Author Topic: Recently Married, Back for More Advice - Please Help!  (Read 2266 times)

cysewr

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Recently Married, Back for More Advice - Please Help!
« on: April 14, 2021, 10:32:54 PM »
Hey Guys,

Iím hoping that you all can (once again) provide some advice for the next steps in my familyís financial future. My wife (30 yo) and I (32) were married about 4 months ago, and just learned that we are expecting our first child. In other words, shit is getting real. I've been pretty good about saving for retirement and a house downpayment since I graduated from college almost 5 years ago (I've posted here asking for advice several times, and my progress has been pretty steady). That being said, I have only been a renter since I graduated, and am starting to feel depressed and defeated regarding the housing market. I understand that fear is a terrible reason to make important decisions, which is why I'm looking for some detached perspective from you all.

Let me provide a little more information on our financial situation:

Location: Spokane Valley/Liberty Lake, WA
Income: I make $85k, about to get a raise to $90k. Wife makes about $40k. She will stay home once the baby arrives.

401k - $80k (currently contributing the maximum to mine)
Roth IRA - $60k (maxing out mine here as well)
HSA - $16k
Cash - $65k (this is mostly a combination of emergency fund and an eventual down payment for a house. We are contributing around $2k/month to this fund currently).

The plan has been to be patient and save up a 20% downpayment for a house (or as close to it as possible before outgrowing our 2 BR/ 2 BA apartment, likely in a year or two), but it seems like cash is becoming an increasingly unwise position to hold, especially given the fed's/government's fiscal policy that is propping up the housing market.

Eventually, we would like to build a house on some acreage in the country that my parents have offered to sell us at a significant discount, but we recognize that we arenít in a position to do that yet (and arenít even close). We would like that eventual house to be on the simple side (not huge), but well-built and well-designed. In the meantime, we are trying to decide what the best course of action is regarding housing - i.e. do we buy a small ďstarter house,Ē buy a house meant as a rental, perhaps a duplex (though my wife is slightly less keen on this course of action)Ö or do we just continue to be patient and save (and if so, should we be holding the entire down payment in cash?)? I feel like we are falling further and further behind, despite our efforts at saving for the future. I guess a big part of the question is whether what I am feeling is more of an emotional reaction (fear), or a rational position based on larger economic trends happening in the country (i.e. mortgage for real estate as a means of shorting the dollar).

A final piece of information: I recently passed the exam required for my professional license, and now have a good bit of spare time available. I am trying to figure out what the best way is to spend my newfound free time. More specifically, starting a side business, or working on the side with some contractor friends to learn hands-on skills, that could perhaps come into play down the road in a home-building scenario (my job allows for some flexibility, e.g. working 4-10's, and Saturdays are fair game).

Thank you all in advance for any input that you can provide. I have always found the advice on this forum to be thoughtful and well-reasoned, and appreciate the time that any of you take to respond.

FLBiker

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #1 on: April 15, 2021, 07:54:52 AM »
I'm not familiar with that area, so I don't have very specific advice, but I would encourage you not to worry too much about it.  By living within your means and saving money, you're already ahead of the game.  You could easily have one kid in a 2 bedroom apartment if it came to it.  We got a house before our daughter was born, but we would have been fine for a while even in our 1 bedroom apartment (granted, I wasn't working from home then, but still).

That said, if you're financially ready to buy a house (i.e. have the money for a down payment and the income to cover mortgage and maintenance) and you find one you like, having a kid is often a good impetus to jump into home ownership.  It isn't a prerequisite, though.

Again, not knowing your market, I can't really give specific house buying advice.  Personally, though, I don't think in terms of "starter" homes -- I would prefer to only buy a house if I could imagine staying there forever.  And, again personally, I'm not interested in being a landlord, and I'm especially not interested in sharing a space (i.e. a duplex) with a tenant.  I'm pretty antisocial, though, so YMMV. :)  I guess what I'm saying is I'd stay in an apartment that you both like rather than buy a house that you don't really like.

