A tough life decision......

[jluck]

I don't usually like to talk personal fiance issues on a forum as it almost always makes the OP look arrogant IMO, I really don't want to give that impression but I have had a very hard time for a long time figuring out what I should do and would like some sage advice on what you would do in a same or similar position......

I have a truly unique property and have had it for over ten years, we had a brand new house built on 33 acres with a pond, creeks, waterfalls, pasture land, big shop etc...I love the place.
Like many people I also have a bigger mortgage than I care too. I do have a decent amount of equity even in this crappy housing market. I have always wanted to retire at a early age and have done ok at prepping to do so but with the cost of living here I don't foresee a early retirement.
The offer presented itself recently to purchase my folks home for a fair price.It's old (1957), small (1300 sqft) and is on two decent acres. I could easily sell my home and purchase my folks place free and clear.
That would allow me to invest in my 401 and Roth very aggressively.
I am still young (32) but have had the vision of retiring as early as possible since I first started working.

What would YOU do is this circumstance?

[LigaPrivadaT84]

My fiance has issues when I buy too many cigars.
:r

If the ultimate goal is retiring early, I would buy your folk's home and move. That BIG property does sound nice though; must be hard considering giving it up.

[joeobx]

Dude...I'm a few years older and if I had the same chance you do I'd jump on it. Another question you have to ask yourself is will you be happy where you parents place is.....really. The house is small, will you have enough to maybe add on, do you like the area? There are a lot of questions you need to work out but if you can make the house the way you would be happy and you like the area I'd jump at the chance to be mortgage free.

[jluck]

Dude...I'm a few years older and if I had the same chance you do I'd jump on it. Another question you have to ask yourself is will you be happy where you parents place is.....really. The house is small, will you have enough to maybe add on, do you like the area? There are a lot of questions you need to work out but if you can make the house the way you would be happy and you like the area I'd jump at the chance to be mortgage free.

I do have a level of comfort at my folks place as it's where I grew up. Also I have a brother who is a contractor who would likely build me a newer home to replace the current one. I would do it out of pocket over the coarse of years and try to time its completion to when the youngest kid moves out. ;)
And yes I would be happy there but when I drove past my current home (If I sold it) I know I would always wonder if I did the right thing.

[joeobx]

Jared, I'm 53, been woking for the same place for 32 yrs and still loking at another 7 yrs...... you'd be doing the right thing.

[ashtonlady]

The house that you are in now can be reproduced if you find what you did didnt work for you. The house you are talking about moving into is your family home. If it wasnt about the money would you do it?

[chachee52]

This is a hard choice. I'm a type of person that it doesn't matter the house, but the location. I personally would kick myself letting go a property like you described. Any way you can sell of a few acres of your current land to cut the morgage down?
Also I had an issue in my family where my sister bought my grandfather's house (where my dad grew up) and treid to fix it up but failed (long story) you could tell that my dad was very upset in messing the house up but he never said anything.
Then I had the chance to buy my parent's house and same as you, I would have gotten it cheap and would have been able to add what I wanted, but I chose to pick a house that was next to a lake and a little more wooded area. I don't regret paying more and having a bigger morgage to live in a place that I love.

[shilala]

At 32, and the housing market being what it is, I'd ride out the investment in your current home.
You're going to put a lot of money in that 1957 home, be sure to factor that in.
Consider kids. I don't know if you have any, how many, or if you're done making them. Will the parent's house provide enough room? Is it the place you want to retire to?
It boils down to what you love.
If your current home makes you happy, it's worth whatever the cost. Planning for retirement is great, but you need to balance the cost in your quality of life now. Things happen. I'd suggest you put your family's quality of life now in first position. Maybe that early retirement never comes due to circumstances beyond your control.
You'll never be disappointed if you've led a full life already when it comes time to retire. You can always downsize later and likely do better, or revisit this in 10 years.
You may lose the opportunity to buy your parent's house, but it's also likely to come back on the market somewhere down the road.

