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Old 02-22-2019, 01:01 PM   #21
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OP, is there a reason (or did I miss it) as to why you aren't just going to do a mortgage on the property? Think of it as an option in terms of when you pay off/down the loan instead of taking a big immediate hit on which you have to pay capital gains.

ETA - once you FIRE, and no longer have that traditional income flow, it will be much harder to get a loan. So now's the time.
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Old 02-22-2019, 01:49 PM   #22
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We are in the process of looking at homes right now too. To get the location we want, and decent quality house, it will require a significant mortgage. Something we can handle and I've planned for.


I plan to retire in 2020 so, that gives us a year to find a house and get the loan before I retire.
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Old 02-26-2019, 02:56 PM   #23
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So, I think I have a contract... Have a verbal agreement with signatures to follow. The seller finally came in with a counter at terms I was going to offer as my highest and best as I walked away. Kind of a unique property so not one I'd find another comparable (unless another opened up in that small community -and only 8 units have the same floorplan). More than I wanted to spend (just because I want to FIRE) but RELATIVELY cheap for the location and it has everything on my wish list in a property (small living space, oversized garage, low maintenance, and walking/biking distance to almost all of my leisure activities).


Will probably borrow a portion against my TSP in order to reduce my capital gains tax hit... I can sell assets to pay it off right before I FIRE myself as my CG tax rate should be zero if I play my cards right.
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Old 02-26-2019, 05:20 PM   #24
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Best wishes for happiness in your new home.

For others still looking for their own shangri-la....

About $170,000 in our community. Very similar to our home.

https://simplythefinest.net/villas.php
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Old 02-26-2019, 05:41 PM   #25
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Originally Posted by copyright1997reloaded View Post
OP, is there a reason (or did I miss it) as to why you aren't just going to do a mortgage on the property? Think of it as an option in terms of when you pay off/down the loan instead of taking a big immediate hit on which you have to pay capital gains.

ETA - once you FIRE, and no longer have that traditional income flow, it will be much harder to get a loan. So now's the time.

I missed this reply. I did try to get 1% seller financing for a higher price, they balked at that but my agent thinks it boosted their ego a bit and got us to a cash agreement. That said, my reasoning for paying cash....


I'm planning to FIRE myself before age 50 and hope to have a ~3% WDR. $100K would only spit off $3K of income before taxes while a $100K mortgage would cost more than $3K a year to maintain (granted it would eventually end). I'm more concerned about cash flow than maximizing asset value and earning after tax returns that are above current mortgage rates is not guaranteed or as risk free as a paid off home. A good chunk of my assets are in my TSP and IRA so my withdrawal options are limited so a mortgage payment obligation could cause me cash flow issues. The home is in a location likely to see above average appreciation for the area (and has features that are already not economical to offer in new construction due to land prices) so it should appreciate nicely so even though not leveraged should be a good investment of my funds. -I'm not buying it for the investment but knowing that makes me feel better about tying up my money!
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Old 02-27-2019, 05:08 AM   #26
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Congrats! I just retired this past December, and have spent the last 2 months selling some stock to pay off my mortgage. Im in the house that I want to stay at until I cant, a little bit of land, wonderful area, great neighbors, and with no mortgage, darn near perfect. I have found that now I can spend so much quality time at home, I hardly ever leave, and I couldnt be happier.

Your spot is so important, so glad you found yours (P.S. Im in Florida too. Couldnt love it more).
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Old 03-04-2019, 03:11 PM   #27
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Hello Mr Taxman! Inspection didn't note any deal killers so I put in my sell order today and realized some gains. Hopefully the funds flow quickly to my CU -especially the TSP loan that is coming by snail mail so I can meet closing. Exciting but a bit weird spending this much money! Ultimately, this gets me one step closer to FIRE as I lock in my housing in a great place to live.
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Old 03-14-2019, 04:26 PM   #28
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Everything is in place and I close tomorrow. Will miss the cash in my account but the imputed rent will be a nice return. Thinking I may have delayed actually quitting a bit (still FI by the math but liquidity took a hit) but will enjoy living there and feel more secure owning my place!
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Old 03-14-2019, 06:32 PM   #29
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Everything is in place and I close tomorrow. Will miss the cash in my account but the imputed rent will be a nice return. Thinking I may have delayed actually quitting a bit (still FI by the math but liquidity took a hit) but will enjoy living there and feel more secure owning my place!
How exciting! Congratulations.
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Old 03-14-2019, 08:01 PM   #30
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Congratulations, you got your dream home! Let us know how you are enjoying it.
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