Just_Steve
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^^^Nice update.
Financing 2nd Home with 401K
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Teacher Terry
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That’s great!
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The easy solution to the first part is to snowbird for the winter.
I would suggest thinking through the future before investing a lot in upgrades. We tore down and rebuilt our lakeside home and it is very energy efficient... lived here winters and then decided to replace one-car garage with two-car garage with bonus loft.
Fast forward a few years... we got tired of Vermont's long, harsh winters even though we grew up here and now snowbird. Knowing what I know not I probably would have done less... certainly not the insulation and heat in the garage and perhaps less in the house too. No huge regrets though and I'm sure that we'll get everything back when we sell and get to enjoy it in the meantime.... but if I knew then what I know now I might have done things differently.
Rural living is different... it seems we are constantly calling when we are in town to ask... how are we doing on milk and bread?... I need one of those new fangled refrigerators where you can see what is in the fridge from your phone.
The long term plan is to snow bird in the Carribean in the winter, but our go to spot there is becoming less and less affordable. But we will see.
The present plan for the lake house is no major upgrades until we decide if it is long term or not. Lots of big stuff we'd like to change, some of probably a good investment too, but we are not letting ourselves do it. Difficult sometimes as a retired engineer in a 120 year old house with no true right angles anywhere!
It is rural, but our base home is rural too (pop 3100) but very close to a good sized city. The lake house is kind of rural everywhere surrounding but I have found in my time there where things are and nothing is more than about a 25min drive.
The present plan for the lake house is no major upgrades until we decide if it is long term or not. Lots of big stuff we'd like to change, some of probably a good investment too, but we are not letting ourselves do it. Difficult sometimes as a retired engineer in a 120 year old house with no true right angles anywhere!
It is rural, but our base home is rural too (pop 3100) but very close to a good sized city. The lake house is kind of rural everywhere surrounding but I have found in my time there where things are and nothing is more than about a 25min drive.
Still having fun with "the farm".... but sliding away just a bit from thinking it is a long term, post-DW retirement home for us. The barn is a blast, but the house has been renovated inside so many times, there is virtually no old home character left. This leads to discussions with DW about knocking it down, leaving the barn, and building a new home closer to the lake.
And then there is this.
In 1994 I bought a 27.6 acre parcel of land about an hour north of where the farm is, from a co-worker simply as in investment. It was (in today's terms) dirt cheap. It is in an undeveloped NH land filing and the taxes on it are $18 annually (as long as I don't put a house on it). Over the years I have explored it corner to corner on my ATV, camped on it a few times. A couple years logging companies started reaching out to me about logging it for $$$. I found one I really liked and we worked a deal for them to take 60% or so of the trees in turn for making me a road that I could drive my truck to the top of the hill. We have 240 ft of vertical on the land, and I had never seen the view from the top until last month. I had high expectations, but it blew me away.
Now thoughts about maybe building a modest home up there, with palladium windows and a big deck with a hottub on it.
Just thoughts.
For now.
I have always said I would love a home with a 30+ mile view. Problem is DW values a home ON a lake more then that view (although she hasn't been up there in person yet since they logged it). Those discussions are just starting... lots to think about.
Pressure is since buying the lakehouse, cash is scarce and probably around 28% of our NW is tied up in equity in these 3 properties. So short term, one will need to be sold....
More on this story as it develops....
And then there is this.
In 1994 I bought a 27.6 acre parcel of land about an hour north of where the farm is, from a co-worker simply as in investment. It was (in today's terms) dirt cheap. It is in an undeveloped NH land filing and the taxes on it are $18 annually (as long as I don't put a house on it). Over the years I have explored it corner to corner on my ATV, camped on it a few times. A couple years logging companies started reaching out to me about logging it for $$$. I found one I really liked and we worked a deal for them to take 60% or so of the trees in turn for making me a road that I could drive my truck to the top of the hill. We have 240 ft of vertical on the land, and I had never seen the view from the top until last month. I had high expectations, but it blew me away.
Now thoughts about maybe building a modest home up there, with palladium windows and a big deck with a hottub on it.
Just thoughts.
For now.
