FI Fail? Maybe. YOLO Win? Definitely! Our Stressful But Worthwhile (Maybe?) Decision to Buy Another House

Holy Crap. This ended up being a nearly 5000 word post describing how we thought through buying another house. I don’t blame you if you skim this one, or even just skip it. As usual, the primary purpose of this blog is self-serving, in that it documents my decision making for future review, and helps me clarify my thinking. I honestly don’t know if anyone else will get much else out of this one! But hey, what the hell, figured I’d throw it up here anyways. 

Remember when we sold $100k worth of Stocks to buy a new house? Last month we sold another $100K, and then used the combined mula to put a down payment on another house. And we haven’t even listed our current house yet, nor do we plan on doing so for another month or two. After years of debt free bliss, we even have a mortgage now! Is this stupid? Maybe. You tell me. But we’re in it now, and I think it makes sense. Let’s get into it.

If you recall, last summer we started looking at different bedroom communities just outside the city we currently live in. While our city is cheap, the crime ain’t great, our schools are a reflection of that, and my wife has to drive like 45 minutes to work. Plus we’re in a concrete jungle where you can’t walk anywhere outside our small neighborhood. Using the google, we found three smaller towns that were the opposite of that; walkable, great schools, low crime, and less than 20 minutes from my wife’s work. We’ll call them Grayville, Richland, and Eagleton.

Adventures in Grayville

On paper, this town of 20,000 made the most sense. It was the cheapest of the nice places, and would cost us about another $100K to move there. Looking at google maps, in theory you can walk or bike to the schools, playgrounds, and a few local hangouts. It’s also close to my wife’s work, and close to a big park. The schools are top rated; way better than our current system where our oldest goes.

Neither my wife or I had spent much time there, so we carted off our kids for a few hours to check out a few playgrounds and parks. It seemed somewhere between bleh and Okish. But yeah…on paper, the numbers really worked, and we knew Richland and Eagleton would be at least twice as expensive. Maybe it’d seem better if we spent some more time there? More in depth recon: we got an AirBnB for a weekend and gave it a test drive.

The results were almost comical. Within the five minutes of arriving our daughter managed to jam her finger in our car door, and then again in the AirBnB’s screen door. The next morning we woke up and walked to a playground and she got stung by a bee. Obviously shit like this could happen anywhere, but if Spock was not my spirit animal, I’d be thinking the universe was trying to tell us something.

More indicative of the actual quality of this place was our attempts at walking places. While it looked doable on Google Maps, in reality we were always walking next to a busy road with cars going 40-50 MPH. Sure, we were on a nice big sidewalk, but not really enjoyable. And the whole sidewalk and bike lane system felt like an afterthought as things didn’t really connect well; to walk places you had to constantly cross from one side of the road to the other even when going in one direction. Weird. The whole town was like a mash up of disconnected suburbs that barely connected, and had large weird open concrete areas that felt like asphalt deserts.

Amusing shit also kept happening. We waited in long lines everywhere we went, and then got crappy service for not so great food. The first time I figured it was just the one restaurant, but it kept happening. Odd; nothing special going on, just a typical weekend. At night police and fire sirens raced past the residential area every 20-30 minutes. Reading the local incident map the next day, nothing crazy had happened outside of normal calls for service that occurred regularly. I’ll freely admit that our judgment of Grayville was likely skewed by some bad luck, but it also didn’t seem like a place where we’d feel comfortable walking or biking around. On to the next one.

Richland was the next most expensive, and would probably cost us another $150-250K to get into. It’s 5 times bigger than Grayville, and was designed from the ground up to be bikeable and walkable. The schools are still way better than what we’ve got now, but it would be a bit farther of a commute for my wife. We’ve also been there a bunch, yet never really loved it. This is mostly because it’s huge. And spendy. Though the bike trails are amazing, you’d have to ride for miles to get to a school or a library. And it’s very popular, which means it feels crowded. The vibe has never been our thing either. The citizens of this town are often the butt of jokes in the area, which make fun of Richland’s fancy yuppified high spending ways. Knowing some people that live there, this isn’t completely accurate. But I know plenty that help to perpetuate the stereotype.  Everytime we visit it seems like the Joneses are on some next level Space Race. Something along the lines of “My Polestar makes your Tesla seem like last year’s Honda Civic” .

We visited a few more times, and tried to be objective. The playgrounds were nice, and so were the few people we talked to. But between the giant sprawl and increased commute time, it felt like we’d be spending lots of money for not much improvement.

At this point we about gave up, and figured we’d wait a few more years and move out of state to someplace that checked all of the boxes. As an afterthought, we swung by Eagleton.