Or go ahead and buy your parent's place. Just make sure your choice is what will make you smile every day. Don't let your decision be influenced more by dollars and cents than your happiness. Life is way too short, my friend. :tu

[BigCat]

I think it depends on how much enjoyment you're giving up by moving and how long you will have to go without to retire early. I wouldn't want to live a really austere life for 18 years just so I could retire at 50. Those 18 years should be enjoyed, too. And I don't think my answer would change if you were setting yourself up to retire at 40 either. I'm not advocating spending all you have in a carpe diem kind of sense, but if you can add good money to your savings while living well, that seems like a fine formula. We aren't guaranteed to make it to retirement age, whatever age that is.

[kaisersozei]

Depending on your job security and future earnings potential, this would be my recommendation:

Keep your current property, refinance. Rates are good now and you've still got some years left until retirement to pay it down. Take the equity, purchase your parents house. Renovate it a bit, then rent.

I'm not a financial manager, but my preference would be for land & property as a hard asset over IRA/Roth stocks. Good luck with your decision!

[CigarSquid]

The house that you are in now can be reproduced if you find what you did didnt work for you. The house you are talking about moving into is your family home. If it wasnt about the money would you do it?

This is a hard choice. I'm a type of person that it doesn't matter the house, but the location. I personally would kick myself letting go a property like you described. Any way you can sell of a few acres of your current land to cut the morgage down?
Also I had an issue in my family where my sister bought my grandfather's house (where my dad grew up) and treid to fix it up but failed (long story) you could tell that my dad was very upset in messing the house up but he never said anything.
Then I had the chance to buy my parent's house and same as you, I would have gotten it cheap and would have been able to add what I wanted, but I chose to pick a house that was next to a lake and a little more wooded area. I don't regret paying more and having a bigger morgage to live in a place that I love.

At 32, and the housing market being what it is, I'd ride out the investment in your current home.
You're going to put a lot of money in that 1957 home, be sure to factor that in.
Consider kids. I don't know if you have any, how many, or if you're done making them. Will the parent's house provide enough room? Is it the place you want to retire to?
It boils down to what you love.
If your current home makes you happy, it's worth whatever the cost. Planning for retirement is great, but you need to balance the cost in your quality of life now. Things happen. I'd suggest you put your family's quality of life now in first position. Maybe that early retirement never comes due to circumstances beyond your control.
You'll never be disappointed if you've led a full life already when it comes time to retire. You can always downsize later and likely do better, or revisit this in 10 years.
You may lose the opportunity to buy your parent's house, but it's also likely to come back on the market somewhere down the road.

Or go ahead and buy your parent's place. Just make sure your choice is what will make you smile every day. Don't let your decision be influenced more by dollars and cents than your happiness. Life is way too short, my friend. :tu

Good points.

Have to think well enough in the future.

I always tell myself, think about the situation for a week or so.. Write the good, bad and OK's out of it down. Also, make notes of the negative thoughts you have and weigh them to the positive thoughts.

So far, that has worked in my 27 years.

Personally, I would love to have the property you have right now and till I die. I know you said the mortgage is higher than you like, But is it affecting you at all?

I would think hard about it and really weigh in everything.

Good luck!

[Ashcan Bill]

If you could swing a 15 year mortgage, you'd have your current place paid off free and clear by the time you're 47. That would put you on track for an early retirement, and still allow you to keep the place you have now. Depending on where things are at that point, you could make the decision to keep it or downsize then.

On the other hand, being debt free opens up a lot of options too. If you're a good saver and investor, you'd pretty much guarantee an early retirement by downsizing now and socking away as much as you can.

Of course a lot depends on what you mean by early retirement. I'm assuming you mean getting out of the rat race sometime in your early fifties. Given where life expectancies are today, that would most likely give you a thirty or forty year retirement. That's a long time, and what you need to be shooting for from a financial standpoint.