Finally -- re: your last comment about having free-time.  Take advantage of that as you'd like for the next several months, but recognize that this will change once the baby is born. :)

legalstache

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #2 on: April 15, 2021, 09:37:15 AM »
How much would a house that you and your wife would be happy with cost in your area? What's your approximate timeline for when you'd want to build your house on acreage?

I would think with your income/assets you'd be competitive for single family homes in your area. I would not buy a duplex or a rental-type house. I don't see a huge issue with buying a house that you'd stay in for 5+ years before building your ultimate house. Is doing it that way the most mustachian thing possible? Probably not. But I think it's a totally reasonable option.

Botany Bae

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #3 on: April 15, 2021, 10:19:53 AM »
I sold a home in Spokane 19 months ago at a value much inflated over what we had purchased it at 10 years prior. I checked the value of the home -- it sold a month ago for 130K over what we sold for. The Spokane market is out of control and as of right now it is unsustainable. There is a lot of speculation buying going on thanks to the Amazon expansion in the area, as well as a few other industries moving in. I no longer live in the area, but have friends and family that do and it seems like the rental market it also a bit out of control. There isn't enough housing for the amount of people moving to the area right now. According to my mother, there is also a recent influx of people from Idaho into the area due to a lack of housing there as well.

Don't buy from fear, but as legalstache pointed out, start looking at purchase options. Keep an ear to the ground and be ready to put in an offer if a good property pops up. Don't get sucked into a ridiculous bidding war at this point, though. The market will likely cool in the area once the covid migration/amazon influx slows and housing supply increases to meet demand. Unlike western WA, the east side still has plenty of room left to build, so eventually home supply will increase substantially.

Another data point -- eastern WA has a very large aging population. A population that will be aging out of their large, single family homes over the next decade. Generational neighborhood turnover was already on the rise when we moved, and it will continue to do so. This may also begin to free up some real estate.

Laura33

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #4 on: April 15, 2021, 10:22:15 AM »
Don't rush into house worry.  You have two big changes on the way:  a new baby, with all its attendant expenditures and changes in priorities; and losing 1/3 of your income.  You're fine where you are now for the foreseeable future.  So focus your energies on figuring out what works for your new life -- is your wife happy staying home or will she want to go back to work; how does the monthly budget feel without her salary; how do the changes affect your FIRE date; do you want more kids; etc.  Living the life you want is more important than living a life you don't want in a pretty setting. 

FWIW, it is totally 100% normal to feel the need to Figure Things Out and get your planned life settled and squared away when you have a kid on the way.  So let me be the first one to tell you:  you don't have to decide everything right now; in fact, the whole concept of having things all figured out is just a mirage that's more likely to lock you in to something that doesn't actually serve you long-term.  Financial flexibility is the best gift you can give yourselves right now. 

fraylock

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #5 on: April 15, 2021, 10:25:38 AM »
Great work setting yourself up for financial success, and congrats on the kiddo!

Try to not allow yourself feel a sense of urgency about the housing market.  You can bide your time, and keep an eye on the market.  If it makes sense to buy based on your life circumstances, and if it makes sense financially, go for it, but otherwise there is nothing wrong with continuing to rent.

Regarding the free time, I wouldn't commit to anything long term.  I'm about 3-4 years ahead of you in family building and have two young kids.  Speaking from experience, your life changes drastically after having the first child, and in a few months that free time will be non-existent. 

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #6 on: April 15, 2021, 11:45:02 AM »
As always, you guys are super helpful - thank you.

@FLBiker - We aren't in a rush (or at least know that we shouldn't be on account of the incoming kiddo). I think we can hold out for a year or two. We are both pretty frugal (though not by Mustachian standards haha), and are willing to be patient IF it is the right move. I just get worried feeling like the purchasing power of the cash I have been working so hard to save is deteriorating.