Eagleton is about the size of Grayville, but because of a bunch of natural obstacles, parks, and waterways, it’s compressed and feels more like a small town. We initially didn’t consider it because of its reputation.

In our state, it is one of the most expensive places to live.

Since it’s so small and expensive, most people we know don’t even contemplate moving there. People in our state think Richland is where all the stuck up yuppies go, but Eagleton is rarely mentioned. It’s seen as the home of people that are on another socio-economic strata, and not worth talking about because it’s nowhere near relatable. What the hell…we checked it out.

On paper, it looked amazing. Small town, everything is walkable and bikeable, but much shorter distance between points. Lots of playgrounds, parks, little cafes, and small businesses. Schools are the best in the state. Also the shortest distance to my wife’s two offices. But holy shitballs, it’s expensive. Going deep into historical sales and current property valuations, we could maybe find a rare place that was only $250K more than our current house, but the average Eagleton house on the market would be double that.

When we visited, it seemed….actually pretty amazing. The first time where the Google Maps feel lined up with reality. Everything is actually bikeable and walkable, and on top of that, people were out and about actually getting around in such a manner. The parks were amazing, and the places we stopped by were nice and welcoming.

The people? Weird. In a good way. In Richland, people seemed to be competing to spend the most amount of money and have the highest anxiety. In Eagleton, I saw a guy in an old Carhart and stained jeans get out of a Tesla meetup with another guy dressed the same who arrived in a beat up Corolla. This was an often repeated theme in my people (and car) watching. There were as many beat up pickups parked on the main drag as there were high end luxury cars. And no one seemed to be paying attention to either. The one thing that people were competing on was the complexity and fanciness of how to best tow or haul kids on ebikes. I never saw a cargo ebike in person before going to Eagleton, and our first time there I saw three.

I guess this is one of those times where you actually get what you pay for. We were sold on Eagleton the first time, but ended up going there multiple times afterwards to confirm that our first experience wasn’t an anomaly. It wasn’t; each time we went there, we discovered new cool shit.

So what did we do?

The only rational thing: screamed YOLO!, did a few shots of Jägermeister, and then arbitrarily sold a shit ton of stocks and bought the first house we saw-consequences be damned!

Uggg..I gagged a bit just thinking about doing shots. Heavens to Betsy I’m glad I don’t do that anymore. Back to reality. We started to think through our criteria for our house, our budget, and our options.

We’re constrained a bit by our desire to not completely upend our relative domestic tranquility. Our oldest had just started first grade, and we didn’t think it’d be cool to rip him out of his current school and start him in another one. Sure, if we absolutely had to, we could. People are stuck in that situation all the time. But we don’t need to, so why make everyone’s life suck if it’s not necessary?

Eagleton is about 40 minutes away, so in theory I could drive him to and from his school every day. While I’m not opposed to doing that for a few weeks, I sure as hell am not doing that for an entire school year. Once again falling into the category of why make life suck if we don’t have to.

Then there’s our youngest. She’s in daycare now, and while Eagleton has comparable options, they all have six month waiting lists. Having gone down the full time stay at home dad road before,unless we absolutely have to, we won’t be yanking her from childcare before having another option ready to go.

Our desire to not upend our lives meant we were not going to be moving until the end of this school year. This also gave us enough time to get on a new daycare waitlist and make the move with as minimal drama as possible. Timing wise, it’d be ideal to buy a house late winter/early spring of ’24. We could wait to list our current house a bit after buying the new one.

Then there was our budget. We could sell a crap ton of stocks, and get one of the more expensive houses in Eagleton, but we most certainly would not be FI anymore. My wife and I are both enjoying working part time, and able to cover our expenses with our current income. We’re even saving a little, which is cool. So we’re ok with downshifting into a Coast FI mode. If we need to sell a total of $250K(including the $100K we already sold), we’d be set back about 3-5 years before we hit FI again. Living our current lifestyle in a much better area seems worth that. But if we got one of the Eagleton McMansions, we’d be looking at at least 10 years. At that point, the juice does not seem worth the squeeze. Plus selling that many stocks would ream us tax wise, even if we spread it out a few years. Our goal then became to grab an Eagleton house for $250k more than the value of our current place.

Criteria for the house was simple. We’ve been working on our wants/needs list for years. Ultimately we’re pretty happy with what we’ve got now, but want a tad more space to bolster our sanity as the kids hit the teen years. 4 bedroom house, with no more than 2500 square feet. And if we’re making the move and spending the money, we want to be close to trails, schools, and stuff to do. Therefore nothing out in the country that was in Eagleton on paper only. Everything else? Whatever.

