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November 20, 2016

We Bought a House – “Retirement” Imminent

The funky house we almost bought.
I’m not sure we were really ready for this step, but we stumbled upon the right property and now we own it. That means my retirement date is all but set for the end of this year (although my boss doesn't know that yet, so let's keep this just between you and me). Happily, that coincides with my 30th birthday. Here’s the story of how we ended up with a house long before we planned.

Reality Check
As I discussed in a recent post, I researched unconventional housing options like a yurt or shipping container home that would save us a considerable amount of money for “retirement.” Unfortunately, the state of California makes it very difficult to legally live in one of these structures. I considered fighting the system, but I quickly determined it wasn’t worth the time, money, or frustration that would inevitably be required, so I didn’t even try. The most discouraging part was that even if I did try to challenge the status quo, success was by no means guaranteed (even a rich startup CEO is struggling).

Accepting this outcome was pretty hard for me to do. I really wanted to show the world if you used a little ingenuity, you could find super affordable housing in sunny California and retire super early. Unfortunately, this isn’t really the case. If you are willing to skirt some regulations and risk being evicted at gunpoint, you might be able to work something out, but I’m not willing to put my family through that.

Accelerated Timeline
If you’ve been following this blog, you may recall the most optimistic date I projected for my retirement was the end of 2019.

So why did we buy a house now? That’s a very legitimate question I’ll try to answer.
This all started when I began looking for property suitable for a yurt or shipping container home. I figured it could take a while to find the right lot, and it would take some time to construct the home, so it made sense to secure it before my retirement date. I also expected the price of whatever lot we ended up with to be low enough that we could afford it in addition to our current home. Basically, when the plan was to utilize some form of unconventional housing, it made sense to start shopping now.

Once we accepted an unconventional home wasn’t meant to be, we just kind of started looking at normal houses. I tend to be pretty picky when it comes to homes, so I figured it would take quite a while to find something acceptable, but we found a couple houses we liked surprisingly quickly. Once we saw those houses, we thought it was pretty unlikely we were going to find anything better, so we decided to pounce on them, timeline be damned. I know it seems crazy to jump the gun on retirement when we’ve done so much planning, and this might prove to be the most reckless thing I ever do, but I’m very ready to stop working and I’ve played it safe my entire life, so I think I've earned one extremely slightly reckless move.

The Purchase Process
I wasn't initially sure where exactly we should focus our search for housing. The weather map I've shown before indicates all of coastal southern California is sufficiently pleasant, but that is a big area. After lots of research and consideration we settled on California’s central coast because the weather is great, it’s close to my parents, schools are good, and prices are lower than in SoCal. Unfortunately, the prices aren’t that much lower.

As I mentioned above, we found a couple great houses shockingly quickly. The first house we put an offer on needed quite a bit of work. The house had a pretty funky design, but it had a great location and two garages (!!). Unfortunately the owners’ valuation of the house was unreasonably high when the condition was taken into account, so we were not able to come to an agreement. We were pretty bummed we didn’t get the house, but it was also a bit of a relief because it would have been a lot of work. Fortunately, our disappointment didn’t last long.

Shortly after the first deal fell apart, I was meticulously combing through the MLS one Sunday evening and came across a seemingly amazing house in a great location. It had been listed on Friday and I suspected it would sell on Monday, given the quality of the home and the “hotness” of the market. I showed the house to Chrissy and she agreed it looked like the one, so we decided we would put in an offer, sight unseen.

I called our realtor first thing Monday morning and let her know we wanted to put in an offer on a house. She was surprised we were willing to do so without seeing the house first, but we had done a significant amount of research into the home and the neighborhood online and I know the area pretty well since I grew up near there, so we were pretty confident in our decision. When I asked what we should offer, our realtor said she would call the listing agent to see how much interest there was in the property. It turns out there were already two offers in, so we quickly put together our offer and hoped for the best.

The next day we got a call from our realtor informing us we got the house. This was exciting and terrifying news, because we were now on the hook to buy a house we had only ever seen on a screen. It was also WAY over the budget I had in mind (remember, I wanted to live in yurt), and it happened way faster than expected, which means my “retirement” is happening sooner rather than later.

We have since seen the house and it exceeded every one of our expectations. The photos in the listing left a lot to be desired (Why do realtors list houses with crappy photos?), so there was a little uncertainty about the layout and condition of the home. Luckily, it is a fantastic house that is move-in ready.

Budget Buster
If you’re wondering how this is going to work financially, I’m right there with you. Once we sell our SoCal house we should be left with a decent cushion to live on for a while, but I’m definitely going to have to earn a little more money than I planned. I don’t think this will be too much of a problem because our needs will be pretty low and I already planned on earning some money in “retirement.” In the unlikely event that none of my money-making schemes work out and our burn rate is too high, I can almost certainly find a real job near our new home for a while and regroup.

We will have a better picture of our financial future once our SoCal home is sold and we find out exactly how much we will walk away with. Until then, we can only speculate.

Blog on the Back Burner
As you may have noticed, my posts to this site have been somewhat few and far between the past couple months. That was due to all the activity surrounding the purchase of our new home, which kept us pretty busy. We will likely continue to be very busy through the end of the year as we get our current house ready to sell and move all our belongings a couple hundred miles north. Be patient, because we will have a lot more time to blog once I no longer have a job and we settle into the new house early next year.

If you're retired, did you downsize your house (or house payment) for retirement? 
If you're not retired, what’s the craziest financial move you’ve ever made?
Let us know in the comments.

Affiliate Recommendation:
Who needs hotels?
If you would like to stay in a yurt (likely only approved for temporary habitation) or a bunch of other great places, try Airbnb. You can usually find unique lodging cheaper than a hotel. We used it throughout Europe and highly recommend it.

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