@legalstache - I think a single-family home that we would be ok with for the medium term (5 years minimum) would cost around 350k right now. Maybe even more the way prices are skyrocketing. I think 5-8 years is probably when we would like to build, unless we can find a way to do it for a more reasonable price (e.g., is there a way to do something a little more modular).

@Botany Bae - So helpful to hear some perspective from someone who knows the Spokane market. I just can't wrap my head around the growth in the housing market here... it's not like this is a big hub for employment... retirees maybe? And North Idaho's prices are higher still, even with a state income tax!

@Laura33 - My wife has always wanted to be a SAHM. She would like to find some way to bring in some income after she quits her day job, but I obviously can't rely on that. We definitely would like more kids, and that's part of the appeal of acreage. We would prefer the land with a simpler/smaller home if that is the choice we eventually have to make, but would prefer to be patient and build something nicer down the road.

@fraylock - Thank you for the input. Anything I take on as a side project would definitely need to be flexible.

ChpBstrd

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #7 on: April 15, 2021, 01:10:57 PM »
It sounds like house prices are accelerating faster than you can save a down payment for them. For example, to buy @Botany Bae 's house that increased $130k, you would have had to save up 130k*.20= $26,000 more just for the higher down payment in a year and a half! That's $17,333 per year just to keep up with down payments! Unsustainable indeed. Why play this game of financial chicken, when you could live a mustachian lifestyle and be millionaire apartment dweller by the time the kid turns 7, AND be poised to take advantage of any potential price collapse rather than getting destroyed by it.

A 2BR apartment has a bedroom for you as a couple and another for the kiddo, right? If so, it sounds like you have what you need. If the lifestyle you want is overpriced, consider moving to a LCOL area where things are not insane. There's a really cool 3BR craftsman bungalow with garage in my neighborhood for sale at $130k. And it's not likely to drop $130k in value if mortgage rates rise, lol!

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #8 on: April 15, 2021, 01:30:57 PM »
@ChpBstrd - In your apartment scenario, what would you recommend doing with the cash in the meantime?

Our current apartment will definitely work for a while, but WFH means I need a desk in the room being used as an office, so that eats up some of the space. We are hoping for more kids, so I see ~2 years as the upper limit for remaining in our current apartment. Moving to another area is always a possibility, but our families both live here, and we both love the area. I realize that that limits our options.

deborah

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #9 on: April 15, 2021, 01:43:08 PM »
Things change a lot between theory and actuality. Iíve had friends who were going to be SAHPs before the baby arrived, and after a year decided that work gave them desperately needed adult time, while others intended to come back to work straight away and ended up as SAHPs.

It seems to me that if youíre going to be moving into your forever house in a bit over five years, itís probably not worth moving before that. You should be able to live in a 2 bedroom apartment until then - your child wonít be at school yet. You could win, and have bought a house worth a lot more than it is now, or the housing bubble could burst and youíd be worse off - delaying your forever house. Your timing seems good, as your kid could start school where theyíll be for their entire schooling.

You should also think about investing your money rather than having it in a bank.

slappy

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #10 on: April 15, 2021, 01:46:36 PM »
@ChpBstrd - In your apartment scenario, what would you recommend doing with the cash in the meantime?

Our current apartment will definitely work for a while, but WFH means I need a desk in the room being used as an office, so that eats up some of the space. We are hoping for more kids, so I see ~2 years as the upper limit for remaining in our current apartment. Moving to another area is always a possibility, but our families both live here, and we both love the area. I realize that that limits our options.

Why two years?

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #11 on: April 15, 2021, 02:14:22 PM »
@ChpBstrd - In your apartment scenario, what would you recommend doing with the cash in the meantime?

Our current apartment will definitely work for a while, but WFH means I need a desk in the room being used as an office, so that eats up some of the space. We are hoping for more kids, so I see ~2 years as the upper limit for remaining in our current apartment. Moving to another area is always a possibility, but our families both live here, and we both love the area. I realize that that limits our options.

