Foolish Guide to Buying a Home
This is multiple answers. I'm Southwick, and I'm joined as always by proverb book, personal finance expert here at the volleyball. However in this week's episode. It's the next in our series tackling major life events, by with advice from motley fool wealth management planner, Ross Anderson, all that and more on this week's episode of Molly. Sell bro. Yes. Howson what's up? Well, I got three quick things. Number one interest rates are plummeting. So you may have read about this in the news ten year treasury is now yielding two point four eight percent down from three point two four percent. Last November Marcellin the biggest drops in rates and certainly in the last couple of years. So why does that matter where we talked briefly on a previous episode about the inversion of the yield curve where short term rates are yielding higher than long term rates. Well, it solidly inverted there in March which traditionally in the past has happened before each of the last nine recessions. So a little worrisome. The good news, or at least neutral news is that doesn't mean recession is imminent. Sometimes there's a good year or two in between the time of inversion and recessions seeing we've got two years as exactly and the stock market actually tends to do pretty well after the inversion at least for that year, or so plus there have been false positives in the past. So it doesn't necessarily mean there's a recession, but it's something to pay attention to more practically speaking when rates go down the value of bonds, go up so March was a pretty good month for bonds and also mortgage rates are just plummeting. So we just went through the biggest drop in rates over one week period in ten years. So Tober mortgages thirty year mortgage was five almost five percent. Now, it's down to four percent. According to mortgage, data provider black Knight. That means they're about five million Americans who could refinance and cut point seven five percent off their mortgage. So. So if you're one of those people definitely now's the time to consider doing that. I'm glad I didn't just remortgage. Oh, wait. Why you always do it again? Number two. There could be new retirement laws on the horizon. So something very unusual happened recently in Washington, Democrats and Republicans agreed on something at least at least when it comes to the House Ways and means committee, so they advanced several pieces of legislation that if passed by the house and Senate and signed by the president would bring a whole bunch of changes to retirement accounts as well as five twenty nine and the thing is there is a good deal of bipartisan support for the. So just a sampling of what could happen. So it could be easier for smaller companies offer plans and offer get a five hundred dollar tax credit for automatic enrolling employees and make it almost required for for people who companies are offering for one case, let their part time employees sign up because currently they don't have to both of those things are good news. The small players and more coverage for part time employees because study after study shows that the availability of plan at work is high correlated to whether. Someone is going to save. So that's good news. It's possibly that. They're going to raise the required. Minimum distributions from retirement accounts from seven and a half to seventy two and I think that's just has to go up even further. But that's a good step. They're gonna Lau five twenty nine accounts to cover private school, home schooling and cover student loans. So that's a big change to. And then finally encourage for one case to offer a new ities. This to me is a little controversial the point is that 4._0._1._K's are good for people accumulating money. But then employers don't really provide any help on turning that into retirement income. So they wanna make it easier for a new it's to be included. So that could provide some sort of lifetime income the flip side. Of course, is that annuities often very expensive and actually are not very good for people. So be very interested to see how they make sure that the is that are offered within 4._0._1._K's are actually good for the folks. So we'll see what happens against not lie yet. But things are looking generally good for it. And if they implemented the changes and finally the popularity and possible creeping of Airbnb this comes from an article and Rico dot net. Lease the first part of it, and they have a chart that Americans are now spending more on Airbnb than Hilton. And it's now taking twenty percent of the entire US consumer lodging market. So that has all kinds of implications for the hotel industry for the real estate intrigue because many people are buying these houses to rent them out. So that's all good news for Airbnb on the flipside interesting article in the Atlantic with the title, Airbnb has a hidden camera problem. Oh, the rental startup says it's cracking down on hosts who record guests is it doing enough? So it starts at the story of a guy goes to rent one room and a two room apartment in Miami. Laying in bed looks up. Sees a couple of lights goes look at him. He's being recorded in his bedroom home. I gosh. Yeah. So he takes out the memory card, and then leaves Airbnb refunded his money, and then paid for him to stay hotel turns out there are lots of rules about this Airbnb does allow some videoing of people like on the outside of the house and in common areas, but it has to be disclosed to you before you rented, but I just found it kind of creepy article. It's a hot take. Controversial. So the article was mostly anecdotes. Right. So there's no