I have always said I would love a home with a 30+ mile view. Problem is DW values a home ON a lake more then that view (although she hasn't been up there in person yet since they logged it). Those discussions are just starting... lots to think about.
Pressure is since buying the lakehouse, cash is scarce and probably around 28% of our NW is tied up in equity in these 3 properties. So short term, one will need to be sold....
More on this story as it develops....
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Markola
Thinks s/he gets paid by the post
Sure, since you invited, I’ll tune in. “Next season on “Hold My Beer, Watch This,” find out if our hero’s wife convinces him to sell the first one, to pay off the second one, before he starts the third one.”
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First, where am I with this whole 2 mortgage, 2nd home thing. It has been a lot of fun. DW LOVES it (and is WFH mostly here until at least 10/31). Financially it has worked, pretty much. Have not touched the portfolio, or that IRA "parked" in the home bank if we really need it. Have paid the 2nd home mortgage with the HELOC, and DW recently got a little raise, so we budgeted that much LESS to take from the HELOC to pay the mortgage going forward. 3.75% money.
I have done a LOT of low buck/high sweat projects at this lake house that have improved it dramatically, and raised its marketability a lot. Replaced an ugly kitchen floor with vinyl plank product, re-did the front porch, painted 2 of the upstairs bedrooms and did TONS of landscaping and view clearing. High sweat is fine, but I refuse to do any high dollar projects here.
DW asked me a few times "but do you LOVE IT here?". She does, but I can't say yes. I LIKE it a lot, have been having a lot of fun here this summer. Never thought I would enjoy a glass of wine on the dock on a summer evening as much... or even thought I would really ever own a dock. But I am confident that this was a sound investment and if/when we decide we are done with it, we will be able to sell quickly for a good amount. For now, good times.
Two milestones, DW has announced a retirement date of summer 2022, and we agreed to plan to sell our main home spring of 2023. What after that, who knows, but we could live at the lake if we wanted to, with downsizing our "stuff" quite a bit (which I think has to happen anyway). It is just too big and too expensive for just the two of us. Interestingly, our electric bills have been LESS at the lakehouse, even in hot summer months and running a couple good sized window ACs, than the main house which is empty. (a hottub, 2 fridges and a wine cooler is about all that spins the meter there when we are away.) Utilities are far less expensive here, as well as most other things, gas, food, etc.
The other (big) thing was a mental hurdle for me. I met with a realtor and a drone pilot at the other acreage/top of the hill we own (a 3rd property bought in '94 as an investment. Sorry, relying on all the previous posts here for those who aren't living my life vicariously, LOL) and we will list it for sale soon. I told a friend recently that "if my wife appreciated this view and the thought of living up here as much as I do, we'd at least have a foundation poured already." But she doesn't and values waterfront over a 20+ mile unlike I. That, and I wonder if I need a quarter mile uphill driveway at my age.....
I have done a LOT of low buck/high sweat projects at this lake house that have improved it dramatically, and raised its marketability a lot. Replaced an ugly kitchen floor with vinyl plank product, re-did the front porch, painted 2 of the upstairs bedrooms and did TONS of landscaping and view clearing. High sweat is fine, but I refuse to do any high dollar projects here.
DW asked me a few times "but do you LOVE IT here?". She does, but I can't say yes. I LIKE it a lot, have been having a lot of fun here this summer. Never thought I would enjoy a glass of wine on the dock on a summer evening as much... or even thought I would really ever own a dock. But I am confident that this was a sound investment and if/when we decide we are done with it, we will be able to sell quickly for a good amount. For now, good times.
Two milestones, DW has announced a retirement date of summer 2022, and we agreed to plan to sell our main home spring of 2023. What after that, who knows, but we could live at the lake if we wanted to, with downsizing our "stuff" quite a bit (which I think has to happen anyway). It is just too big and too expensive for just the two of us. Interestingly, our electric bills have been LESS at the lakehouse, even in hot summer months and running a couple good sized window ACs, than the main house which is empty. (a hottub, 2 fridges and a wine cooler is about all that spins the meter there when we are away.) Utilities are far less expensive here, as well as most other things, gas, food, etc.
