Buying a nice house? I don't want it.

[RearAdmiral]

TLDR near bottom

My wife and I have been trying to figure out our next housing move. Some background first. I've owned a house that I bought foreclosed for 7 years now. It was in good structural shape and only had cosmetic issues / updating that needed being done for the most part. We have a new fantastic kitchen that is almost 2 years old and really like the house overall, plus we have a surprisingly nice / private yard for being "in town". This is a rural town with about 5k people, we are on about a third of an acre. Major point here being that the place was a dump and cheap so we could make it into something we both really like over the years. Our only issues at this point are the actual design / room layout of the house preventing us from comfortably housing more than 1-2 kids at most. The only usable portion of the basement is for storage / chest freezer, the other parts of the basement are a crawlspace or a very short ceiling portion under the old part of the house that wouldn't get finished.

The house was very cheap to buy, our mortgage is laughable(even at 15 year) and thus I've been able to afford to do whatever I want basically, namely save money, go on a few trips here and there, have a couple pinball machines, neat cars. At this point we have some good savings, and a lot of equity in the house which at minimum should be 125k by itself.

We both want a larger piece of property which is how we both grew up, and a nicer home. So around me buying a big piece of land ~10 acres or so and building a house would probably cost around 600k which is too much for us, considering we don't want her to work while raising young children. My first is due...4 days ago lol. Buying a nice home on similarly sized land is about the same, maybe a bit cheaper. The issue comes in that we really enjoyed making this current foreclosed house into something we like. We don't want to be in a situation where we drop loads of money on something that is already too nice to change, but not our style. Over the past couple of years we have come across 3 houses or so that are both upgrades for us and that we actually like, but none of them had the land. So the selection / style just isn't there for us.

So seemingly the only solution that fulfills all these criteria is to find a dump of a house with a lot of land for a good price, and get it renovated. There is a foreclosed house by us on 9 acres that needs a lot of work. We will hopefully be able to look at it soon once some restrictions and such are lifted. Ideally we could buy the place for under 200, put another 150-200 into it and come out without a ridiculously high mortgage, an updated house we love, and a lot of land!

I feel like I am taking crazy pills when I describe this situation to my family. I get grilled on why I don't just buy a nicer house for 400k, but my explanations don't seem to make sense to them. I know the long, painful renovation path isn't for everyone, but what are your thoughts on the buying a nice home vs building vs reno?

TLDR: Thinking about our next home. When buying a nice house you get stuff too nice to change, but not your style and you are probably out of money. So buy a dump and renovate it?

 

[MagnusTheBrewer]

Go for it. You've already been through it once so, you have better knowledge of possible pitfalls.

 

[RearAdmiral]

Go for it. You've already been through it once so, you have better knowledge of possible pitfalls.

We are really hoping it can work out! Our contractor will be accompanying us for a cursory inspection.

 

[herm0016]

DO IT. that's my advice.
we have lived in 4 houses in 6 years. rented, then bought the first a month after a 1000 year flood for about half what we sold it for 4 years later, with some upgrades. next one we gutted and sold for 20% more just over 2 years later, and then we found a run down duplex with a ~ 3k sq foot house plus a 1 bd 1 ba apartment, both with 2 car garages. We have been going room by room inside our side of the house, and had our contractor move in and rent the apartment after he remodeled the whole thing. removed 15 to 20k lbs of brush and overgrown landscaping, spread over 50 yards of mulch. should be worth about 100k more than we bought it for less than 2 years later. plans to redo the kitchen/ dining room and vault the ceiling should add another 50k to value.
its on an acre in a place where its very very hard to find any land under 1 mil, and heavy building and subdividing restrictions means there are only about 1000 buildable lots left in the whole county. we also own another duplex that is rented, and all the work and moving allowed us to buy it with 25% down.

 

[RearAdmiral]

DO IT. that's my advice.
we have lived in 4 houses in 6 years. rented, then bought the first a month after a 1000 year flood for about half what we sold it for 4 years later, with some upgrades. next one we gutted and sold for 20% more just over 2 years later, and then we found a run down duplex with a ~ 3k sq foot house plus a 1 bd 1 ba apartment, both with 2 car garages. We have been going room by room inside our side of the house, and had our contractor move in and rent the apartment after he remodeled the whole thing. removed 15 to 20k lbs of brush and overgrown landscaping, spread over 50 yards of mulch. should be worth about 100k more than we bought it for less than 2 years later. plans to redo the kitchen/ dining room and vault the ceiling should add another 50k to value.
its on an acre in a place where its very very hard to find any land under 1 mil, and heavy building and subdividing restrictions means there are only about 1000 buildable lots left in the whole county. we also own another duplex that is rented, and all the work and moving allowed us to buy it with 25% down.

Very nice work! Thankfully we don't have too many restrictions around where I live. One of the only concerns is that we have a law called Act 319 that allows folks to put land >10 acres into agricultural taxes(way lower) compared to residential. Obviously the 9 acre plot is the worst case scenario then tax wise, but there is a way around the act in that if I produce and sell $2k or more / year for 3 years of goods I can get put into the act.

I just looked at the listing again and the property is going up for auction 6/2. I've left a message with my realtor, so I will have to move quick to get a good look at the house and get my finances ready for bid if we decide to pursue. Not the best timing with an overdue newborn lol!