statistics about like ten percent of people stayed Airbnb are secretly being recorded. But it just added a certain layer of like the next time. I do something like that. I might check around a little bit ahead some anecdotes of people finding cameras and alarm clocks and things like that. So just something to keep an eye on. And that by the way is what's up? Choice summer break. Everybody. So it's time once again in our series where we tackle major life events and this month, we are tackling buying a home. Thanks to Ross Anderson. Hey, thanks for coming on. So you not only have purchased houses in your pass. You are obviously also a professional person who talks to people about this topic do so he's a professional person. Amateur. I have winging the intro versus actually writing it. But yes as a professional person. Going to provide us with your professional and amateur IX. House professional impersonal. Sure. Sure. So well to be clear, I'm not like a real estate investor. I don't do this a lot. It's not a hobby of mine. I find it to be pretty painful isn't experience, but happy to talk through what what we went through. And kind of what we thought about and frame that in the context of maybe some good financial guidance. Let's make it clear why he is a professional person is your financial planner with motley fool wealth management. A sister company in the motley fool. That's correct. So you've actually broken this down into five easy steps to becoming. Steps we owe. You always want to sell something like five easy ways to do this. But buying houses, not easy, nor should it. Be because it's the biggest investment most people are gonna make in their lives. It's true. It's a massive asset for most people relative to their their overall NetWorth. And and it's a big decision. And it's a long term decision for for most of us. So something you should take seriously. All right. Then let's start with the first step, of course, is to decide whether or not you really should buy a house, which I think a lot of people think of as a given. They just assume I should be a homeowner adults adulting. That's just like checking the boxes. That's the next thing. I'm gonna do I'm going to get a job. I'm going to get home. I'm going to get a dog. Like, you know, maybe a spouse, you know, somewhere in there. We'll interlaced this with Shawn's episode that. Yeah. Yeah. No. I think the first question is should should home owning be in your immediate future or something that you aspire to? I don't know that the answer to that is definitely yes, I think homeownership gives you a couple of protections one against the inflation in housing. If you've been a renter. You get that letter because rents going up, and we just know that inflation's gonna gonna pass through so many different items. But I think you're kind of locking in that cost of the home in your tax bills. Still may go up as your Cessna goes up. But for the most part, you're kind of securing that cost of the the home that you're going to be in in kind of protecting yourself from that people talk a lot about the growth of real estate as an asset fun. Fact, you guys know the actual real estate growth rate at a national level for for homes. So the staff. We've used in the past were stats from David Lynch at MorningStar saying would you factor in all the costs of ownership like taxes and repairs? It's like inflation or a percentage point above inflation three point one. Yeah. So it's a very unexciting number. Yeah. So I mean, if you're in a market like a San Francisco, or or somewhere that home prices have been skyrocketing and have done so for a decade or more. You may think I'm nuts when I say that but home prices, at least at the national level are not this big exciting, go straight up really quickly sort of asset. But you don't have to put all the money into it either, you know, to use really simple math. If you buy five hundred thousand dollar home, and you put one hundred down the home price goes up by three percent. You've you've made a pretty good return on your hundred that you put in because you're you're borrowing most of that money from the Bank. And so I think you do get some leverage upside. But in the short term the things that can go wrong brutal. Yeah, they're brutal. And I think we've we've got some fun stories hopefully that we can share. Some things that have haven't quotes fun- fund. You know, is you smile through the pain. But I think every homeowner has gone through some of these things of just stuff going wrong that you don't plan for and and also the frictional cost of moving in and out of a home means that it needs to be a long-term decision. If you're buying a home, and you don't think that you're going to be put in that state and put in that spot for at least five years. I think you're probably making a mistake just the real estate commissions the mental effort to find into get into the transaction and the loss time, maybe at work of of spending all the time on this stuff it it's just it's a lot. The amount you spend getting your house ready for sale and then the inspection. And the things you have to fix the inspection. Selling a home is another is another episode, which I'm also going to do. So I don't wanna go to down. Save it for next week next month got it. But but yes, exactly I think there's a lot of frictional cost when when you look at it. And so if owning a home is your American dream. I think you need to to to wanna be in that place for a while, and you really need to be financially prepared. And so we're gonna talk a little bit about let's talk about how do you make sure that you are financially ready to buy a