The other (big) thing was a mental hurdle for me. I met with a realtor and a drone pilot at the other acreage/top of the hill we own (a 3rd property bought in '94 as an investment. Sorry, relying on all the previous posts here for those who aren't living my life vicariously, LOL) and we will list it for sale soon. I told a friend recently that "if my wife appreciated this view and the thought of living up here as much as I do, we'd at least have a foundation poured already." But she doesn't and values waterfront over a 20+ mile unlike I. That, and I wonder if I need a quarter mile uphill driveway at my age.....
Got really lowball offer on the undeveloped hilltop acreage last week, but it is not contingent on financing. Since we listed for a pretty optimistic price, we countered a "meet halfway" figure and stated no more negotiations/offers. If it goes through I'll net about a 7.8% CAGR on the investment (all after fees, cap gains tax, etc). It will put us in a better cash situation, allow us to replace one or two cars, give us cash to fix up the primary home for sale in '23, and allow us to pay the lake house mortgage easier.
Mentally, I am try to come up with a set of steps/milestones regarding where we go/live from here. DW is coming up with all kinds of wild ideas, but I am trying to come up with a plan that allows us to bail on the plans at any point if we want, and not take a bath financially. I have some ideas....
Anyway, here's a pic from a few days ago. Been having fun with my recently acquired drone. Fall colors were spectacular this year...
Mentally, I am try to come up with a set of steps/milestones regarding where we go/live from here. DW is coming up with all kinds of wild ideas, but I am trying to come up with a plan that allows us to bail on the plans at any point if we want, and not take a bath financially. I have some ideas....
Anyway, here's a pic from a few days ago. Been having fun with my recently acquired drone. Fall colors were spectacular this year...
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copyright1997reloaded
Thinks s/he gets paid by the post
Looks great. Wish I had a barn/storage building like that!
Signed a P&S on the undeveloped land on Sunday. (Financially) very happy. We'll pay off the HELOC, allocate a pile to pay (most of) the 2nd home mortgage until DW retires in '22, allocate $$ to fix up primary home to sell in '23, buy at least one new car in '21, etc. Good thing is that this parcel bought in '94 has never been on any retirement radar, so this transaction is just a big boost. Realtor was right, with this virus thing, people with money are popping up everywhere grabbing land well away from urban areas.
Now the question/discussions are, "what happens after '23"
?
Now the question/discussions are, "what happens after '23"
?Updating this saga. Closed on the land sell yesterday, funds wired to bank to day. A little bit of regret, but overall, financially a good move. We can backfill the lakehouse mortgage payments until DW retires, start downsizing the main home over the next couple years.
One thought that I am having is building a 2 car garage where the ugly shed is that I was going to tear down anyway at the lake house (lower right corner in the drone pic above, next to the barn). It is the one thing that is a "must have" for me to be able to live there full time. Yes, the barn basement is huge, but a damp dirt floor. I have 3 antique cars and do all of the normal maintenance on our daily drivers. The way I see it, building a garage with an asphalt ramp to it would be a good investment regardless of it is a short or long term property. DW still LOVES it and has WFH extended until at least March 31.
One thought that I am having is building a 2 car garage where the ugly shed is that I was going to tear down anyway at the lake house (lower right corner in the drone pic above, next to the barn). It is the one thing that is a "must have" for me to be able to live there full time. Yes, the barn basement is huge, but a damp dirt floor. I have 3 antique cars and do all of the normal maintenance on our daily drivers. The way I see it, building a garage with an asphalt ramp to it would be a good investment regardless of it is a short or long term property. DW still LOVES it and has WFH extended until at least March 31.
ivinsfan
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Outbuildings on lake lots or country places are pretty popular and could well add to it's value...As long as you are conscious of not "overbuilding" for the acreage. you should be fine. OTOH, if you would like something fancier for your hobbies it might pay to delay and see if the lake home feels like a kind of "forever" home. Then you could spend a little more money on your man cave..
Well I'll post/update and ask for opinions on the future of this. As some have seen, we are building a (very expensive) garage at the lakehouse in anticipation of selling the primary home next spring when DW retires also, and living at the lake full time. DW still talks a lot about knocking this 120 year old house down, leaving the barn and garage, and building new one. I have decided not to make a decision on my approach until we sell the primary home ...but....
