlight entering the house, and a garage.

2. I'm not sure if I'd wait a few years and buy a house outright, or if I'd actually go ahead and buy via mortgage. I'm guessing it makes more sense to just save and do a big lump sum, because jobs are not stable and are unlikely to be (especially with AI).

2. I'd probably want the house to be in northern AZ, northern UT, western CO, or near Vegas. I think UT or CO are best. The eastern US is boring AF hilly forests or boring AF farmland. AK and HI are way too far from everything, better for visiting. The west coast states are completely out of reach financially, Idaho and Montana are pretty sparsely populated, and Canada is cold most of the year + far. NM is kinda trashy, but otherwise a cool state. So, that leaves AZ, UT, CO, and NV as a contender for a house purchase. I think it makes sense to buy a house in the US, as the rest of the world would fall first before the US. The US is also very safe, and I like that. Europe + Australia + NZ are pretty commie (the latter two being super far too), LA+C and Africa are unstable af, Middle East is a giant desert with towns in between, and India + China are overpopulated dystopias. SE Asia could be cool, but I'm not sure one can buy property there.

3. I'm OK with working a full-time WFH coding job and woking on startups. I have the time and energy, especially sans kids. Yeah, working sucks, but I've learned that not working sucks too, especially because no one will buy a house for you, staying with the parents isn't really free, etc. I'm hoping I'll be able to hack this job if I do get it. I don't want to flunk out of jobs anymore, and I like the fields I've chosen finally. I think a few years ago, I didn't understand the world because I hadn't travelled much or done much research on different professions. Now that I have, I know where I'd like to make my time investments for the next 10 years, and I no longer have the angst I used to have. I know what to expect from life.

4. Honestly, I think owning a paid off house is a bit of an ERE, especially combined with DIY skills to fix stuff that breaks, with DIY projects to minimize utility cost, and in a low-property tax state (or the tax being paid off by a rented out room). You now also have nearly unlimited time to work on a billion startups until one succeeds big. You can also rent the whole house out to a trustworthy person if you wish to cheaply bum about Europe or SE Asia for a few years.

5. I will likely need to do this alone, but that is OK. The fact that a judge can just say "your house is community property" after you paid for it for 10 years and take it away is appalling. Basically making you homeless overnight. I think I will learn to enjoy my freedom, especially in cool outdoorsy states with a ton of outdoor hobbies, coding work, and so on.

-----------

QUESTIONS

I'm trying to figure out, if you eventually have a $300K portfolio of stocks and bonds in a 401K, IRA, and taxable accounts, how would you lump sum that into a house (wouldn't selling off a bunch off assets at once cause a huge tax liability with how inflated the assets got over the past 5 yrs)? And can you pay down the principal of a house more than what is required every month? What are typical mortgage interests rates these days?

Salathor
Posts: 394
Joined: Fri Dec 18, 2015 11:49 am
Location: California, USA

Re: Fox's Journey: And Onto the Sunlight!

Post by Salathor »

TopHatFox wrote:
Fri Apr 21, 2023 8:33 pm

I'm trying to figure out, if you eventually have a $300K portfolio of stocks and bonds in a 401K, IRA, and taxable accounts, how would you lump sum that into a house (wouldn't selling off a bunch off assets at once cause a huge tax liability with how inflated the assets got over the past 5 yrs)? And can you pay down the principal of a house more than what is required every month? What are typical mortgage interests rates these days?
If you have gains, you would have to pay cap gains taxes on those assets. But only on the gains. Taxes will depend on returns but must be accounted for, yes.

If you have 300k spread across all of those accounts, you probably won't be able to use them for the house. It would be a mistake to take the penalties on the retirement accounts to buy a house, even tax free. Save a little longer, buy a smaller house, or take out a tiny mortgage instead. The taxes+penalties would be brutal.

You can definitely pay more than the minimum payment each month. My wife and I paid off our 30yr mortgage in ~8 years on our last house. With rates at ~6% now, give or take, it's a better idea than ever.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@Salathor, wow, 6% - that's insane. 300K * .06 = 18K/yr of just interest, as much as a friggin' nice apartment/mo. I see, what makes sense then is saving a killer downpayment, like 150K. Then, 150K remaining * .06 = 9K/yr, as much as a nice room in many cities. If you get the 2B house, you could rent the additional room for $900 until the house is paid off (and beyond if you like the $).

