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Moving to HCOL; Rent/Buy/Build

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  • chucki
    replied
    Originally posted by StarTrekDoc View Post
    Safest bet: rent for awhile to learn the lay of the land; commute patterns, districts.

    Worst idea: buy for custom build in unknown location.

    You can buy a starter home to rent/flip in the future if you're into residential RE ownership (big caution given your prior statements too)
    This makes sense. So assuming I buy a "starter home", I have 2 questions:

    1) Does it make economic sense to own the home for ~ 2 years?
    2) How does one finance building a house while also paying mortgage on the starter house?

    I am very debt averse, and have been out of that situation for well over a decade. But with these costs, there's no way I can cash buy.

    Leave a comment:


  • CordMcNally
    replied
    Is Rent/Buy/Build the real estate equivalent of Marry/Kiss/Kill?

    Leave a comment:


  • StarTrekDoc
    replied
    Safest bet: rent for awhile to learn the lay of the land; commute patterns, districts.

    Worst idea: buy for custom build in unknown location.

    You can buy a starter home to rent/flip in the future if you're into residential RE ownership (big caution given your prior statements too)

    Leave a comment:


  • chucki
    replied
    Good points, I don't know anything about building. The top local builder in the town we are looking at is charging $600-700k for 2/2+ acre lots and then requires building starting at $200sq/ft. That is with no upgrades. I have no idea how the rate hikes with the upgrades. And there are no remaining lots and I hear his next project will be $800k lots and minimum 6000sqft house. Seems like price gouging but I have no idea, total n00b about this stuff kind of stuff. I am still trying to figure out what the best option to transition to this new locale.

    Leave a comment:


  • SLC OB
    replied
    Be careful... building in a HCOL area may be much higher than you would expect.
    Example... I live in a HCOL area (wouldn't say VHCOL like silicone valley but price per square foot right now is ~$550-600 for basic trim packages).
    My brother live 3 hours away in a MCOL to LCOL (LCOL for California but more like MCOL for US).
    He put in 3 air conditioner split units. He had a guy come out a prime the lines, check for leaks, charged $200 for all 3.
    He gave me an extra unit. Told me it would be about $1000 to have installed and check for leaks. We were quoted $4500. ... so he came up and installed with my husband. We still needed someone to prime the lines and check for leaks. The guys would not quote on phone, got here and were going to charge us $1300 for our one unit!!! Luckily, there is YouTube, husband watched a video, bought an open box piece of equipment off Amazon and for ~$100 did it himself in 30 minutes.
    Absolutely ridiculous! Be careful, the building costs are astronomical here.

    Leave a comment:


  • chucki
    started a topic Moving to HCOL; Rent/Buy/Build

    Moving to HCOL; Rent/Buy/Build

    Mid-career and planning to move across the country to a HCOL area in about 4-5 months. My job is location independent. Buying a decent-sized, nice home is around $1.3M. McMansions are well over $2M. Not many rental options, but seem to be $6K+/mo if and when available. Building a dream house would cost $1.8-2.5M (estimating). We are used to living in a much cheaper part of the country and have a paid off house, probably now worth $900K-$1M. My dream scenario would be to keep the current home as a vacation home (have long-standing roots in the area and yes, I know the rule about 1 house). If we don't use it much in the next year or 2 (which is quite possible) or decide to accelerate FIRE, will sell it and put the capital into HCOL housing.

    I know it's hard to predict real estate values and prices are crazy due to demand and inflation. I would really like to build a house and seems it's probably now or never if that's going to ever happen. Option 1 would be to rent a house and then build, which I would think would take 1.5-2 years. Option 2 would be to buy a house and then build simultaneously...but I guess this could get tricky because I would have to service 2 loans at once and I'm not sure if that's even possible -- I don't know much about bridge loans but a friend mentioned them. I have read that one should live at least 5 years in a house to make it worthwhile -- is this true? The problem with Option 1 is that rentals are far and few, and not really that great and seem to be quite costly. Would appreciate any advice. Thanks.
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