And thus we started looking on the Zillowses late summer of ’23. As predicted, most houses were way out of our price range. Those within our range were far out in the country. There were a few ones close to our criteria, but were at least $100K more than we wanted to spend.

Then one $50K under our budget popped up for sale at the end of November, it met all of our criteria, and was closer than we thought we’d find to all the major stuff we’d be walking/biking too. The problem was we hadn’t planned on making an offer on anything for at least a few more months. If we made an offer, and wanted to ride out the rest of the school year, we’d have two houses for quite some time. But then historically this was a rare find, and the low price was only because the sellers needed to move ASAP for a new job. Once again we refrained from YOLOing, and thought through the situation:

Upsides:

• If we bought this Eagleton house we’d wait until mid spring to list our current house. Information I got from a few local realtors and data from our local Real Estate Investment Association suggest that houses like ours are spending less than a week on the market and selling at or near list price. If we listed in spring and everything lined up we’d close a few weeks before school lets out. That way we’d stay for the school year, and have gotten through the preschool waitlist for our youngest.
• This would also allow us to time the market ( I hear this always a great idea 🙃). Like most places, the lowest prices by us are to be had late fall/winter, and the highest occur during the spring rush. Maybe we could buy low and sell high?
• If we didn’t move to Eagleton, we would probably move out of state to an even more expensive place. Maybe somewhere like the FIRE mecca of Galt’s Gulch in Colorado. A place within our criteria there would be $100-200K more than this Eagleton find. We’d be kinda sorta saving money by staying in state? And be closer to family and jobs we like.

Crushing Doom Stuff:

• We’d most definitely have a period where we’d have two houses. Double the expenses, utilities, and risk of one of the places getting burglarized. If shit goes long, I’d be driving an hour and a half round trip to mow the lawns and all that happy horseshit.
• If we reversed the order of operations, we could sell our current house, and then buy our next house for cash if we sold another $100k of stocks. But no one is too keen on moving all of our shit into storage, getting a short term rental until we find something, and then moving all over again. So that means in order to float two houses we’d be getting a mortgage until we sell our current house. And mortgages ain’t cheap these days.
• The floor could drop out on our local market while we’re waiting to list our current house, and we’d either have to sell for a loss, or turn our house into a rental. Given the value of our current house and local rent rates, the numbers don’t make sense when using rules of thumb like the 1% rule. Our old house would have to lose nearly half its value to be attractive as an Investment. That would suck.

After thinking about it for a few days, we ultimately put an offer on the house. The risk does bite, but we want to move somewhere better. It’s possible we’ll come out ahead, but I’m trying not to get my hopes up. 

Now-ish

We ended up selling another $100k of stocks right at the New Year so it’d count on this year’s taxes instead of getting lumped in with the other $100k we sold last year. Closing was pretty simple, and we’ve spent the last month fixing some small stuff and getting the new house set up so we can monitor it remotely. So far, so good, but the real test will come when we go to list our current house.

Once again this decision came down to the feels. There’s always the temptation to buy something immediately if it seems like a good deal and scarcity is involved. This was definitely the case here-not many Eagleton houses in our budget, and when one came up under our, the pull was there. We tried to temper that as much as we could by carefully considering the risks and thinking through how’d we deal with several worse case scenarios. 

On the flip side, there’s the pull to not spend any money at all. We don’t need to move, we want to. If we stayed where we’re at, it wouldn’t be the end of the world. And our investment accounts would be much happier. But that came down to a choice between this:

• Do we want to be FI in a suboptimal location where we don’t want to live, and hopefully move somewhere better years down the road?

-Or-

• should we switch to coast FI (especially since we currently don’t mind our part time jobs), and move somewhere we want right now?

We chose the latter. How the finances will pan out is anyone’s guess, and I admit it feels stressful doing this two house thing. Hopefully it’ll work out-if not we’ve got plenty of contingencies and we’ll have learned some stuff. 

It’s odd even being stressed about this whole thing, given our FIish level stash, as well as having gone through much crazier real shit. This should barely register; it’s really just some minor inconvenience of having different amounts in different accounts. But I don’t think stress ever goes away, even when it’s for a relatively minor and ultimately positive thing. I do seem to be getting better at working through it; allowing myself to be ok with being stressed about something ridiculous, which then allows me to let it go(much better than just suppressing it right off the bat).

I’d be interested to hear what you think about all of this, and if you had a similar experience. Has anyone out there done something different given the same circumstances? I’m sure there’s other options we didn’t even think about.