Next week, we move.
I’ve just invested around $24,000 to fix up my dream house and If all goes well with my new business I’ll put another $30,000 into it before the end of the summer. It doesn’t sound like a lot for a nearly complete remodel until you hear that I’m only renting it.
I’m a financial and legal expert and yet I’m making investments in a rental that from the outside looking in appear to be insanely stupid.
Here’s why I’m investing more than $50,000 in a rental.
This house is truly my dream house. It’s 4 houses from the beach in Hermosa Beach on one of the best walkstreets and next door to my daughter’s best friend. It has a porch, an office above the garage, a basement apartment, 3 big bedrooms and an ocean view. The land value alone is close to, if not more than, $3,000,000. The house itself is in pretty bad repair, but it’s livable.
I could not afford to buy this house right now. And yet, I’ve been dreaming about it (or one like it) ever since I moved to Southern California and discovered Hermosa Beach.
6 months ago or so, the owner of this house was moved into an assisted living. His sons and I began talking about whether they were going to do what was necessary to fix it up and rent it. They were initially reluctant, but I was kindly persistent and poured my heart out in a letter to them about the house being my dream house and that I would do whatever was necessary to make it super easy for them to rent it to me.
They agreed to give me a great rent and a 3 year lease in exchange for my taking it pretty much as-is (they paid to have the windows replaced, the carpets taken up and hard wood floors underneath sanded and to have the roof repaired).
I didn’t hesitate for a second. It’s my full intention to buy the house when they are ready to sell. I just need to save up $600,000 for the down payment. If all goes well with my business, I’ll have it within 3-5 years and I’m just praying they aren’t ready to sell before then.
Yes, I’m taking a huge risk that I’m investing thousands of dollars in a piece of property that could end up never being mine. But, when you factor in the rent savings I’m gaining when I move out of my current place and the overhead reduction when I move my office into the space above the garage, it’s pretty much a break even. The longer I stay, the better it will be, of course.
And, I get to live in my dream house today instead of waiting until I’ve got the money to buy it some time in the future. Life is lived now not in the future. Don’t put off your dreams. Get clear on what you want in your life and let it happen now. There’s no reason to wait.