Either way, the fact that you're planning that far ahead tells me you'll probably do just fine as far as getting out early. :tu

[shilala]

Another thought, just to throw it out there, and I don't have any way of knowing if it's something you guys would consider...
Buy your parent's home as an investment property. Rent it, lease it, or leave it sit if you can swing that. It's an enormous tax advantage and it'll leave the option to sell your current home wide open.
You won't need to produce any cash, you let the bank take a second on the equity in your current home as collateral.
When you buy the parent's home, claim it at twice what you paid for amoritization purposes, assuming you'll be doing tons of upgrades. That way if you ultimately sell it at a profit, you can still take a large capital gains loss and leave the game whistling.
There's obviously more to talk about so far as that route goes, but it would be one that keeps all your options open for years to come. :tu
It may change your retirement portfolio a bit, but you won't realize the tax hit you'll get with the Roth and 401K in the end. Plus you'll save a fortune between now and retirement on taxes.
You'd have to crunch all the numbers, but it smells pretty sweet from here. It worked real well for me. I retired at 42, although mine was forced by my health. Fortunately I was prepared (enough).

[kaisersozei]

Another thought, just to throw it out there, and I don't have any way of knowing if it's something you guys would consider...
Buy your parent's home as an investment property. Rent it, lease it, or leave it sit if you can swing that. It's an enormous tax advantage and it'll leave the option to sell your current home wide open.
You won't need to produce any cash, you let the bank take a second on the equity in your current home as collateral.


That's the direction I was recommending, but I went the refinance route on his current house. Didn't think about the second mortgage on the first.

[357]

Another thought, just to throw it out there, and I don't have any way of knowing if it's something you guys would consider...
Buy your parent's home as an investment property. Rent it, lease it, or leave it sit if you can swing that. It's an enormous tax advantage and it'll leave the option to sell your current home wide open.
You won't need to produce any cash, you let the bank take a second on the equity in your current home as collateral.
When you buy the parent's home, claim it at twice what you paid for amoritization purposes, assuming you'll be doing tons of upgrades. That way if you ultimately sell it at a profit, you can still take a large capital gains loss and leave the game whistling.
There's obviously more to talk about so far as that route goes, but it would be one that keeps all your options open for years to come. :tu
It may change your retirement portfolio a bit, but you won't realize the tax hit you'll get with the Roth and 401K in the end. Plus you'll save a fortune between now and retirement on taxes.
You'd have to crunch all the numbers, but it smells pretty sweet from here. It worked real well for me. I retired at 42, although mine was forced by my health. Fortunately I was prepared (enough).

A similar thought, lease your place (aka let someone else pay the mortgage for you) and buy your parents place. Live at your folkds place to keep lower upkeep/mortgage costs. 5-10 years later you might be able to sell your parent's place for enough to pay off the remaining owed on your place. Then you'd have the house you really wanted and it would be paid off.

Try to lease your place for full mortgage price, but if not you can put in the difference plus extra to pay your place down quicker.

[neoflex]

I think Shilala nailed it with both of his posts.
I'm 35 and 5 years ago my wife and I bought the current home we're living in with the intentions of living here long enough to see the mortgage out. Truth be told we are not satisfied with the neighborhood as we bought in the early stages of the subdivision and now we have no intentions of staying here. We are both hoping the market rebounds in the near future so we can sell and move elsewhere even if it just means breaking even on our current home. I personally want to either move to a subdivision where it has a tighter nit community feel or further out in the country where I will have a decent amount of property where I don't even see my neighbors home and can do more with mine. Long story short location is everything. Will you be 100% satisfied with going from one extreme to the other? Unless you plan on spending the majority of your early retirement traveling the location of where you will be living is key as you will be spending a whole lot more time there. If your not satisfied with where you are living will the earlier retirement be worth it to you and your family in the long run?

[jluck]

The house that you are in now can be reproduced if you find what you did didnt work for you. The house you are talking about moving into is your family home. If it wasnt about the money would you do it?
That is the one big negative, I could never reproduce the property I currently have. And about the money question...It is always about the money (debt) with me. If I had this place paid for I would keep it forever.

