We ALMOST Bought a $1.8M House…

And I am, at this moment, regretting not doing it.

$1.8M.

$1-8-0-0-0-0-0-0.

That’s a heck of a lot of cash.

We’re not rich people. We’re not the type of people that should be spending $1M a home, let alone $1.8M.

But — that is what it looks like we HAVE to do if I don’t want a crazy horrible commute and we don’t want to leave the area.

What makes the $1.8M possible is that we’re still strongly leaning towards buying with (AND LIVING WITH) my in laws. The big requirement is that they have a separate living area from us (separate unit on the property or at the least an in law with separate entrance.)

The $1.8M house was super cute. 3 bedroom, 2 bath, with a 400 square foot garage we could convert…

It had its issues. Other than being $1.8M. It had some termite activity, according to the disclosures. The 400 square feet of the garage would be challenging to turn into a real 1 bedroom apartment (my in laws aren’t married but are friends, so they can live in the same unit just need their own rooms.) The lot didn’t seem that big, though I guess it was at 7,500 sq ft, but most of that was in the front yard and in a very long driveway.

I regret not buying it, but I would have regretted buying it.

It was originally a 2br/1ba, and along its life some time an addition was plopped on the back of another bedroom and bath – the master suite. But the suite wasn’t that sizable… a full sized bed felt tight in there. While the home showed quite nicely, the reality was that for $1.8M it was too small for us, given we want to grow our family soon.

But I don’t think anything here will really be the right fit… unless we want to spend $3M+, which we don’t, and we won’t, unless we win the lottery we don’t play.

That said, my husband and I started tracking our joint net worth and it’s about $920k right now. Not too shabby. Mine is about $840k of that! But that’s ok. We’re doing well, yet living in a 1 bedroom apartment. I realized that this year, with my stock and bonus and such, I could clear $300k-$350k before tax ($117k of that I’ve already made as of April 1, which is crazy to think.) If I could maintain this level of income for the next 30 years, sure, we can afford a $1.8M home. But I won’t. I won the job lottery at the moment and am holding on for dear life. In 3 years, I can save a good $300k and we should break $1M in net worth. After we hit $1M, I’ll feel comfortable having another child… but I’m not sure I feel comfortable purchasing a home for $1.5M+. $500k, sure. $800k, maybe. $1M, possibly. $1.8M…

That’s too much for a house. That’s just insane.

My husband makes $80k a year. We aren’t paying for childcare right now, but if his parents got sick that could change any minute and we’d have $2k/ mo right there. With another kid, that’s $4k a month. It just doesn’t add up. Even if his mother puts down $1M and we have a $800,000 mortgage, that’s about $7000 / mo. How does anyone do this?

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2 comments

  1. Seems like a tough decision.

    2H2018 was the time to buy in retrospect. Now with the S&P 500 back to all-time highs, it seems like demand for SF Bay Area Real estate is heating up big time again, despite the increase in inventory.

    But if you don’t feel comfortable buying, don’t buy!

    I actually just sold some stock to buy another property close to that price point for $688/sqft. It’s a fixer, but I like fixers b/c I have my guys. It also has a view.

    I figure, just in case there really is tech IPO mania, might as well buy another property in the “affordable” $1.5 – $2M range before that range shifts up by $500K.

    GL!

    Sam

  2. Mr A. says:

    I personally think you should plan to rent if you want to stay there, or plan to move away in several years.

    $1.8M for a 3 bedroom house with no in law suite is absurd.

    Just your income in one or two years buys a 5 bedroom 4 bath nice updated house and in law suite easily for $400-500K where I live and in many other places.
    We don’t make the kind of income you make in our locale, and it would be near impossible without being a CEO. Take that income while you can, save it, and then go find your happy place to grow your family elsewhere, or stay there and rent.

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