Hey Mustachians! Need some advice...
We're moving across the country to upstate NY.
I’m 34, married, have 3 young kids. My day job brings in $160K/year.
We have 1 million dollars saved up to invest in real estate to be financially independent within the next 5 years.
We have no debts, no car payments.
Having a decent house with a yard is a something we really want for our family as we really enjoy being outdoors and have always rented. I also work out of my house.
Goals:
1-2 years: keep my W2 job as we begin buying real estate and create residual income while leveraging as much as possible.
3-5 years: quit my job and dedicate more time to managing REI investments, while possibly starting own business.
5-10 years: continue to expand investments while possibly investing in other business opportunities.
We've had our eye out for houses for the past year and found one we like that costs $400K. It has potential to have value added (unfinished walk-out basement, dated kitchen, etc.). We’re planning to put $80k down on this house. It would put our monthly housing payment (PITI) at around $2500.
Is this unreasonable? Have any other mustachians out there been in a similar predicament? Would this purchase put a dent in our financial goals listed above?
Thanks for any input!
It is hard to give advice based on just the info given above.
Are you moving to a HCOL area? Upstate NY generally is low cost of living (except for taxes). Most people here would already be FIRE'd at $1 million. With no debts, what type of expenses do you have to prevent you from FIRE'ing today? Obviously a $400,000 dollar house would answer that question, but I'm sure there are plenty of homes in upstate NY that are well below that mark. A $400,000 house in upstate I am guessing is a very large house.
If this is what you value (which is totally understandable):
"Having a decent house with a yard is a something we really want for our family as we really enjoy being outdoors and have always rented. I also work out of my house."
I would think there are plenty of options out there anywhere in upstate NY that would fit that bill well below the $400,000 mark.
Do you have a desire and drive to manage and invest in real-estate in your future?
I guess what I'm wondering is what is preventing you from living in a house at half or even a quarter of that price that would potentially allow you to simply retire now for the rest of your life without having to manage/invest in real-estate.
I ask these questions simply because they're unknown about your situation, not because I'm looking to judge. Without understanding your situation better, it is hard to give good advice.
I live in Western NY and cost of living is dirt cheap. A $400,000 home is a mansion here.