First of all, it would be no crime to knock this house down. It has been renovated/modified so many times, there is not a shred of old house character left in it anywhere, save from some wide pine board floors in one bedroom. The original fireplace has been walled over somewhere, there are 5 layers of flooring on the main floor, it has aluminum siding, windows from the 60s and 90s, and there is not a true right angle anywhere to be found. The field stone foundation has been patched and "re pointed" many times, and is crumbling in other areas. The barn is leaning by about 2 degrees into the house (it is attached) and concern about whether the barn can hold itself up on it's own if the house is removed. But it is "functional".
The "talk" is about building a new free standing house closer to the lake (thus, the barn would not be required to meet house fire codes, which it would not).
So in my head, I came up with 2 possible paths. 1) Sell the primary home, pay off the lake house mortgage, and have a good pile of cash leftover. Sight a 5-10 year horizon of living at the lake. Allow ourselves a budget of $60k or so to "Fix up" a few things in the old house that we really don't like, good resale investment things, but nothing major like moving walls, huge additions, etc.
2) Knock the house down and rebuild. Hire a structural engineer to look at the barn-lean thing (I really feel like it is not a big issue based on a few observations). Find another place to live while he house is built (3000 sf of storage space in the barn to store stuff). And the 1973 septic system would have to be replaced as soon as an excavator sinks a bucket anywhere in this property. It is amazing it still works today. Town Hall has no "as Built" documents on it, lost in a fire decades ago, and we don't really even know exactly where it is. BUT. A brand new house, built to what we want (but not grand, 1800-2000sf), and no old house problems. And a 10-20 year time horizon, our forever home (I turn 60 next year)
So, a few weeks back, a made a spreadsheet comparing the financial outcomes of each option.
Wow.
Here is the summary:
Option 1:
Mortgage: None
Lake House Investment Position: Great, assuming good market, underinvested
Cash on hand from primary home sale: Plenty
Home: Still old, and not ideal, but functional.
Improvement Opps: Stout budget to fix things that are fixable.
Future Options: Great, assuming good market, could get out and walk away with large sum to to the next homestead/adventure
Option 2:
Mortgage: Modest one. Not in the present retirement budget, but could be made to workLake House Investment Position: Overinvested, potentially by a lot
Cash on hand from primary home sale: Not much at all
Home: Brand New! Full solar(?). Exactly what we want, no old house issues!
Improvement Opps: Don't need any.... but probably should budget for unforeseen "Wants"
Future Options: Limited. Will be lots of pressure to stay even if we want to move on, knowing that we are overinvested and would take a bath if we sold it.
The more I think about it, the more I know what I am leaning toward. And I showed DW the option 2 numbers and she said "Oh. Yeah." But then there is this thing at our ages of maybe you don't always do what makes the BEST financial sense, but what you WANT at this point in our lives. OTOH, huge for me, is preserving options.
And then there is this, whether you choose #1 or #2, once you have, there is no going back...
Thoughts?
First of all, it would be no crime to knock this house down. It has been renovated/modified so many times, there is not a shred of old house character left in it anywhere, save from some wide pine board floors in one bedroom. The original fireplace has been walled over somewhere, there are 5 layers of flooring on the main floor, it has aluminum siding, windows from the 60s and 90s, and there is not a true right angle anywhere to be found. The field stone foundation has been patched and "re pointed" many times, and is crumbling in other areas. The barn is leaning by about 2 degrees into the house (it is attached) and concern about whether the barn can hold itself up on it's own if the house is removed. But it is "functional".
The "talk" is about building a new free standing house closer to the lake (thus, the barn would not be required to meet house fire codes, which it would not).
So in my head, I came up with 2 possible paths. 1) Sell the primary home, pay off the lake house mortgage, and have a good pile of cash leftover. Sight a 5-10 year horizon of living at the lake. Allow ourselves a budget of $60k or so to "Fix up" a few things in the old house that we really don't like, good resale investment things, but nothing major like moving walls, huge additions, etc.