Why two years?

Because I suspect that would be about the time kid #2 would arrive and put a real squeeze on available space. Lots of underlying assumptions, I know.

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #12 on: April 15, 2021, 02:19:42 PM »

It seems to me that if youíre going to be moving into your forever house in a bit over five years, itís probably not worth moving before that. You should be able to live in a 2 bedroom apartment until then - your child wonít be at school yet. You could win, and have bought a house worth a lot more than it is now, or the housing bubble could burst and youíd be worse off - delaying your forever house. Your timing seems good, as your kid could start school where theyíll be for their entire schooling.

You should also think about investing your money rather than having it in a bank.

That makes sense about the 5 year timeframe, given the costs associated with buying/selling. If I felt confident that the market wasn't going to leave us completely behind (this feels completely different than the leadup to 2008 in a some important ways), I would be a lot more at ease with waiting.

Do you have suggestions on where to invest the cash?

ChpBstrd

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #13 on: April 15, 2021, 02:35:53 PM »
@ChpBstrd - In your apartment scenario, what would you recommend doing with the cash in the meantime?

Our current apartment will definitely work for a while, but WFH means I need a desk in the room being used as an office, so that eats up some of the space. We are hoping for more kids, so I see ~2 years as the upper limit for remaining in our current apartment. Moving to another area is always a possibility, but our families both live here, and we both love the area. I realize that that limits our options.

1) For me, it would be 100% VTI. For you, it depends on your stomach for watching numbers go up and down and resisting the "sell" button when they go down.

2) Have you considered finding a 3BR apartment when the need arises? Or you might rent a condo/house from one of these real estate speculators who is suffering negative cash flow in an attempt to make capital gains on a property. Here's a kinda unusual option: Find an elderly person or couple in a big house who needs the financial or physical help, and basically colonize their home in exchange for rent, maintenance, cleaning, and misc. assistance. Ask your friends, family, and coworkers if they know anyone who might be interested. Living with a rowdy young family for the next couple of years might be a better lifestyle for some than an old folks home. It would definitely be a relationship of trust, but it could be the perfect arrangement for a house-poor elder who doesn't want to leave. My 80+ y/o inlaws with a 70-year-old 3,000 sf. 4/3 house are exhibit A. They swear they'll leave that house feet first, and the fam is very concerned about them falling or being unable to keep the house in good shape.

legalstache

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #14 on: April 15, 2021, 02:50:33 PM »
Personally, I would say go for it on a 350k house in your area with your income. I live on the other side of the mountains from you where housing is a lot more expensive, so that might be affecting my thinking, but those prices sound like a steal to me.

My wife and I are a couple years older than you and your wife and we had kid #1 two years ago. We bought while pregnant and while our house seemed a little pricey at first, the stability of owning while having a young child was worth a lot. Of course, we've benefited from insane appreciation and being able to refinance, so our house looks like a steal in hindsight, which is probably also coloring my view.

Things are going to be hectic and crazy with your first kid though. I think you'd get a lot of value from having your housing situation figured out. Renting can also be pretty variable--unless you've got a great situation with a landlord you know won't sell or raise the rent a ton, I feel that renting is a little precarious. I also don't think it's realistic to rent for the next 5-8 years with likely two kids while waiting to build your dream home.

It's all about trade offs, though. Some other posters seem to have a much higher comfort level with renting, and I'm not the most mustachian person on this board. I do view a house as a consumption item and I certainly recognize that from a pure financial perspective, renting might make more sense. But I think if you can commit to staying in any house you buy for 5+ years you hedge your bets against a big drop in prices after you buy.


