Everyone ready to get super honest about money? Cus here we fucking go. (Wu-Tang is for the Children)

Content Warning: Frank discussions on finances and mental health

One of the best lessons a friend and mentor (to whom I no longer speak) taught me as I began producing theater and eventually directing my own plays was that in the field of projects there is a firmly defined triangle of needs. This differs from Maslow's Hierarchy, which has its own key applications in the creation of art. This is Pick Two of sorts where no matter how hard you try, you can never attain the third choice.

The real test of mastery here is giving oneself over to the realities of the underlying truth. To expect a task to be carried out quickly and with quality and then to decide that it can be achieved for lesser cost as well, is to unwittingly remove quality or efficiency from the process regardless of personal whim. So give yourself over to this truth, allow it to permeate your decision making and you'll reduce the number of rework back loops in your way.

Of course when designing a house from the ground up on top of carrying out necessary physical renovations there are a number of other heuristics one must implement to scaffold the process. Low cost is relative, isn't it? For our situation there are items and tasks where we've purposefully rejected frugality in order to meet our quality goals. But then again, low cost isn't strictly financial; we've been using our labor hours to do the work and we've logged hundreds of hours in just 6 months; certainly not skimping on cost there. 

Quality has been a focal point when Brie and I are laying out a project. We know, for instance, that though she and I can sink 20 hours into a task, our technical skill in certain arenas just won't meet our quality needs. That's where the cash comes in.

And of course the one resource we have in spades is time. Time and physical labor are nearly identical resources for us, as, given enough time, we'll be able to muster enough labor hours to bring down the cost. At least until I dry up and blow away like I chose the wrong grail. 

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But let's talk value, let's talk cost, let's talk CASH

I happen to know that a few of you are addicted to Zillow and Redfin. Brie and I leveraged these sites in the build up to buying this house and below I'll be referencing some Zillow numbers again, but I would be remiss if I didn't mention that sites like Zillow, that on their surface act as a free (w/ premium unlocks) service to allow home buyers to shop online and compare prices, searching by a mind boggling series of metrics, were taking user data and buying up properties in desired areas and then raising the market prices playing a role in the massive housing crisis we find ourselves in. Shout out to Air BnB also for allowing wasp-y couples to live their dream of being landlords with hundreds of properties rented out in cities they don't own while locals struggle to find affordable housing. C.R.E.A.M.

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Brie and I bought this house for $360,000 with $5,000 brought by the seller at closing. There were no good comps in the area as this area sees very little turnover; our next door neighbors have lived here for 5 years and are still considered 'new.' I can say that it was listed at 2000sqft, sits on 2/3 of an acre, was built in 1966, had relatively new HVAC, roof, and water heater, and is 10 minutes from National Harbor and another 15 from downtown D.C. The area is a peaceful, wooded, rustic suburb, less than 30 minutes from multiple urban centers. 

As we dug in and researched the original permits we found that the original owner (from whom we'd purchased), had avoided filing permits and danced around code by doing upgrades himself. He was not without some skill of his own but as I've outlined in a previous post, we have a 450sqft converted carport that has no insulation and a water seepage issue in the SW floor corner. We purchased knowing this was a project. Brie wanted to make a house hers, while my biggest fear was finding ourselves in another house nightmare like my house in Knoxville, which I purchased at the top of the bubble mere months before the housing collapse in 2008. That house ruined my finances along with my mental well being. I barely made it out of Knoxville alive b/c of that house.

To be very, very clear, I'm listing the below costs in the interests of transparency. This wouldn't be much of a record if I didn't have the integrity to be honest about the choices we've made and the resultant success and failures. The United States has a major wealth disparity, we tend to demonize the poor and lionize those who were born rich. Brie and I are were privileged in many ways growing up and that allowed us to be able to make passable wages (though both below what most think of as middle class). 

A couple of things to note (1) we have paid cash for everything; we are not building/renovating using credit. If we can't afford it, we don't do it. (2) If you have any questions about money and costs vis-à-vis your own house search or renovation, we're 1000% happy to talk to you and share our experience and advice. (3) Later in this post I'll talk about how we're financing the work b/c our salaries would not pay for all of this. (4) If you have thoughts about the money we've spent that's critical of us, please take those thoughts and cram them up your ass. Life's hard enough.