2) Knock the house down and rebuild. Hire a structural engineer to look at the barn-lean thing (I really feel like it is not a big issue based on a few observations). Find another place to live while he house is built (3000 sf of storage space in the barn to store stuff). And the 1973 septic system would have to be replaced as soon as an excavator sinks a bucket anywhere in this property. It is amazing it still works today. Town Hall has no "as Built" documents on it, lost in a fire decades ago, and we don't really even know exactly where it is. BUT. A brand new house, built to what we want (but not grand, 1800-2000sf), and no old house problems. And a 10-20 year time horizon, our forever home (I turn 60 next year)
So, a few weeks back, a made a spreadsheet comparing the financial outcomes of each option.
Wow.
Here is the summary:
Option 1:
Mortgage: None
Lake House Investment Position: Great, assuming good market, underinvested
Cash on hand from primary home sale: Plenty
Home: Still old, and not ideal, but functional.
Improvement Opps: Stout budget to fix things that are fixable.
Future Options: Great, assuming good market, could get out and walk away with large sum to to the next homestead/adventure
Option 2:
Mortgage: Modest one. Not in the present retirement budget, but could be made to workLake House Investment Position: Overinvested, potentially by a lot
Cash on hand from primary home sale: Not much at all
Home: Brand New! Full solar(?). Exactly what we want, no old house issues!
Improvement Opps: Don't need any.... but probably should budget for unforeseen "Wants"
Future Options: Limited. Will be lots of pressure to stay even if we want to move on, knowing that we are overinvested and would take a bath if we sold it.
The more I think about it, the more I know what I am leaning toward. And I showed DW the option 2 numbers and she said "Oh. Yeah." But then there is this thing at our ages of maybe you don't always do what makes the BEST financial sense, but what you WANT at this point in our lives. OTOH, huge for me, is preserving options.
And then there is this, whether you choose #1 or #2, once you have, there is no going back...
Thoughts?
RetireeRobert
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What about coming up with options #3, #4, and #5? You do not sound entirely comfortable with either option #1 or #2. Maybe other options present at a different waterfront acreage property.
Sunset
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
If you choose #1, you can still decide X yrs later to do #2.
Well of course you *could*, but it would make no sense to me to drop $30k+ for example in moderate renovations like bathroom re-fit, kitchen countertops, new windows, etc as an example.... only to tear it down a couple/few years later.
As for other options, as a friend had proposed, MAJOR re-work of the structure for hundreds of thousands ..... I absolutely would not do. You'd have spent almost as much as knocking down and building new, and you'd STILL have the bones of an old house on a crumbling foundation.
I have said that there are lots of similarities between and old house and an antique car. There are only two options.... make it functional and live with, and enjoy it the way it is, or tear it all the way down and start from the ground up and fix everything.
To me the best option is to have an option to sell it *if* we decide it isn't right any more, and have the equity to go do something else, and pay cash for it. I am leaning toward #1.
If you can afford number 2 that is what I would do.
Yeah it will probably cost you another 4-500 k to build that house but it will be all new, energy efficient, nicely appointed etc. and you can still have the character from the old barn(I love old barns) and have a great waterfront location. However ultimately you really have to love the location and commit to it else you will probably be upside down if you sell. Basically the "very very very " unique opportunity you talked about earlier in this thread is that you then paid, what 300,400,500k or more for a waterfront lot.
Perhaps that is why no one else bought it? You admitted that the house is a real hodgepodge of old, mismatched styles and all the character was beat out of it. So you both really need to love the location to do this. By the way it does look like a great setting and looks pretty private too?
Oh I just realized that you were the one putting in a 75k garage there. That may mean you are already committed to it
Having said all that, I realize you bought it 2 years ago and with the present crazy sellers market you could probably unload it right now for a nice profit?
Yeah it will probably cost you another 4-500 k to build that house but it will be all new, energy efficient, nicely appointed etc. and you can still have the character from the old barn(I love old barns) and have a great waterfront location. However ultimately you really have to love the location and commit to it else you will probably be upside down if you sell. Basically the "very very very " unique opportunity you talked about earlier in this thread is that you then paid, what 300,400,500k or more for a waterfront lot.