 

[herm0016]

we moved into this place 2 weeks after we got 2 foster kids, a 22 month old and a 6 week old with ptsd. it was great fun. Good luck on the auction, i have not delt with that peticular issue. many others though. make sure you inspect throughly, like well, septic and such. can give you some pointers on testing that stuff. look for all the original permits also to see when stuff was fixed/put in.

 

[RearAdmiral]

we moved into this place 2 weeks after we got 2 foster kids, a 22 month old and a 6 week old with ptsd. it was great fun. Good luck on the auction, i have not delt with that peticular issue. many others though. make sure you inspect throughly, like well, septic and such. can give you some pointers on testing that stuff. look for all the original permits also to see when stuff was fixed/put in.

While I don't know much, the house was built in 1989 so the materials should at least be semi modern, like plumbing / electric. I hope anyway. We have septic skill in my wife's family so that could be a massive help if the septic is an issue. I can reach out if we actually decide to proceed for some pointers.

 

[herm0016]

when it comes to construction techniques, 1989 is much closer to 1960 than today.

 

[RearAdmiral]

when it comes to construction techniques, 1989 is much closer to 1960 than today.

lol neat. Well I guess that is what gutting is for.

 

[OILFIELDTRASH]

How about something in the middle? Decent house that needs some work but not remodel and that is on an acre or two. 9 acres is a lot to handle and not cheap. I have 8 acres at my current home but I don't have kids. I honestly don't know what to do with all of it. I use it to take walks and go for jogs. It's nice to have the cushion from neighbors but having 2 acres would be plenty tbh. Reason I bought it was that it was cheaper than some places that had 1 or 2 acres. Just a little further out but still manageable for us. It is not cheap to maintain. Go through more gas than you'd think, and yard equipment that will stand up to mowing 8 acres ain't cheap. Forget the tractor or zero turn argument. You will need and end up with both. Take a look at some of those prices. You could get by with a decent $4500 zero turn with a couple acres. 5+ acres and you are looking at some commercial equipment.

 

[herm0016]

yea, we have a allis chalmers 5020 tractor with a front end loader, 3 pt hitch, and implements for snow, grading our gravel drive, etc. and a cub cadet 1641 garden tractor for mowing. about 10k worth of equipment, all bought used. it all depends on how you want to maintain stuff, and how much enjoyment you get from working outside. I get a ton of enjoyment out of it, and it was totally worth the investment for us.

 

[Torn Mind]

when it comes to construction techniques, 1989 is much closer to 1960 than today.

Unless you have the misfortune of buying budget housing with some polyethylene.

 

[Greenman]

when it comes to construction techniques, 1989 is much closer to 1960 than today.

I still here people say "they don't build them like they used to". I always answer with "we build them a hundred times better".

 

[herm0016]

poly is fine if its used correctly. my 1960s house is still standing because it is drafty and can get wet in the walls and dry out with no problem. a modern house built with modern materials and techniques does not get wet, and does not need to dry out.

 

[RearAdmiral]

Well I went to visit the house twice, then had my baby. So apologies for the lack of updates. I visited the first time with my parents and one of my realtors. The place was actually in better overall shape than I expected, but there would be huge changes that would need to be made to the home in order to make a proper 3-4 bedroom home. Things are weirdly opened up and/or stitched together with additions in the home. There was something like 3 additions put on the main home.

The front yard was positively gorgeous though, maybe 1.5 - 2 acres of perfectly flat grassy yard, with some beautiful landscaping in front of the house.

2nd visit I had a "retired" high end reno guy come check the place out, his advice was to walk away(which I am fine with). The house would need a tremendous amount of work / $ and it would still be a weird stitched together house. I'd basically have to get the property for the cost of the land, which may or may not be possible. I really don't know how to describe how this place was put together, but the best bit I can give is as follows:

As you walk through the front door there are stairs to the second floor basically in front of you, formal dining to the right(with "bedroom" above that), and an open ceiling living room to the left with a very large fire place. If you take one step through the door imagine a small walkway above your head that is a small balcony above the first floor in the living room. This walkway would connect to the "bedroom" otherwise there is no way to access it. So the hilarious part is that when you go upstairs and into that bedroom, you walk over to the walkway and it is just completely open, no door, no strings of beads, nothing. So you have a bedroom that just has a chasm open to this huge living room. Another funny part of this is that you can't even really put a door there because there is a window in the way....lol. I really should have taken a pic.

Regardless I should be having another realtor stop by in the next day or two to give us a ballpark on our home value to give us some more info on what we can do to figure out our next house. Houses seem to be selling around us quickly due to some folks trying to escape from NYC and such. I have my eye on another house that is 5x the cost of my current home(well what I paid for it 7 years ago in foreclosure), which seems nuts, but it is only like 1 of the 3 houses we have actually liked so far in a couple years so I'd like to go see it. The numbers *could* work if our house is valued fairly high. I'm trying to keep the payment at or below 30% of my net income so I'd have to put a heck of a lot of money down. Very nicely appointed craftsman, 5 acres, big pond in backyard(drool).

Apologies for another wall of text but I am of course busy with a newborn lol.