house? Okay. So I think most people think of the housing purchase in the component of a monthly expense. They think about their rent, and then they look at like what can afford relative to that. So first of all if you're going up, if you assume that your your mortgage payments going to be more than your rent start making that payment right now. And I don't mean paying extra an actual rent but start treating your. Housing payment as if it's more than it is and committing those extra dollars to savings. I really think that that's the simplest way to figure out. What can I afford? Now. I heard that I was mentioned on this show as the anti-budget this true Health Day. Yeah. So and I believe that I really am. I embrace that. I'm not a budget or where I want to figure out where every line item goes. But I do wanna figure out if what's left after I commit to those expenses is enough for me to live my life comfortably. So if you think that you're going to go up by five hundred bucks on your payment start putting that five hundred bucks and savings, don't touch it. And you can still spend the rest and see if if that's a comfortable space for you. And I think that does a couple of things number one. Is it starts preparing you for a down payment? Because now you're cumulating cash. That's all good. And we're kind of stress testing does our budget support this higher level of payment even that we haven't committed to it yet. So I think that's kind of one of my first things is start to stress test your budget a little bit to see what can you afford? Because if you go to the mortgage guy, they're going to tell you that you can afford insane amount exceptional amount of house. Right. They're going to basically look at what's the most. Could you borrow that? We think you're likely to probably not default, maybe. But if you do take your house from you. But at that point they've sold the mortgage any house exactly they they've made their money, and that's not a knock against mortgage guys. I don't think that that's an evil industry. They're allowing a lot of great things to happen. But don't look at the number that they show you and go, oh, oh I can't afford. It's ridiculous. How much you? We got approved for double what we should probably be living sane. It's it's a lot of our first house. We were like what we think we can afford this. And it was like there's no way we can afford this like, I know these people really men less. We just gave everything this is what they came back. Did you guys read these numbers, are you assuming that our only expense is going to be a house because it's not? Really what it's gonna be. Yeah. So so so I think that's the wrong way to determine the budget. But start figuring out what you can spend by actually doing it. And I think it's got to affects stress test your own budget, and you start to save a little bit more aggressively. The other thing is really that your emergency fund needs to be an bigger spot. So three to six months is the typical guidance. If you're on the three side, I think you probably need to be closer to six when you become a homeowner because there's gonna be big stuff, even a condo. Which is what I just came from I replaced every appliance most of them not out of choice, how water heater h vac system. Like, you name it dishwashers like it. Just it all breaks over time. Even if you've got decent stuff in there. And it's going to happen when you don't expect it don't get caught out of position and end up in a spot where you're kind of peddling backwards with credit card debt and everything else. I think you've got to have your savings level higher to go into a home and. Be able to kind of take the bumps and bruises along the rent or you just don't think about it. Oh, my toilet broke. Call call. It's a call. Oh, that was annoying. But now it's fixed, and you don't I don't know how I don't know how much it costs toilet into. No. It could be a million dollars. It's not I actually do know about how. But you like I didn't when I was in my twenties. And when I was renting, and I don't even think about all those costs, and boy, they add up a couple of rules of thumb that people use is you should assume that you'll spend one to two percent of the value of the house on annual maintenance. So if you have five hundred thousand dollar house five to ten thousand dollars year, or there's also a square footage rule of thumb so a dollar for every square foot or two dollars pricier place. So that just gives you a rough idea of how much you should plan. The thing is it doesn't happen each and every year. Sometimes you couple here's without anything. And then poof, you need to replace the roof for thirty thousand dollars. Boom. Yeah. Yeah. Right. What's? So now that you've become more disciplined with your finances. You're saving money. You're preparing yourself. I think it's time to start looking. This is the fun part. It's this is so fun. It's fun. And it's stressful. I dunno I out, but I still look at houses even today after I bought this house because I just like looking at him. I is it weird voyeur. Nick. People. Do look people stuff. My wife doesn't all time. Yeah. No. It's great. I mean, it's it's it's just important. I mean, we're not going to be living in the same house forever. So it's important know what's out there? What the market's doing and programs like reg Redfin. Zillow have made the so much easier. Totally and it's become fun. And I liked that the algorithm will like figure out what you're clicking on. And then show you other stuff like it. So it's it's like learning about what you're clicking on. I I also I'm partial to to red fin as a shareholder. But