The Joys of Home Ownership: Part 1

After my wife and I married in 2006, we wanted to live together. So we made that happen in my parent’s basement.

My parents gave me a large gift earlier that year to help pay for a down payment on a house. I used that money to buy shares of AAPL, GOOG, NFLX, and a wedding ring. We had a little money saved, but our biggest leverage was that my wife had a six-figure job lined up in Boulder. So we had around $40K to put as a down payment. I don’t know if it was just because it was before the housing crash, but it seemed like as long as we could get 10% down, then we could buy whatever we wanted.

Since we were a young married couple without children or pets, we figured buying a condo was the best option. Living in Boulder would have been too expensive. With the help of my uncle, who lived in Broomfield, we narrowed it down to Broomfield or Louisville. This would allow less than a 30-minute commute to Boulder; or Denver if I could ever find a job.

Mandy went out to visit one weekend and tried to haggle a corner condo unit price down, but they wouldn’t take anything less than asking. We then both went out and visited some houses with my uncle’s real estate agent friend. He showed us some lived-in houses, but we settled on a partially built new home in a subdivision for $350K. Our agent got 3% for walking us into a builder’s showhome. We had to pay PMI on a 30-year mortgage at 6.25%, but we felt it was a better investment than the condo we were looking at.

We also didn’t have a backyard. So we had to take out a $16k loan from my parents to pay for a tiny deck and patio.

Should have done this instead

As our careers blossomed, we wanted more space and privacy. So in 2015, we sold our home for $445K. Thanks to inflation, $350k in 2006 equal $416k in 2015. We broke even with the landscaping, custom blinds, house painting, realtor fees, and almost ten years of homeownership.

In 2021 people would laugh you out of existence if you broke even selling the house you’ve owned for 10 years. We bought near a peak and weren’t even looking at the total housing market, we just wanted to invest and have a home.

Side Note: If you invested $10K in each of NFLX, GOOG, and AAPL in 2006, you would have over $2 Million today.

Our Second Home

In 2015, both of us had successful jobs and significantly more savings. We decided to go all in and buy a house for $700K. The house had an initial offer of $800K that fell through months earlier. We saw it was under contract but pressured our real estate agent to get us in as a backup offer. It was stressful as we were contingent on selling our old house (which recently sold in 2020 for $625k), and the buyers were having lending issues. The second offer ended up falling through, and we had a beautiful new “forever home.”

We put 20% down on a 30-year mortgage at 3.75%. We were house-poor for the first few years. The mortgage was half my paycheck, and we wondered if it was worth it. However, in 2020 we were able to pay off the mortgage fully thanks to holding my shares of SEND -> TWLO. Financially this was not the best decision, as the stock quickly doubled, but it made us feel at ease.

With the house paid off, we started thinking about what our future would look like.

Find out more in Part 2.

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