My other concern is -- do smaller houses even exist? Most of the houses (not townhouses) I've heard of seem to be 3B 2B houses, which are way too big for a bachelor guy. I think 2B 1.5B (or 1B) makes more sense, but that probably puts you in condo territory, no? I suppose I could get a 3B 2B house if it's all that's available, and then turn 1 B + 1 B into a rental.

Another interesting consideration is buying a used RV and renting the whole house or just 2 individual rooms until the mortgage is paid off. Not sure if you can park an RV outside your house, but maybe you can.

----------

MORE QUESTIONS

Where do you keep the money earmarked for a 150K downpayment on a house? Do just leave it sitting around in your savings account until you reach the 150K and are ready to buy? & how much are other expected costs, like PMI, house insurance, repairs/maintenance, remodeling/renovation, furniture, decorations, risk for your city to become the next Flint, Michigan, etc.? Is buying a 3B house actually cheaper than a 2B house, because it's the more common house, and therefore has more supply (kinda like the bigger Class C RVs being cheaper than the smaller Class B)? What age house is best to buy, and what materials are best to look for? Lots of questions. Basically how to buy a used car research project, but for houses.

---------

Yeah, I think that would be the plan. Find a 2B or 3B house (fixer-upper OK) for <300K, say, in SLC or Vegas, plunk down a huge lump sum saved in a low-volatility investment, and then rent out every room in the house via the RV route, or every room but mine sans RV. You could do AirBnB, but that's more work. Coding Work will be work from home. All DIY work will be done by me over the years.

---------

I'd think building a house is probably more of a pain in the ass than it's worth compared to just remodeling/renovating a used house. The former is multi-year process, the latter you can likely do in a year of concerted effort.

take2
Posts: 317
Joined: Wed Jan 09, 2019 8:32 am

Re: Fox's Journey: And Onto the Sunlight!

Post by take2 »

You’re asking the right questions but it’s way too theoretical. Real estate is hyper local so the answers will vary - your selected locations are spread across vastly different areas, and the ultimate location within those areas will also differ wildly based on school districts, “which side of the tracks”, etc.

I suggest you find a low-cost way of living (e.g. rent a cheap room) in a couple of different towns until you get a feel for where you want to be. It’s never a great move to buy sight unseen, and a terrible one if you don’t actually know the area. Keep in mind transaction and time costs are very high with physical real estate; if it goes poorly you can’t just click “sell”.

In terms of mortgages, a higher interest rate environment isn’t really a bad thing if you are the one looking to buy. There will be opportunities to pick up some places on the cheap if the owners were over leveraged and didn’t have fixed 30 years. It’s less common now than pre-GFC but some people still did cheaper variable (or 5/7 fixed than variable) mortgages and they will likely be forced to sell in the intermediate term. Less likely in US than in UK (where it’s virtually impossible to get more than a 5 year fixe) but it will still happen.

Higher interest rates should also drive prices lower and protect your equity if you buy after prices have dropped; note this isn’t a universal thing (e.g the best areas will always be expensive) but that shouldn’t really matter to you. Try and isolate things that don’t matter - for instance paying to be in a good school district doesn’t matter to you at all, so there’s some optimisation there.

TDLR: aggressively save for a higher down payment whilst bouncing around cheaply in 2-3 different towns you’ve narrowed your selection down to. This will ensure you protect your downside whilst minimising the risk you end up in a place you don’t want to be.

take2
Posts: 317
Joined: Wed Jan 09, 2019 8:32 am

Re: Fox's Journey: And Onto the Sunlight!

Post by take2 »

In terms of where to keep your money - first you should determine when you’re likely to buy. Figure out how many sub-locations you want to live in to try out, and how long you’ll spend in each of them. I can’t stress this enough btw; even within the same larger area there will be differences between towns that can affect whether you’ll like living there or not. For example, you’ll probably need a car in any of those states, but in certain towns you may be able to do 80% of what you need to do by walking or biking whilst in others it may be 0%. No idea if that matters to you, but it’s an important consideration.