ETA: What is the rental market like in your area? Where I live, it's competitive and there aren't a lot of good options for families. Obviously, if rentals are plentiful in your area but buying a house is tight, that would tilt towards renting. But I'm gonna go ahead and assume the rental market is tight too.
« Last Edit: April 15, 2021, 02:57:27 PM by legalstache »

slappy

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #15 on: April 15, 2021, 02:57:58 PM »
Personally, I would say go for it on a 350k house in your area with your income. I live on the other side of the mountains from you where housing is a lot more expensive, so that might be affecting my thinking, but those prices sound like a steal to me.

My wife and I are a couple years older than you and your wife and we had kid #1 two years ago. We bought while pregnant and while our house seemed a little pricey at first, the stability of owning while having a young child was worth a lot. Of course, we've benefited from insane appreciation and being able to refinance, so our house looks like a steal in hindsight, which is probably also coloring my view.

Things are going to be hectic and crazy with your first kid though. I think you'd get a lot of value from having your housing situation figured out. Renting can also be pretty variable--unless you've got a great situation with a landlord you know won't sell or raise the rent a ton, I feel that renting is a little precarious. I also don't think it's realistic to rent for the next 5-8 years with likely two kids while waiting to build your dream home.

It's all about trade offs, though. Some other posters seem to have a much higher comfort level with renting, and I'm not the most mustachian person on this board. I do view a house as a consumption item and I certainly recognize that from a pure financial perspective, renting might make more sense. But I think if you can commit to staying in any house you buy for 5+ years you hedge your bets against a big drop in prices after you buy.

Are you a realtor? This seems almost like scare tactics. You are right that OP can get value from figuring out the home situation, but that could certainly mean continuing to rent. Variability could also mean flexibility, especially since the OP's wife plans to stop working after the birth of the child. There is no reason to believe that renting is precarious. Why would it not be realistic to rent with two kids? Literally millions of people do exactly that. As you say, it seems like your experience is really coloring the guidance here.

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #16 on: April 15, 2021, 03:12:19 PM »
This is all helpful commentary for me - I like the diversity of opinions.

Just for reference, our current rent is about $1400/month. It is a decently nice apartment, above average but not high end by any stretch. We are happy here for the time-being, but having some sort of plan means a lot to my wife.

@ChpBstrd - I think we would probably start to look at renting a house if we get outgrow the apartment before we are ready to buy. But I agree that being flexible and open to different options can be extremely helpful.

seemsright

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #17 on: April 15, 2021, 03:18:13 PM »
owning a house is stupid expensive. About the only thing I like about it is I can change the paint color if I want. Other than that I get to deal with things breaking, things needing to be fixed. Over all it is just a PITA.

Hubby and I have a almost 11 year old. I FIRED the day she was born. The first 5 years of her life was hard, it was hard on our marriage, (we waited 10 years to even get pregnant so we were not newlyweds) I highly suggest to remove all stress, and stay where you are. babies do not need much. I do not think starting a side gig would be the best idea unless your wife is way on board and the baby is beyond easy, sleeps all of the time, does not fuss, and does exactly what you need it to do when you need to.

Babies, toddlers, and preschoolers are easy and cheap, you can buy all of their stuff used, they are happy with the cardboard box, junk mail and some crayons. Now my 10 year old...I am glad we saved all of the money we did while she was little, the amount of food, clothes and shoes she is going through...I am having to buy her new clothes every few months, and shoes...she destroys them before she outgrows them. then I buy her new ones and then outgrows them the next week.

Take your time buying a house. Buying a house will always be a option.   

legalstache

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #18 on: April 15, 2021, 05:18:23 PM »
Quote
Are you a realtor? This seems almost like scare tactics. You are right that OP can get value from figuring out the home situation, but that could certainly mean continuing to rent. Variability could also mean flexibility, especially since the OP's wife plans to stop working after the birth of the child. There is no reason to believe that renting is precarious. Why would it not be realistic to rent with two kids? Literally millions of people do exactly that. As you say, it seems like your experience is really coloring the guidance here.

