If you had $4M, would you spend $2M of it building a house?

[rmcelwee]

Debt free, fairly frugal, and FIRED. We are close to building our dream home and it suddenly hit me that we may be spending half our money on it. I have $1M in cash, $1M in 401K fixed fund, and $2M in S&P based equities (mix of Roth, 401K, and brokerage). We are 57YO with no source of income other than a small pension that only pays for our healthcare. The plan is to spend the $1M in cash to get the house started (dried in) and hopefully sell some stocks or fixed next year to pay for the rest of it. I find it hard to believe that we can't get by on $2M but I figured I would ask around. The house will be extremely energy efficient and on solar power. We are in LCOL east TN.

 

[MC Rider]

I would not. I don't need such a big place. Or have $4M.

Try running retirement calculators with $2M instead of $4M. Maybe $1M if the house goes over budget. Include the expense for maintaining this thing.

 

[Montecfo]

It would be tough for me to do that.

But I have similarly struggled with how much to spend on RE. No conclusions yet.

And I would worry about scope changes and surprises making it worse.

 

[stepford]

How big a place does $2M buy you in LCOL East TN?

 

[MC Rider]

And I would worry about scope changes and surprises making it worse.

Don't worry. Just plan for it to be more expensive that you think.


Would something more like 1/4 of your stash work? You said LCOL are, I'd think $1M or so you could build a palace. But I will take the Sgt Schultz defense. I know nothing!

 

[Qs Laptop]

No, but I would consider spending $1M on my dream house if I had $4M.

I would think $1M in eastern TN in a low cost of living area would buy plenty of house. How much of the $2M is in land?

 

[MarieIG]

I have been waiting for your update on "The Bunny Ranch."

It all depends upon how the remaining funds will support the ongoing lifestyle/ budget. Personally, with those specs. and without more information, I would try to rough it in a $750k - $1M house.

 

[MC Rider]

How big a place does $2M buy you in LCOL East TN?

Because $2M could be land value in some places. And not for acres. Maybe 1/2 acre.

 

[rmcelwee]

I have been waiting for your update on "The Bunny Ranch."

It all depends upon how the remaining funds will support the ongoing lifestyle/ budget. Personally, with those specs. and without more information, I would try to rough it in a $750k - $1M house.

I didn't think anyone cared about updates but maybe I will post one. Sorry for keeping you waiting! Lack of money has kept the progress slow. The house will be 4200 sqft with three separate ICF buildings stuck together (concrete and foam). Outer walls are 10" thick. I'm thinking $250 per sqft to dry in ($1M) but then start adding in the pool, solar, deep well, and furnishings and things really add up fast.

 

[rmcelwee]

Don't worry. Just plan for it to be more expensive that you think.


Would something more like 1/4 of your stash work? You said LCOL are, I'd think $1M or so you could build a palace. But I will take the Sgt Schultz defense. I know nothing!

The ICF home construction will be more expensive than a regular stick built house.

 

[rmcelwee]

No, but I would consider spending $1M on my dream house if I had $4M.

I would think $1M in eastern TN in a low cost of living area would buy plenty of house. How much of the $2M is in land?

We have already purchased 30 acres so $0.00

 

[RetiredHappy]

I would not spend $2M out of $4M on building a home. But you have done the Math that $2M is enough to support your retirement expenses. Enjoy the process and the new home.

 

[MC Rider]

You probably know that GLA (gross living area) does not include garages, rooms with no access from the house interior, outdoor spaces etc. So if the house by itself is 65x40 and 1 story you have 2600 SF of GLA. Plus garage and clean shop and.......

By all means keep us informed on your project. Only 2 bedrooms?

 

[MC Rider]

The ICF home construction will be more expensive than a regular stick built house.

I'm a bit surprised at that.

We have already purchased 30 acres so $0.00

OK. But we want to know the land cost anyway.

 

[Ronstar]

I would spend $2m on a house if I found the perfect property and I was sure that the remaining $2m would last me the rest of my life.

But I’m not sure that the perfect property for me exists at $2m.

 

[RetiredHappy]

What is the purpose of the clean room?

 

[Tom52]

No, in my case having $4 million I would not spend $2 million on a house. I would like to buy a cabin in the mountains of east Tennessee but I can't find anything decent with a mountain view for less than $750k. That is to rich for me for a second home.

I probably could maintain my current lifestyle with $2 million but I need a chunk in reserve in case either of us need it for LTC. We don't want to be a burden on our daughter. If we don't need it in the end then daughter is welcome to it.

 

[rmcelwee]

I'm a bit surprised at that.



OK. But we want to know the land cost anyway.

The house, being three separate concrete buildings with internal concrete walls, will take approximately four million trucks of concrete (or maybe less, I have no idea ) and that will be the majority expense. You pay a ton of money for the lego blocks and even more for the concrete. One of our general contractors estimated $275 a square a week ago. This is just to dry it in.

I had to look up the price of the land. It was $170K for 31 acres of heaven. People down the hill from us are paying $10K per acre now so we did well.

 

[rmcelwee]

By all means keep us informed on your project. Only 2 bedrooms?

Neither of us have siblings nor friends . Also, elderly parents who won't come to visit. The second bedroom is probably a waste but I am a night owl and sleep in a separate bed 10% of the time so I don't wake my wife (or have to listen to her snore).

 

[rmcelwee]

What is the purpose of the clean room?

There was originally a dirty room (welding, wood work, etc) and a clean room (soldering, reloading ammo, repairing arcade machines, etc). We decided that due to the high cost per square foot we would just move dirty to the 30x55 metal building and build another 30x60 metal building for our tractor shed. I will spend the rest of my life looking out the 10' window in "clean" watching deer and turkeys walking around while I do my computer "experiments" and work on my laser engraving and 3D printing.

 

[rmcelwee]

I probably could maintain my current lifestyle with $2 million but I need a chunk in reserve in case either of us need it for LTC.

We have $375 in an HSA so we are probably good. DW also has a shotgun and an excavator so she can put me out of my misery and bury me for next to free!

 

[MarieIG]

We have $375 in an HSA so we are probably good. DW also has a shotgun and an excavator so she can put me out of my misery and bury me for next to free!

You sound like my DH. I told him he CANNOT ask one of his sons to shoot him.

 

[RetMD21]

I always liked the idea of ICF houses. If you can live off the remaining money why not get the dream house. OTOH I have had friends who moved to get rid of a pool. I know that you don't care about resale value but the more unusual your dream house the less marketable.

 

[rmcelwee]

I always liked the idea of ICF houses. If you can live off the remaining money why not get the dream house. OTOH I have had friends who moved to get rid of a pool. I know that you don't care about resale value but the more unusual your dream house the less marketable.

Three months before I FIRED one of the guys who worked for me was filling in his pool so he could sell his house. He believed it was dragging the value down. DW has always wanted a boat and I told her that I would just pay someone $1500 a day to rent theirs. She's never taken me up on that. Point being, I'm pretty sure what is going to happen is she will use the pool 10 times in the first month and then never use it again. Still, this will be our last home so the worst that happens is we will have a nice place to skateboard!

 

[street]

I would not spend that money on a house. If there was a large junk of land with it and the land had most of the value in that price I might consider it. Have to be a lot of land for me to pay 2M.