Once you’ve determined a timeline it’s just about your risk appetite. If it’s less than a year any kind of equity investment is probably not a great idea, but that’s personal risk. For example, I’m undertaking a significant amount of renovation works currently and I moved mostly to cash. Some of it was for unrelated tax reasons, but with interest rates so high I’d rather take the guaranteed return (c. 4.5% on MMA, or upward of 5% if you lock in CDs) vs. deploy in equity markets.

I suggest perusing the bolgeheads forum if you want more info. It’s not really ERE but they have some very good advice and considerations for investing in general, and strategies for short term investments to protect your money.

guitarplayer
Posts: 1292
Joined: Thu Feb 27, 2020 6:43 pm
Location: Scotland

Re: Fox's Journey: And Onto the Sunlight!

Post by guitarplayer »

The more I think about getting a property (fixer upper, a studio/1B, a walk-in 2B+AirBnB or 2B+tenant), and I probably put waay too much time thinking about it, the more I come to the same conclusions that @take2 offers. To borrow from permaculture, it takes a year to get to know a site and decide how to use it. Same could apply to getting a site in the first place.

Now we are renting a 1B flat in a major city in the UK and whilst I am still looking at the property market, I am also looking at the city, different neighbourhoods etc.

Increasingly I come to the conclusion that getting a property will in my case have to be an expressive act rather than an instrumental one. In other words, it will not be for financial profit or a means to FI, it will be a separate project in and of itself. Hopefully on favourable financial terms, which now I see as buying outright or with a minor mortgage in the circumstances of high interest rates and historically low property prices. So systemically integrated.

Where to keep the money for it - I would have a great advice for the UK not US.

take2
Posts: 317
Joined: Wed Jan 09, 2019 8:32 am

Re: Fox's Journey: And Onto the Sunlight!

Post by take2 »

In terms of size of house, and other costs. I would personally care less about the size of the house, or at least it wouldn’t be anywhere near the top of my list. You can find 4B houses that are cheaper than 1B apartments; location is everything. Figure out where you want to be and then consider size. Within the same area, larger will tend to be more expensive, but even that can be affected by the state/age of the home, quality of workmanship, and even the hyper-specific micro location. For example a larger 3BD house may be cheaper than a 2BD house in the same town if the 3BD is in worse condition and on a busy main road whilst the 2BD is recently renovated on a quiet street with a nice yard.

If you’re serious about renting out rooms to help with the mortgage then bigger is def better, and ensure there’s sufficient bathrooms. A 4BD / 1 BA house would be less attractive to me than a 3BD/2BA, unless there’s scope to put in another bath. A two family home would also work well if you prefer to have your own space. That’s an important consideration as you age - eventually you will probably not really want to deal with roommates (but I may just be projecting).

Re: costs - mortgage, taxes, utilities, maintenance are the big ones. You can fix the mortgage, taxes usually fixed each year (check the history and do some research on how the municipality can raise them), utlilties are somewhat in your control (volume + appliance efficiency + fuel source, but not price), and maintenance depends on the condition of the house. Some places may have HOA or private development fees, but I doubt you would consider such homes so just watch out for it but prob not an issue.

take2
Posts: 317
Joined: Wed Jan 09, 2019 8:32 am

Re: Fox's Journey: And Onto the Sunlight!

Post by take2 »

guitarplayer wrote:
Sat Apr 22, 2023 5:10 am

Increasingly I come to the conclusion that getting a property will in my case have to be an expressive act rather than an instrumental one. In other words, it will not be for financial profit or a means to FI, it will be a separate project in and of itself. Hopefully on favourable financial terms, which now I see as buying outright or with a minor mortgage in the circumstances of high interest rates and historically low property prices. So systemically integrated.
100% agree. Ultimately your personal residence is a consumer good, not an investment UNLESS you set it up specifically to be so. For example, renting our spare rooms or living in one side or a 2/3/4 family home. There are costs to this (being an on-site landlord can be challenging), so even in that way what you gain in financial capital you can lose in other forms of capital.

Salathor
Posts: 394
Joined: Fri Dec 18, 2015 11:49 am
Location: California, USA

Re: Fox's Journey: And Onto the Sunlight!