Ha, I'm not a realtor and am fairly skeptical of them, although I see why you might think otherwise from my post. Not trying to scare OP. Just chiming in to offer my opinion that I don't think buying for the medium term is unreasonable in OP's situation.

By renting may be precarious, I meant you may have to move on fairly short notice depending on what the landlord wants. Obviously not impossible, but harder with a baby. Having a stable, long-term renting situation would go a long way towards solving that. Of course, there are going to be various pros/cons/stressors associated with both renting and homeownership.

Having seen a few of these threads, I've also noticed that a fair number of people who say "don't worry, just rent!" tend to be homeowners. Perhaps those people are basing their advice on having seen the pros/cons of homeownership firsthand, but I also think it's easier to tell someone not to worry about it when one already owns a home.

@cysewr have you played around with the NYT rent vs. buy calculator? I plugged in some rough numbers that suggest it might be a toss up in your situation.

use2betrix

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #19 on: April 15, 2021, 05:33:52 PM »
Renting is such a breeze, whatís the hurry?

Iím similar situation, although we just moved into a (rented) house. Prior, 2 years in a 2 bedroom apartment and a 1 bedroom prior to that.

Iím 32, wife is 27, currently 5.5 months pregnant with our first. The only reason we moved to renting a house was due to a job change 70 miles away. My wife, like yours, also wonít work (although weíve been together 9 years and sheís rarely worked, by our choice).

It makes it harder to swallow that weíre at 950k savings/investments and my salary is about 350k. Iím a contractor though and we just arenít ready to settle.

Still - a plenty happy renter!

No major help here but did want to give you some support that youíre not alone, and I think itíll be ok!

ChpBstrd

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #20 on: April 15, 2021, 08:19:53 PM »
Renting is such a breeze, whatís the hurry?

Iím similar situation, although we just moved into a (rented) house. Prior, 2 years in a 2 bedroom apartment and a 1 bedroom prior to that.

Iím 32, wife is 27, currently 5.5 months pregnant with our first. The only reason we moved to renting a house was due to a job change 70 miles away. My wife, like yours, also wonít work (although weíve been together 9 years and sheís rarely worked, by our choice).

It makes it harder to swallow that weíre at 950k savings/investments and my salary is about 350k. Iím a contractor though and we just arenít ready to settle.

Still - a plenty happy renter!

No major help here but did want to give you some support that youíre not alone, and I think itíll be ok!

^ Yup. This is where you want to be financially and in terms of geographic flexibility. Not house-poor.
One can earn $350k/year when one can focus on the job and seize opportunities instead of wasting time on grass mowing, broken garbage disposals, and getting quotes for a new roof.

former player

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #21 on: April 16, 2021, 01:40:29 AM »
Congratulations on finishing your professional studies: all that extra time and energy you have is going to be needed for the baby.

Please stop worrying about "falling behind" in the housing market: you have parents with acreage who want to pass it on to you: that is your hedge against falling behind in the market.  So you have no need to spend thousands jumping in and out of properties you don't like or want.

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #22 on: April 16, 2021, 09:54:04 AM »
Congratulations on finishing your professional studies: all that extra time and energy you have is going to be needed for the baby.

Please stop worrying about "falling behind" in the housing market: you have parents with acreage who want to pass it on to you: that is your hedge against falling behind in the market.  So you have no need to spend thousands jumping in and out of properties you don't like or want.

Thank you for the encouraging words. Baby won't arrive until (God willing) December, so I just want to make sure I am making the best use of my time leading up to then.

partgypsy

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #23 on: April 16, 2021, 02:14:39 PM »
Congratulations! I totally "get" wanting to nest when a baby is coming along. But the market, might make sense to rent until you move eastward, buy that land. My parents rented a dinky apartment in a not-great area, and moved to a house when my brother was 5, my sister and I were 4, and my little brother, well he was born on moving day. For them I think the impetus was multiple, but a big one was starting us in a better school district. If you feel the same that gives you 4 years of wiggle room. And growing up, my brothers shared a room and my sister and I shared a room. It doesn't kill anyone to share a room.

