I don't believe in a forever home. I believe in options
Why a “ Forever Home” is not the only option.
Living in San Diego where real estate is real real expensive, I personally don't believe in forever homes, I believe in options. Options to start over, options to upsize and downsize.
Think about it. When we first bought our 1927 Spanish Bungalow with a detached unit, we were young and still starting our careers. At the time I was transitioning from non profit to lending, and my husband was starting off in Real Estate just as his family has been doing for almost 20 years.
We were fortunate to have my in-laws lend us money for the down payment with the expectation that we would pay them back with interest (we have recently done just so and pulled out cash for ourselves to keep as a reserve). An investment for them, and ultimately the jump start we needed.
Those first years we life hacked that house switching between having roommates, and Airbnb guests both in the home, and in our unit. We life hacked our home.
We were on a mission to meet our goals, and to save as much as possible, and save we did.
Now don’t’ get me wrong, we could afford our first home, but why not have someone else help pay your mortgage? We knew we wanted to buy another property eventually, so this was the time to keep our head down and save as we slowly fixed up the home.
It was not always pretty. Trust me, living in construction is not always fun. We call it “quality bonding time”. We’ve seen it all. Kitchen remodels with the fridge in the living room, me hosing john off outside with the garden hose so he could prepare to go show property since we had no working shower, bed bugs mid move (yep we sprayed two houses at once). You name it, we have seen it.
Sleeping in the living room while the floors are redone
But here’s the thing. When you live and buy in a desirable neighborhood the not so desirable picture perfect home, you have an opportunity for growth. Minor updates make huge impacts, and big projects put your value through the roof. New kitchen? Yes please. Who does not want the historic charm or a home with beautiful trim, but modern amenity’s?
1927 Spanish Bungalow kitchen before
1927 Spanish bungalow before.
Another hack in southern California? Buying the property with the option to build additional units. This was the appeal of this home. The “ we have to have it”. Knowing one day we would already have the land we need to build two additional units on the property is just what we wanted in our back pocket.
Since then, we have moved into a 1912 historic craftsman with an additional unit (hello Mills Act) , and rented out our Spanish bungalow. We put ourselves in the position to buy a new primary with additional investment income, and have our first home as an investment property. Renters are not only paying our mortgage, but we are actually making additional money. Not to shabby.
Mr. tough guy does not like to wear shoes while pulling up nails.
Now here’s the thing, we are currently drawing up plans to finally build 2 units on our investment property and it sure is exciting.
We did not know what Covid would bring us this last year. We did not know if your tenants would be able to pay rent. There was a lot of unknown.
But we were lucky to have reserves from all of our years hustling. And one more thing. We had options. Options to move into a studio unit on our investment property if times got hard (that’s our running joke, me, my husband, the dog and baby in a studio) . Option to rent out our newly remodeled home in an even better neighborhood then our up and coming investment’s location. Option to move back to our investment as we begin construction, and our family grows. Option to sell if needed. Heck who knows. One day we may live in the new units we build.
We don’t know what life will throw at us, but the bottom line is we want options.