you know, I just think red fin has done such a good job of figuring out that pattern of what am I looking at and showing me stuff that that's going to be in my price range. And then maybe stretch it showed me some homes where I was like. I think he meant to show this somebody else. Wrong ross. But but I had so much fun. Just kind of kind of sifting through houses and looking at different neighborhoods. And if you do that earlier, you can kind of start to see the patterns of how long stuff sits on the market, and what are the really big things that are moving the needle whether that square footage or the lot size and the location, and you your personal once a list or need list is going to be totally different. It could be driven by school districts. It could be driven by the location and the commute here in northern Virginia that that's a super premium anywhere anywhere closer to the city. You're paying for it. Because you're you're probably going to be in the car less time. And then, of course, all the all the things on the home, the number bedrooms. If it's got a yard. How turnkey is it? Updated all of that stuff you'll start to get a feel for it in year market. And I think that that's really important to start really assessing. What are we going to get for our money because if you go into it with an unrealistic? Expectation of thinking you're gonna walk in. It's gonna be a turnkey home it. And I think even the first time we went through this my wife, and I we were used to seeing some of these HGTV shows and they're brutal because they'll go, okay. I've got like, you know, we want to have an acre and a half and at least twenty five hundred square feet and two car garage and our budget's two hundred ten thousand and then they find it. And you're like what where did that exist because that that's new on near the pricing here. I live in a shoebox for that amount of money in in DC. And so, you know, get start getting used to your market and just what you're going to get. And I think that you'll be much better calibrated for when you get serious and ready to do that when you're buying a house with someone else. It's funny. How hard it can be to communicate what you really really want in a house because Ron and I were shopping for a house for years and years and years, and and I still don't really know what appeals to him in a house versus what appeals to me. I know. It's different. I know it's different because we would go. Oh, we will go see to open houses. And I would say, oh, my gosh, we have to and they're effectively the same house. Same neighborhood same number of bedrooms bathrooms and be like we have to an offering on this house and say, what are you couldn't believe? No, we have to run this other house. It's crazy how you can think you're aligned on paper. But when you actually get into a house, it's like, no, I hate that house, and you're like. Do you guys have that problem decorating to is it designed thing? No, I think we're more aligned on decorating. Although I have concerns about where he wants to put our couch. Like, he has it slammed up against a wall. And I think the funk Shwe's all wrong. It's not centered on the fireplace. And I don't know. So I mean, people heads all the time. But it's funny. How you can think you're aligned on paper. But then it's not until you actually get into a house that you're like, oh, no. We completely disagree. All right. The bottom line is really the housing to a large degree is emotional issue and psychological issue. Totally. I think that is you you could compare to houses fine one and renting one and financially. They work out even for you. But there is just some psychological benefit for some people because the houses their own that can do what they want other people like the ranting because they're not tied down. Totally. Yeah. I mean, I I think that doing what you want thing is is probably both being overrated in underrated by by people when they think about it because everybody wants to do this stuff, and then you get into it. And you figure out what's he gonna cost me to do that thing if I just because again, this shows make it look so easy. I'm just gonna like bump out that wall. That's like the most common term on TV and home renovations that out. Yeah. Just like, you're taking them walls, serious work. Drywall guy, you need the paint guy. Redirect the vents. Yeah. The ductwork is all God ago. And by the way, someone drill through the Joyce gosh, they always drill through the Joyce. Always they just cut through mind. They just cut through. They just do that entirely. Like what's that needed for? That's not holding anything up is it, right? No more the floors. What is holding up? Not sure who does that every house. We've lived in. Someone has gouged out large. Parts of joists is insane. If you're listening to this right now in your joist cutter Dopp, please stop killing us. You're killing us. Man. Yeah. Anyway, all right. Personal the personal comes into the professional. Okay. So all right. So let's now you're looking you're well tuned into your market, you you've saved some money. It's time to actually get serious. You gotta get a pre approved for the loan. And I personally used a sponsor that shall not be named rocket mortgage. I did I'm S consumer access dot org. Number twenty twenty. Thirty thirty. I used used rocket. I did. And the reason I use rocket was because they offer a very inexpensive recasting process, which I I don't know if anybody has ever thought about recast recasting, so recasting alone is if you're going to make a big payment on it at some point that can either go to principal and you'll pay off your loan