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #24 on: April 16, 2021, 02:25:27 PM »
Congratulations! I totally "get" wanting to nest when a baby is coming along. But the market, might make sense to rent until you move eastward, buy that land. My parents rented a dinky apartment in a not-great area, and moved to a house when my brother was 5, my sister and I were 4, and my little brother, well he was born on moving day. For them I think the impetus was multiple, but a big one was starting us in a better school district. If you feel the same that gives you 4 years of wiggle room. And growing up, my brothers shared a room and my sister and I shared a room. It doesn't kill anyone to share a room.

Thanks for the response. Part of the impetus for a house is the baby, no doubt, but we are totally good with waiting until we outgrow the apartment *if* it makes financial sense. I am more worried about the monetary policy of the US, and whether it will continue to send housing prices upward as inflation continues. But that sounds an awful lot like when people justify bubbles by saying "this time is different"...

AMandM

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #25 on: April 21, 2021, 08:54:47 AM »
Another voice chiming in to say don't rush to buy.  I totally get the urge to make a decision and get settled, but if your long-term plan of building in 5-8 years is a good one, renting until then might be the best option. Who knows whether the current crazy prices will keep rising, or whether they will collapse? What are the chances that buying a "starter" on a 5-8 year timeframe will mean selling at or below your purchase price? I would especially not buy a house with plans to rent it in the future unless you want your side gig to be landlording.

In your situation I would also explore ways not to move even after #2 or #3 comes along. Maybe you can rent shared office space, or a room in someone else's house or apartment, as a place to do your WFH. Then you just move your work stuff, free up the second bedroom for the kids, and save the trouble and expense of moving your whole family.

Congrats on your marriage and your baby!

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #26 on: April 22, 2021, 10:13:30 AM »
Another voice chiming in to say don't rush to buy.  I totally get the urge to make a decision and get settled, but if your long-term plan of building in 5-8 years is a good one, renting until then might be the best option. Who knows whether the current crazy prices will keep rising, or whether they will collapse? What are the chances that buying a "starter" on a 5-8 year timeframe will mean selling at or below your purchase price? I would especially not buy a house with plans to rent it in the future unless you want your side gig to be landlording.

In your situation I would also explore ways not to move even after #2 or #3 comes along. Maybe you can rent shared office space, or a room in someone else's house or apartment, as a place to do your WFH. Then you just move your work stuff, free up the second bedroom for the kids, and save the trouble and expense of moving your whole family.

Congrats on your marriage and your baby!

Thanks for the feedback @AMandM . That makes a lot of sense. I was just thinking the other day about how a "starter house" could backfire in a big way, if we were to buy something overly small (like the 2 bed/1 bath house MIL sent me the Zillow link to the other day lol), and then experience a market drop that puts us underwater... Definitely ant to minimize our odds of getting "stuck" in a situation like that. Plus DW would prefer to move as few times as possible.

As for the rental property aspect, we are both open to investing in RE and being landlords at some point, but it seems like it might be best to buy a dedicated rental property down the road if we decide to go that route.

I found a house plan online that would seem to lend itself to the addition of a garage and master suite later on, which seems like it could be an option. Not sure if anyone here has experience with building a house in stages like that?

Goldielocks

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #27 on: April 24, 2021, 08:40:49 PM »
With your extra time, I recommend taking over baby care completely for 2 days a week, and your wife working part time.  This will give you a lot of extra money for extras, and keeps her relevant if she ever wants to go back to work (for sanity reasons).   I will also note that a lot of my friends ended up shopping a lot (solo if dad had the kid, with kid in the week), just to get out of the house, and it became a hobby that was adding to household expenses.

Advice is for after the baby is 4 months+.  I am not a sadist.

