Things are about to get interesting since Nick and I just started our biggest adventure yet…we bought a house! Specifically a 3 unit multi-family. We don’t have lessons or takeaways, since we are just at the beginning of this part of the journey, but we are so excited to call a place our home and share the experience as it comes.
Fixin’ to Fix Up
The dream of buying a house started really early on for me. I think around high school I set the goal to buy a house by the time I was 27–not sure why it was 27, but that’s what 16 year old Hannah decided. Ultimately, I think it was a craving to create a space of my own or maybe because I started watching Chip and Joanna Gaines on Fixer Upper so the whole thing was fantasized in my head. Either way, I held onto this vision and in part it was one of the reasons why I decided to continue living at home. I viewed the purchase of a home as a financial success milestone so it really was a goal of mine. In my head, the house was always a single-family home, but that dream evolved when Nick came into the picture…
Oh, Dream Maker, You Heart Breaker
Nick being Nick quickly whipped out an excel sheet and explained that purchasing a single family home rarely made sense from a financial perspective. My bubble was burst and I was like, am I supposed to rent? / When does it make sense to purchase a home? Nick came prepared with a silver lining, multi-families or an investment property offered a chance at a better opportunity than a single family and in fact, Nick was interested in purchasing a multi-family. As we muddled this over and discussed the possibilities of purchasing a multi-family, we agreed to embark on this journey together and that’s when we kicked off our search.
From Bob the Builder to Buying a House
When my parents tell embarrassing stories about me (like good parents do) they like to tell folks about when I declared I would be a house builder at age 5. My reasoning went: “Houses are worth thousands of dollars, so they must pay the guy that makes them thousands of dollars.” I guess I was a smart kid! To be fair, I also thought that my dad made $9 a week at one point, but more on that later.
When it Happens, It Happens
I’ve always felt that eventually I’d own a house, but honestly I didn’t have much of a time frame. It was more about having the money and feeling like it was a good investment – less about ‘creating a space’ as Hannah likes to say. I did obviously envision a family, house, yard, the works, but I didn’t care if that happened when I was 26 or 36. 46 would’ve been pushing it, but whatever, I could’ve made it work.
A few things happened that made me decide that now was a good time to go for it.
The Stars Aligned
First, I was fortunate enough to do fairly well during the bitcoin boom and had about $60k saved up.
Second, my grandma had set aside money to pay for my first year of grad school, and I realized I didn’t want an MBA. I also had money for a car that my parents had given me as a reward for getting a 4.0 in high school – yes, I still don’t have a car. I’m immensely blessed and privileged to have these gifts – and for full transparency, they added up to ~70% of the down payment. These made me realize that we could afford a multifamily, not just a single family.
Third, I read The Four Hour Workweek by my favorite person in the world Tim Ferriss, and I realized that most of my fear of buying a house wasn’t rational. It was a reversable (all bet expensive) decision. I also realized that buying a multifamily was actually less risky in that we could ‘abandon’ an income property by giving it to a management company.
Fourth, I realized that when we considered the cost of living in Boston, particularly for two people, buying a multifamily to offset the cost of living was a pretty solid investment. Assuming we break even on our mortgage + expenses with rent from the other units (a BIG assumption, stay tuned), and we’d be spending $2k on housing per month, we’re going to be getting a return of around 18% on our downpayment by NOT paying rent. A pretty good return if you ask me!
Fifth, and most importantly, I fell in love with Hannah, and knew that we shared similar values around family, money, and the important things. We couldn’t qualify for our loan without both of our incomes, and I know it’s the right step for our relationship after dating for two and a half years. People think it’s weird to buy a house before you get married – but if you think about it, it’s weirder to do the opposite!
Icing on the cake is Hannah’s dad is a contractor, so we’re a little less worried about maintenance and dealing with wear and tear on the property knowing that we have an expert in the family.
We bought the house on Wednesday, so like we said, it’s early days! We’ll have plenty to share regarding being landlords, the expenses of home ownership, and plenty of other lessons, but for now we wanted to share this update with you. Exciting things to come!