Perhaps that is why no one else bought it? You admitted that the house is a real hodgepodge of old, mismatched styles and all the character was beat out of it. So you both really need to love the location to do this. By the way it does look like a great setting and looks pretty private too?
Oh I just realized that you were the one putting in a 75k garage there. That may mean you are already committed to it
Having said all that, I realize you bought it 2 years ago and with the present crazy sellers market you could probably unload it right now for a nice profit?
If you can afford number 2 that is what I would do.
Yeah it will probably cost you another 4-500 k to build that house but it will be all new, energy efficient, nicely appointed etc. and you can still have the character from the old barn(I love old barns) and have a great waterfront location. However ultimately you really have to love the location and commit to it else you will probably be upside down if you sell. Basically the "very very very " unique opportunity you talked about earlier in this thread is that you then paid, what 300,400,500k or more for a waterfront lot.
Perhaps that is why no one else bought it? You admitted that the house is a real hodgepodge of old, mismatched styles and all the character was beat out of it. So you both really need to love the location to do this. By the way it does look like a great setting and looks pretty private too?
Oh I just realized that you were the one putting in a 75k garage there. That may mean you are already committed to it
Having said all that, I realize you bought it 2 years ago and with the present crazy sellers market you could probably unload it right now for a nice profit?
Yes, that is the way I am looking at it: We would basically be building a new house on a ~$480k lot. Even if it cost $400k, we would be WAY over invested.
We did have the realtor over a few weeks back and she said in today's market, this house/property (with the improvements I have made, mostly in landscaping/tree work to improve the view) would sell quickly in the mid 500s, so we are in a good position now.
It is a very large and private waterfront lot and the barn is very cool. I like it a lot, not sure if I LOVE LOVE it though...
Well at least you could probably get the cost of that new garage back in a sale. What would it take you to love it? You can't change the location obviously but only the house itself. Do you have to "love it" or is really liking it good enough.
I don't think there is such thing as a perfect property although we actually do love ours. Of course there are the cold hard #'s. Did you discuss with the realtor what it would be worth with a brand new 400k house on it? If it only goes from the estimated mid 500's to the mid 600's that would be pretty tough unless you really then "loved it" and could see yourselves staying there for good. I love the whole new construction process and designed and built our own house 23 years ago that we still love, actually even more than when we started so we are very lucky. Plus I got exactly what we wanted. Energy efficiency, sited very nice, aesthetics that we wanted and a construction style (timberframe) that we always dreamed about. That is a very good feeling and we still appreciate that every day we are here.You definitely have a little dilemma to resolve. Good luck
Too be honest, I am not sure what I want long term. DW will retire next year and I want her to get a sense of retired life before we choose where we go, what we do. Also, there is a lot of landscaping upkeep here and while I could handle it for 5-10 years, not sure if I want to do it (or even pay someone to do it) for 15-20 years.
RetireeRobert
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Sounds like you are open then to some options #3, #4, or #5. Find a different waterfront property. because you are not really happen with either option #1 or #2 on this property.
ivinsfan
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JMO as some one who has seen way to many friends stick money into an old house.
Don't put anymore cash in the lake house. Either live with it, sell it or build new onsite.
Don't put anymore cash in the lake house. Either live with it, sell it or build new onsite.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You sound like us 11 years ago. We demolished our old "camp" and rebuilt a ~2000 of home just before retiring. We enjoyed it for about 5 years and had season passes to a couple nearby ski areas, snowmobiles, etc.
But we quickly tried of New England winters and started wintering in Florida and now snowbird. While I enjoy our year-round lakefront home, now that we snowbird I would be quite content with a 3-season camp on the lake.
Some good friends of ours retired at the same time and did the same thing... built a nice lakefront home for retirement but later became snowbirds and somewhat regret the big house.
Would it be possible or feasible to convert the barn to living space?
But we quickly tried of New England winters and started wintering in Florida and now snowbird. While I enjoy our year-round lakefront home, now that we snowbird I would be quite content with a 3-season camp on the lake.
Some good friends of ours retired at the same time and did the same thing... built a nice lakefront home for retirement but later became snowbirds and somewhat regret the big house.
Would it be possible or feasible to convert the barn to living space?