 Until then with your extra time, can you put in a bit more at work now so you build up goodwill that you can take a bit of time here and there for the end of pregnancy / after the baby arrives?

Nesting is a thing.  Just make a really nice space for baby in the rental you now have and a plan to stay there for 2 years.   You can change it later if the time is right, but just knowing a plan may be soothing at this time in your life.   Don't forget that wanting a different car often comes along with starting to have kids, so you need to see what pulls at you first.

Sandi_k

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #28 on: April 25, 2021, 02:12:39 PM »

Thanks for the feedback @AMandM . ... if we were to buy something overly small (like the 2 bed/1 bath house MIL sent me the Zillow link to the other day lol)

I found your problem! ;)

1) IMO, your MIL is part of the pressure your wife is feeling, which is then transmitted to you.

2) Parents define success and "the American Dream" as home ownership, because they had great RE experiences, in general.

3) No way, no how would I ever purchase a 2 bedroom/1 bath house. It limits your market when it's time to sell.

4) The transaction costs of buying and selling are not trivial.

5) The most FI things you can do are to stack up cash, and make sure your wife is past the first "bend point" of Social Security before she becomes a SAHM.

IIWY, I would look to rent a 3 BRm home after the baby arrives; this gives you a work space, and the kids can share a room, even when kid # 2 arrives. You could have complications or medical costs you haven't anticipated, so DO NOT overcommit yourself right now to the idea of real estate.

And I *love* the idea of finding an older property owner, where you could be their onsite helper, with perhaps a separate cottage on the land to make your living costs lower. Maybe some of your friends have elderly parents whom you could assist? My brother did this in Hawaii, for several years while he and my SIL were starting out, and it enabled them to save a huge downpayment.

I *do* like the idea of you learning how to use tools for DIY projects once you are an owner; that will help you assess any home you might end up owning, as well as assist if you later build - you'll be able to assess quality and contractors more expertly.

cysewr

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Re: Recently Married, Back for More Advice - Please Help!
« Reply #29 on: April 25, 2021, 04:50:52 PM »

Thanks for the feedback @AMandM . ... if we were to buy something overly small (like the 2 bed/1 bath house MIL sent me the Zillow link to the other day lol)

I found your problem! ;)

1) IMO, your MIL is part of the pressure your wife is feeling, which is then transmitted to you.

2) Parents define success and "the American Dream" as home ownership, because they had great RE experiences, in general.

3) No way, no how would I ever purchase a 2 bedroom/1 bath house. It limits your market when it's time to sell.

4) The transaction costs of buying and selling are not trivial.

5) The most FI things you can do are to stack up cash, and make sure your wife is past the first "bend point" of Social Security before she becomes a SAHM.

IIWY, I would look to rent a 3 BRm home after the baby arrives; this gives you a work space, and the kids can share a room, even when kid # 2 arrives. You could have complications or medical costs you haven't anticipated, so DO NOT overcommit yourself right now to the idea of real estate.

And I *love* the idea of finding an older property owner, where you could be their onsite helper, with perhaps a separate cottage on the land to make your living costs lower. Maybe some of your friends have elderly parents whom you could assist? My brother did this in Hawaii, for several years while he and my SIL were starting out, and it enabled them to save a huge downpayment.

I *do* like the idea of you learning how to use tools for DIY projects once you are an owner; that will help you assess any home you might end up owning, as well as assist if you later build - you'll be able to assess quality and contractors more expertly.

Haha, that's a fair observation. My wife has pretty much been smiling and nodding at her parents' suggestions for housing. We both know that patience is our best strategy w/r/t housing. We also agree that we want to end up building a house once we buy the lot from my parents. It's just a matter of staying patient, and having a plan for the meantime. And yes, incredibly frustrating to have the older generation tell you what a great investment real estate is, when you can hardly afford a fixer upper in the current market.

Love the idea of renting a 3 br home after the baby. I think if we could find a house to rent, that would take a lot of the pressure off.