I think it depends on how much enjoyment you're giving up by moving and how long you will have to go without to retire early. I wouldn't want to live a really austere life for 18 years just so I could retire at 50. Those 18 years should be enjoyed, too. And I don't think my answer would change if you were setting yourself up to retire at 40 either. I'm not advocating spending all you have in a carpe diem kind of sense, but if you can add good money to your savings while living well, that seems like a fine formula. We aren't guaranteed to make it to retirement age, whatever age that is.

Really the only enjoyment given up would be my personal. I look around my property and yes I smile (Maybe Ego, maybe accomplishment, I don't know),I have worked my ass off to have what I do already. But the family is all for moving to get closer to civilization. Also don't get me wrong about my folks place, It's a great home/location that most anybody would love to own.
I thought about a second mortgage and equity loan too and I could almost just buy it out of my portfolio too, But that goes against what I am trying to do with carrying no debt or it would empty my current retirement fund.
This is something I have put many years thought in to and yet I still brought it here so yes it is tough for me.I truly believe my family's quality of life would be greatly improved by making this move also as do they.

Health....I was not going to bring this in to it but its a good point Scott. I don't have any weird, funky or strange illness but I have a lot of self inflicted body damage from motorcycle/ATV riding and racing. I broke my back at 17 and have major arthritis,nerve and soft tissue damage. I don't see myself effective working more than another 15-20 years.

Thanks,guys/gals

[Commander Quan]

If I had your property there is no way I'd sell it just to be able to retire to someplace that I didn't really want to be.

Just another thing to think about, I know more than one couple that have retired early in life only to have to go back to work when investments fell through. I would be 300% sure you are all set before you step out of the workforce. Working an extra 5-10 years when your younger is a lot better than having to try to get back into the workforce when your older, and broke.

[jluck]

If I had your property there is no way I'd sell it just to be able to retire to someplace that I didn't really want to be.

Just another thing to think about, I know more than one couple that have retired early in life only to have to go back to work when investments fell through. I would be 300% sure you are all set before you step out of the workforce. Working an extra 5-10 years when your younger is a lot better than having to try to get back into the workforce when your older, and broke.

It wont be both of us retiring. The wife is in the medical field and will be working up to RN soon and she want to keep working. I will take over home duty's and play Mr.mom (which I do pretty well and like too). I also will be venturing in to starting a on a side business for a bit of hobby scratch and see where it goes.

We just had Easter out here again too. 20+ kids, 30+ adults, dogs, food and fun. Even had a herf with a half a dozen people, All happening at the same time; a herf, baseball game, kids on the trampoline, basketball, tether ball,fire pit, etc... This is something that just couldn't happen on a smaller property. Party's like that don't make the decision any easier that's for sure.

For now I think we will stay put. My A.D.D might change that notion by tomorrow though. :D. Even if the wife really wants to get closer to work a trial move to a rental or even my folks vacated home in question for a year or so might be a option.
Thanks again and feel free to keep the thought coming. They do help.:tu

[Commander Quan]

Jared do you have any pictures of the property? I have been on the looking for my Utopia for a while now, and your place really sounds great.

[jluck]

Jared do you have any pictures of the property? I have been on the looking for my Utopia for a while now, and your place really sounds great.

Not many uploaded. Here's a few of the house and my latest project. I will try to get some. I need to anyway.
http://www.cigarasylum.com/vb/showthread.php?t=52353

Here is some pics during the flood. Not the best show case but....
http://imageshack.us/a/img811/6161/floodcbid009.jpg
http://imageshack.us/a/img209/9800/floodcbid006.jpg
http://imageshack.us/a/img23/2504/floodcbid004.jpg

[mosesbotbol]

Can you buy your parent's place, rent it and cover the mortgage? This will give you time to figure out what you want to do and not lose the opportunity.

[jluck]

Can you buy your parent's place, rent it and cover the mortgage? This will give you time to figure out what you want to do and not lose the opportunity.