sooner. Or you can have them readjust the physician schedule. So it actually lowers your payment. The reason we did that or wanted to do that. We haven't actually done it yet is that we hadn't sold our condo. When we were doing this. We were making a smaller down payment than we thought we were going to. And then the the plan was to sell the condo use. The proceeds of the condo to lower the mortgage. And then we're going to lower the mortgage payment as a result. Now in my particular case, all of that money has now gone into renovations in my home. Because we wanted to bump out a couple of walls. Yeah. Just just bumping out. But that was at least the plan. And now at some point I still may do that. But haven't yet take all that space? You have now it's true. It's true. I I had a bathroom the master bath looked kind of like a hotel room. There was no the vanity was in the master. There was no space. Really? Yeah. You just like walk over to the vanity while you're in the master bedroom. And we were like that isn't that? It's not gonna work somebody getting ready early in the morning wakes everybody up. That's problem. So just bumped out the ball. Yeah. Yeah. So, but so the purpose of the pre approval, though is first of all, you know, how much you can par. Correct. But it also put you in a stronger negotiating much though. Yes. So when you're submitting that that letter basically saying I have access to these funds. They've already looked my stuff. You're making a much stronger offer that that you're likely to be approved for the financing. If your offer gets accepted. The other thing. And I thought this was fascinating is that they're doing all of the pre approval stuff through account aggregation now. So it used to be that you had to submit statements over and over and over and over again that they kept asking okay, what's in the Bank account now. And so this is like a long process for you. You'd have to send them months and months worth of your Bank statements, and it was just a pain in the neck. And now they just connect to it. Like, I'm dot com, or you know, some of these other aggregated, and they can just watch and they can see if you spend all your money and tried to move it from one pocket to the other. And so they they don't have to keep asking if great it's easy and a little creepy. Yesterday, because they're probably still watching probably spent all that on a wall. No. But I think that process has improved quite a bit with with technology. All right. And so you we've only ever worked with a realtor obviously companies like red fin. And Zillow they offer or Zillow also offer you to not work with a realtor and you work through through Zillow Zillow's still doing advertising realtors. Yes. With red partners. Yeah. So with red venue can go with them, and it's cheaper or I guess you can just go Kuka crazy and not use a realtor. I wouldn't recommend it. Yeah. Yeah. And now, you're you're ready to make an offer. And one of the things that our realtor did help us with in this case, I think making an aggressive offer justifying it one of the things that you'll see people do is decide that they're gonna throw like a low ball offer out there. Like, okay, the homes listed for four hundred thousand. We'll send them three fifteen and see if they accidentally sign it. And I think it's important to remember you can be aggressive on on your offer. But there are people on the other side of that that may now be insulted that you've deemed their home not worthy of anywhere near what they're asking for it. And so as as the receiver of that offer, you could choose to reject it, you could choose to counter and most people will counter or or they could reject it flat out. But if you're in a reasonable range and they're motivated seller. They'll probably counteroffer, but if you justify why you're offering something lower than with. Asking for I think we had much likelier chance. And that's what we did. So we sent the comps and basically said these three homes around you sold this one sold for exactly what you're asking for. But it was updated had better bathrooms better yada, yada, yada. And I think it put us in a better position. Instead of just saying we we don't think it's worth that. We said this is why and I think they had to take that more seriously. And they ultimately accepted that offer after a little back and forth. All right. So you make your offer and it gets accenting. We gotta deal you are under contract. Congratulations. Don't get too excited. Right to me. This is like being in a car dealership. And then you decide what car you want your like together with price on the sales guy. And then they walk you back to that Eboni guy in the back, and you're like Lou he's trying to sell me the undercoating thing on the car, which don't don't buy that cash panda in the trunk that we forgot to tell you about all sorts of stuff. So this is where you get to assuming that you wrote an an offer that is contingent on an inspection. This is where you get to go and dig through all of their stuff or mostly the home, but their stuff will probably still be in it. So in the home inspection, and we we've made a couple mistakes as part of this process, the home that we bought was or is on a slab construction. So means doesn't have cross base. It's just sitting on a big block of concrete, and there were some cracks. And there was some clear movement in the concrete, and it started making nervous. We thought oh, my gosh is the is the foundation of this house wrong. And we got so nervous about that. That we kind of forgot all the other stuff that was in the report. So we ended up having a foundation expert