Post by Salathor »

What is your timeframe? If you think you are going to buy in 1-2 years, I'd probably save in a high yield savings or CD. If you think it's going to be 4-5 years to get this downpayment, I'd probably save in equities. That's kind of the time breakdown that Dave Ramsey recommends, too.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@Salathor, I think 5 years makes more sense. I need to learn way more about types of homes, years of homes, home inspection, DIY remodeling/renovation, etc. What makes sense rn is to live in a room in Phoenix, Vegas, SLC, and western CO, and see which place I like the most. Denver seems like California at this point, so I think it's dead. But how do I get 200-300K out of equities from a taxable account when I'm ready to buy without incurring (likely) capital gains taxes?

@take2, I'm serious about renting the rooms, yes. Probably to grad students or WFH people if they're available. I'm sure eventually I'll get sick of the roommates, but hopefully by then the home will be paid off. Maybe 3B 2B is good. I saw some 1B 1B houses go for only 50K less in the same area. One room would cover that difference in just a few years.

What Matters to me:

1. Nature up the wazoo, especially grandiose nature just a few hrs away
2. Red state, red municipality (probably gonna be impossible unless rural areas)
3. Good bones on the house that can last a lifetime + a garage
4. Resilient area, like to natural or human disasters
5. Healthy, hard working population
6. Ability to rent out some rooms or the house via an RV in driveway
7. Natural sunlight in the house, at least in high-use areas like the bedroom or living room.

What doesn't Matter to me:

1. School districts
2. Freshly renovated (I can do it)
3. Public transit
4. If place is bikeable
5. Super densely-populated areas, like NY or SF

--------------

Are manufactured homes bad? I'd guess they are, cause they need to be light to transport, and light probably means shittier materials.

Is it still possible to buy a house that doesn't have an HOA? & What is a private development fee, like a gated community?

bostonimproper
Posts: 579
Joined: Sun Jul 01, 2018 11:45 am

Re: Fox's Journey: And Onto the Sunlight!

Post by bostonimproper »

As someone who grew up in the Southwest with family still there, let me strongly advise you not to buy property there. Especially if, as it seems in your case, that you want it to be your lifelong home that you invest a lot of time and capital into. Between climate change and water rights issues, it is like the opposite of resilient.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@bostonimproper, does SLC or western CO count as the SW?

What difficulties have they experienced, and in what parts of the SW?

theanimal
Posts: 2622
Joined: Fri Jan 25, 2013 10:05 pm
Location: AK
Contact:

Re: Fox's Journey: And Onto the Sunlight!

Post by theanimal »

You're making it harder on yourself by choosing those locations. Phoenix, SLC, and Las Vegas have had massive price appreciation since 2015 and supply of housing is limited in both Phoenix and SLC making them tighter markets. All meaning the type of house you are describing is going to be much harder to come across at a reasonable price than compared with elsewhere. I'd suggest looking at smaller cities and towns, such as Flagstaff,AZ; Santa Fe, NM; and Los Alamos, NM.

Also, I wouldn't consider most of the southwest resilient to natural disasters. The area is highly susceptible to extreme heat, drought and shortages of water. Going to places like Flagstaff and Los Alamos ameliorate those factors a little bit but then you are dealing with wildfire risk.

With money set aside for a house, I wouldn't be speculating and on such a short time horizon would be more interested in preserving money vs inflation. So it would be in either money in a CD, money market fund or bonds. Depending on how you invest some of those will just be taxed as income. You'll pay taxes on the capital returns but it generally won't be more than 5% p.a. With 300k that'll put you very roughly $45k for 3 years. The capital gains tax rate for a single individual is $0 for up to $44.6 k. So in this example you'd be paying taxes on $400 at 15% or $60 in taxes. This is presuming that you don't already have the money invested and have accrued capital gains.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: Fox's Journey: And Onto the Sunlight!

Post by TopHatFox »

@theanimal, pretty much everywhere desirable has had severe price appreciation. Flagstaff is pretty cool. Yeah, I guess NM hasn't been invaded yet by the ppl w/ the $. Still, all the cool stuff is in UT. There's always Provo or Ogden. Smaller cities is probably where it's at, especially cause I don't need a big population.

Post Reply