This is a possibility and could very well happen. I really don't want more debt though. Maybe I shouldn't worry about it as much as I do. I dunno...

[ApexAZ]

2 acres = possible smoking lounge... Just sayin'....

[maninblack]

Do what makes you happy. Nuff said. Happiness is underrated.

[jluck]

I figured I would update this for anyone who cared (or not).

My folks have been slow to commit on selling there place and I am pretty sure they want to keep it at least for a while longer. That fixes that issue....But we still want to move to town and have been looking at houses for a while now. After shopping aggressively we found a place that will suit us great and its a foreclosure. Its bigger,flatter property has a second house for extra income potential Etc. (The whole family loves it) The asking price is half of what my parents wanted for there house but there house is in better shape overall.

So.....Today we put in a offer and earnest money down. I will keep you all posted and please send prayers my way for us getting this house.

As a side note, Out of the blue we have had two different people interested in our house after months of nothing, Home buying season must be underway. :)

[Apexkingjusto]

Congrats! Its funny how sometimes decissions get made for us....i think however there is also a good buddist quote something about not makeing a decission is your decission.


Oh well best of luck to you and your family!

[CigarNut]

Congrats Jared!

[jluck]

I just hope it all works out, This is the anxious part of the purchase. The house could still be bought by someone else

[jluck]

The bank and I finally agreed on a price! It is looking good for this home purchase! :noon

I will update as things unfold.

[jluck]

I finally listed my house/property.
http://www.advantagerealestate.com/idx/listings/12-1551/details.html

I am still waiting on all the little BS things associated with buying a home, Particularly a foreclosure. It's always something and damn it's stressful at times.

wish me luck.

[CigarNut]

Good Luck Jared!

[Ratters]

Oh man, I'd love to have your house, that place is awesome! :tu

Glad things are going the way you want though, it's funny how stressful they make the process. When buying my home I had the down payment and a credit score over 800 but they still made everything as stressful as possible. It'll be over soon. Congrats!

Oh, and I hate you for being in the financial position you're in, I don't think I'll ever be able to retire. :ss

[jluck]

Good Luck Jared!
Thanks Michael

Oh man, I'd love to have your house, that place is awesome! :tu

Glad things are going the way you want though, it's funny how stressful they make the process. When buying my home I had the down payment and a credit score over 800 but they still made everything as stressful as possible. It'll be over soon. Congrats!

Oh, and I hate you for being in the financial position you're in, I don't think I'll ever be able to retire. :ss

Trust me....I'm not in all that great of financial position (IMO)....but trying to get there.
I just don't want to be mortgage poor my whole life.

Thanks for the nice words BTW.:)

[jluck]

It's a slow Friday so I figured I'd update for those keeping track....


The house (foreclosure) we fell in love with and had money down on fell through (Bank Of America is a PITA), Were over it and still at our house. My folks place is still a option as is buying land and building new again were just sitting idle until our house sells.I have absolutely accepted the thought of selling this property and so has the fam.

I do appreciate all responses on this topic and I know I didn't respond to every post and or point and I'm sorry for that.

Mama really wants to get closer to town so a drastic price reduction may be in order, We might rent current home out and rent something closer to town just not certain.

As far as the comments about irreplaceable of my current property/house....I do also have a 11 acre piece of land just sitting that is approved for a home site and is paid for, That will be my ultimate retirement spot in a little off the grid cabin with mama and the dog. :)

[jluck]

House pending sale! :noon

[TJarv]

Congrats Jared

[CigarNut]

Congratulations!

[hotreds]

May the rest of your life be the best of your life!

[TJarv]

Are you going to purchase your parents place?

[PCR]

Just saw this thread, I have family over in Philomath! Congrats Jared!

[jluck]

Are you going to purchase your parents place?

Thanks guys!, we are excited, I hope the deal don't fall through.

Tony, We will more than likely buy my folks place and build a cabin on another property.

:tu