come out. He looked he said. Yeah, it has moved. But it settled it's fine. It's going to be good. We went. Thank goodness were. Okay. And so for example, they had told us that there were some some droppings up in the attic didn't really pay much attention new because we were like, it's fine. It's no big deal to house was built in nineteen Seventy-three note. No biggie. It turns out they recommend droppings. And it was a massive problem. They were up there tearing up the installation, and it was exceptionally expensive and people sit didn't your home inspection catch it, and it did I think. It really isn't too to have been caught by surprise. Yeah. So read the whole thing don't get fixated on one problem because we we were just like so relieved that the foundation was okay that we were like everything else will be small potatoes. The housing inspection is going to be forty at least in our experience. It's like forty thousand pages like every little thing every little thing that it's easy to it's easy to get lost. This little stone on your front drive was little loose tripping. Real problem. You're going to take care of that. Oh, by the way, there's droppings. It's it's raccoons dirty, Mike and the boys living your attic, don't worry about it. Right. And that's what we named our actions. It helps name critters. It was. It was great. But they're remove. We've got new insulation. Fancy. New patchwork all over the house later. Correct. Yeah. Yep. So good. So. Yeah. At least it's not moving. It's not moving. So I do also recommend if you're if you're in more of a fixer upper sort of house take a contractor in there with you. You can do that as well either. As part of the home inspection or book, another time with the current homeowner and start figuring out what those projects are going to cost, you know, and and you don't have to commit to doing those things right there, obviously. But if you're going to do some renovations, you can go into very clear eyed about what's going to happen to you after he closed on the home. We had I think Robert he suggested on the show earlier to your realtors probably going to recommend someone to do the inspection for you. But I a full recommended that you find your own inspector. And you find your own person that you like and trust and get recommendations because it's in the realtors interest that you don't find anything wrong with the house, and that you move forward within that you enjoy it and get past it, and so rob had a bad experience. So he. Suggested finding your own inspector. Yeah. Because the in many cases that realtors in a position to make that referral of bunch of times over right? They're gonna have hopefully many clients and send them back to the same inspectors assuming the inspectors continue to do that ours. Gave us a few choices. But but yeah, I like that to do kind of your own independent search to find your own people. Right. So you put in the offer you did the inspection. Everything's great. You're about to be a homeowner closing day. Get your money ready. All your money, you're signing hand. Yes. There's nothing sadder than going through all of the documents and seeing every single place the county in the city and the state and the title and the courthouse all of these people have their in your pocket somewhere along the way. It's best to just ignore. It get down to that number at the bottom and signer check. But to to to that point if to go back to when you're making that deal. He'll if you're light on cash, you can ask for more in terms of like seller assistance towards the closing costs. Maybe instead of negotiating price as much. So if your first time home buyer, and and otherwise, the down payments the challenge, maybe that's a better negotiating point for you. Because when you get to this closing step, it's still gonna take some money to get through the closing costs. But so so now, you're there you are going to be a homeowner. I think the final thing I would say is decide if you're going to do any work to the home before you move in. We had a popcorn ceiling and home was built in seventy three. We weren't like super in love with it. And they hadn't band best Ohs Houston Seventy-three yet. So we didn't really want to be in the home or have our pets in the home when they were doing like the removal on they ended up going right over it, which I thought was kind of cool they buried it. So now it's under it's still in there. But it's under a like a layer of plaster and all his anyway. But we wanted that done before we were in there. And so kind of deciding so you're ready to go kinda shovel ready right after you close. So that you can get in quickly as possible. You know, prioritize those items, and I it's fun to start meeting your neighbors. My my my grandfather used to say, I've got the best neighbors in the world. I don't know them. They don't know me. But I, you know, I I like that sense of community, and, you know, having a little little dialogue of who's who are the people around you think that can also help you if there's ever a dispute of any kind that that people like, you know, you, but and then you know, after after that it's really about getting back to the savings game. So whatever else is on your horizon. Whether that's retirement whether that school for your kids, whether that's home improvements now that you're in the home, you know, get back to being disciplined as soon as you can and enjoy yourself. I, you know, I think now that we're in it, and we're basically through our first wave we've got our our final projects on the inside of the home being finished right now, which is the the master bath. It had the crazy vanity in it first of all super excited because even though the most of the home is starting to feel like home getting all the contractors out of the house is going to be a nice feeling right right now, we're so used to them being in there. That's like they're living there. So getting. That done and finally being beyond it because we did buy a little bit of a fixer upper, and we knew that price points in Fairfax county are nutso. And and so we were trying to come into the spot where we could still afford the home and then make it our own. And I think that's kind of the cool thing about not buying something that super turnkey. Is that it's gonna feel like us when we're done with it. It's our design if people think the tile sucks, I don't care. I picked it. This is what I want. So I'm super pumped about it. We've got some projects that'll be outside next. But we're gonna try and do as much of that ourselves and just, you know, cleaning up the art and all that. But yeah, no, it's fun. It's fun to have a place that feels like it's you it's fun to have a place. That's yours. I think my biggest takeaway from we've bought two houses. Now at this point in our life is that it costs way more than you think it's going to definitely absolutely. I don't know what the exact number is. But if you go from renting a house renting renting a place to buying a house. House like you just don't think about well. Now, I have a yard which means I need to buy everything to take care of this yard. And now I have and things again things are breaking all the time. And it's and even just the closing costs and how much it costs to actually buy a house. Everything costs so much more than you think and it hurts much. It's the truth. And you know, people say I'm renting I'm just throwing my money away. And like, yes, you're not you're not getting equity when you're renting, but you're taking on a lot more risk for that, equity and and effort. Yeah. And if you get popped a couple times early on like big expenses, even the amount of equity that you're going to get over maybe a couple years because you, you know, early on in a mortgage, if you look at the physician schedule, you're not chipping away at the loan very much in this first few years and might only be like three four hundred bucks a payment. Even if you're making an eighteen hundred dollars a month payment, and you know, one air conditioner goes out on you five thousand dollar expense. And all of the equity, you would have accrued in two years is gone. And it's like oh. What a bummer, and it's like, yeah. Now, you're you're cool in your comfortable. But that sucks. Yeah. And so if you're having trouble saving money already buying homes, probably not for you yet. You've gotta get disciplined. I and get that even if it's the anti budget like me, and you just want to start saving money and ignoring the rest of it goes. But you've got to have that discipline Bilton before you get into the home buying purchase. Yeah. Yeah. I don't know. How many times I've spent thousands of dollars to buy what I thought I already had. Yeah. A roof. Water. That already been by water heater. Yeah. Yeah. Yeah. Oh, man. We're ending on such a negative note. Now, it's it's good. And if you do house that you stay in for a long time, it can be an asset later on in life. If you retire because then you're downsizing move to lower cost part of the country or you do get a reverse mortgage. So it's not a complete waste of money. Sure. But it is a long term commitment. It is it takes a long time for the math early work out in your favor. And yes, you are making a payment you're paying off that and you're doing all of those things on a month to month basis. But but assume that it's going to take longer than than you would want it to. But go for it on that note. There and prop up the housing. I'm gonna make you stick around. But I also have some more to say here. So all right. Our sister company motley fool wealth management is a registered investment advisor that can help you put your financial plan and investing needs in the context of your big life transitions. If you've enjoyed learning from Ross or the other motley fool wealth management planners, we've had on the show guess what you can get even more of them in your life. Because I think people want to hear more about more stories about I'm sorry dirty. Dirty dirty. Mike. Visit full wealthed dot com slash radio. You'll find podcast notes and resources, and you can even book, no obligation appointment with Ross or another planner. You've probably heard on the show, please consider the risk cost and suitability of investments before choosing any investment professionals. All investments involve risk, and may lose money Malaita wealth management does not guarantee the results of any of its advice or account management Rossio stick around because I'm going to try and sell you guys in sane house. It all right. Initially when I was planning for the segment, I was just gonna research crazy houses and have you guessed how much you'd pay for them or how much they sold for. But I landed on this one house, which is just so perfect. I think that you guys are going to want to buy it. And so I'm going to tell you the story of this house. And then I'm gonna let you make some guesses along the way about what what turns this story takes sound good. All right. So first off the house is a vast limestone cave on two hundred and forty acres in the Ozarks one hundred fifty miles northwest of Little Rock, and it's called the Beckham creek cave. It comes with a fresh freshwater spring. How much do you think you would pay for it in nineteen eighty three teeth three? So those are actually quite beautiful. But then again, it's Arkansas land is cheaper. So how much land was it again two hundred and forty acres and the cave is about a mile and a half long comes again. It comes to the freshwater spray was time. I bought a cage. Yeah. Well, your cost per acre back in eighty three. I have no idea one hundred thousand dollars. I'm gonna go low and say you could have picked that up for twenty five thousand. Well, if you're John, hey, founder of the celestial seasonings t company you paid one hundred forty six thousand dollars to convert this Kate into a bomb shelter after watching what ABC nuclear holocaust show. Oh, I remember this. It was the last day or something. Like that knows it took place in Kansas the morning after that's it close. You're probably too young Russ. I've no idea what you're talking about. It was called the day. After after do you? Remember this show? Remember, so there's a pill. Those both with cataclysmic. So it was a show on this before everyone had cable. So we're all mostly stuck watching the the major networks. It was basically a show. What America looked like at least one time in Kansas after a nuclear war. Everybody watched it. Everybody was the last episode of mash, everyone watched it. Yeah. So John, hey, again, the co founder of celestial seasoning company, which has its own Kuku crazy story. He watched this. And he was like I got I got I got a bomb shelter. Now. I gotta make a bomb shelter. So he invest to invest. I dunno t takes two million dollars to convert the cave into a fallout shelter. It has a hydro electric power supply. Forty foot rock ceilings and enough freeze dried food to feed fifty people for two years. Also, a lovely dance floor. We hold up with fifty people for two years chefs fun, apparently they him and his he was in a religious group. And apparently, they even used it a couple times during some bomb scares. But anyway, eventually he realized okay, we're not going to have nuclear outright war with Russia. That's right. When you right when you so in nineteen eighty seven he sells the property to someone only known as Mr. Richardson who invested that person, then invested six million dollars into converting the place into a nightclub opening night. Again, we are one hundred fifty miles north west of Little Rock. Over the nightclub. But okay, six million dollars night. Boasted some big name celebrities, including can you name at least one it's nine hundred eighty seven. The Randa ran. I do like a little standout ballet they were. They were doing the. Professional athletes. It's nineteen eighty seven. I'm just gonna let you guess celebrities. Benetton? The guys for Miami. Vice? I have no else. Wow. Okay. Hint hint. The the biggest celebrity in one thousand nine hundred eighty seven Michael. Really supposedly Michael Jackson, Diana Ross, Elizabeth Taylor and Arnold Schwarzenegger. Early went to this nightclub. I'm sure pep Benetton. Was there too? She just didn't make your list, so John. Hey, repurchased the property in nineteen ninety four and turn it back into a house. So here's some downsides to living in a cave. The stalactites drip, that's annoying. The backyard is a mile and a half long cave that is home to bats and other critters that find their way into the house now, and then coons it's always sixty five degrees. So it had a few owners. But most recently it was listed in two thousand eighteen for how much. Seven fifty seven hundred fifty thousand. No, it was a six million dollar nightclub. But there's. Allison's games. Have you? All right. Well, yeah. I was going to try and inflate the number from there. I'm going to say it's worth fifteen million. Okay. That's a little high. I guess I was going to go back with the original number close to broS hundred thousand two point seven five million. Oh, well, but it's now a vacation rental, and you can stay there for the low low price of how much night. I'm apparently really bad at this game. Everyone's mad at this game. Fifteen hundred. Six hundred bucks twelve hundred what I love about this house is that it tells the story of America, it's a bunker during the early eighties. When everyone was freaking out about nuclear war with Russia then in the mid eighties. It was a nightclub where celebs did cocaine with each other. And then it's not really clear what happened to it in the nineties and the arts, but now, it's basically an Airbnb. This place, and it's a cave, Arkansas. So yeah, maybe we should visit sometimes the real back cave. The there you go. They have postcards listeners just an idea just. It actually the renovation. You can go there's a website. So you can go and look it up online. And it's actually venerate renovation was really lovely. It. Looks very cool. Are really nice. Yeah. So we're gonna we're gonna go stay there. One night to have party. I'm a little scared of the because the show. Shows dark. Yeah. Ding, ding, ding, ding, X two. I can't remember which town, but it's lovely. We should do a live podcast there. Can you can you imagine? It'd be me talking. And then we just echo and then a bat would fly into us. Oh, all right. Well, that's the show Russ. Thank you so much joining us. Of course, I hope my my own experiences can help somebody else out there. Absolutely. Sure. And for our listeners, don't forget head to fool wealthed dot com slash radio. Four more episodes in this series and book, a no obligation appointment to chat with a monthly full wealth management planner the show is edited cavernous Levi by Rick angle. Our Email is answers at full dot com. Forever, bro? Camp. I'm Alison Southwick. Stay foolish. Everybody.