Here's as complete a list as I've been able to pull together detailing all of the costs tied into the big 3 of a renovation: supplies/tools, professional services/labor, and décor/design. I'll present context when appropriate. 

Landscaping Costs: $16,600

• $6600 Topping and trimming of trees when we moved in. The former owners had not properly tended the 75-100ft tall trees over hanging the house. This was a safety rec from our home inspector and then confirmed from multiple other sources. Better this money now than the cost of a new car or roof due to falling limbs.
• $1800 Leaf removal and yard cleaning on move in. As noted in previous posts the owners had let the yard fall to pieces and instead of spending months just raking and hauling limbs, we paid our yard team to remove it in two days. Definitely helped with the water situation.
• $8200 Swale re-engineering and French drain installation. This has shown up multiple times in the blog. Nothing has more changed our property and outlook for then future of this house than this work we had done. The yard is shockingly dry now and promises to be manageably wet when winter comes back around.

Other Professional Services: $5,350

• $1100 Emergency electrics. This is the work done by the infamous Barry. We needed an electrician to make the house safe from the choices of the previous owner.
• $1500 Drywalling and painting of the bonus room. This was the work done by Cesar's team to turn the bonus room of the primary bedroom into an actual usable space. He also fixed all the holes Barry made.
• $500 Rug cleaning. This was the Kevin money. In retrospect the cleaning of the heirloom rug was probably worth the whole amount, but we have ended up retiring the other two rugs we had cleaned. Lessons learned.
• $1300 Designers. Brie and I are far from conceited, perhaps we need could use more of that. As said before, we've never designed a whole house from a blank canvas and though we have great confidence in our personal style (both individual and joint) we wanted to make sure we got professional help for at least the first step. We teamed with a design firm to help us create the vision for the primary bedroom. We met remotely and they put together renders based on our descriptions and taste. The experience was informative in that we spent far more time explaining to the designer what it is we like/want then they did delivering any of it. The pricey lesson here was that we should feel empowered to trust our vision, cus we clearly know way more about what we like than anyone else is going to provide.
• $300 Orkin. We have a spoopy lean-to full of old wood in the back yard. We're spending June and July tackling this and other yard projects and didn't want to get stung by wasps.
• $650 a giant dumpster. Did you know you can just have a 20ft dumpster brought to your house for a month? It's great! It's better than PODS! We're tearing down the side deck before it kills us and all the yard projects will end up in the dumpster.

Tools and Supplies: ~$3400

• It's hard to break this down, but we've gone from a very modest collection of basic manual tools and drills and have expanded our collection to include a circ saw, reciprocating saw, table saw, miter saw, router, angle grinder, etc. We now have the proper tools to build/finish most every room in a house.

Décor/Design: $11,300

• $6300 Cork flooring for entire house. We purchased everything all at once to ensure this natural material matched. Knowing we have it in house all allows us to work piecemeal and not worry about supply.
• $340 Paint. This is the paint for the 3 renovated rooms.
• $835 Craft room/guestroom. This covers the wallpaper, bed and mattress, head board, side tables and lamp.
• $3300 Primary Bedroom. platform bed, head board, two end tables, 3 rugs, new bedding and pillows, shears, drapes, lamp, and curtain rods. 
• $350 Bench and rug for front room.
• $175 dog waste station. Yes, I bought us one of those green poles with a box of poop bags attached for the far end of our back yard so we always have needed supplies and a place to put everything.

Approximate expenditures: $36,650

Where did we get this money? Well most of our monthly money goes to increasingly high cost of living. For the 4 years we were in the apartment in Annandale we were paying into a slush account; we'd found that a useful tool over the years always have a few thousand there to spend on large purchases. Brie had a mutual fund she had been saving for something like this, so she cashed that in for nearly $10,000. I had saved up about $3500 over the last 18 months knowing this was coming. I also did the thing that supposedly you don't do. I cashed in the bulk of my retirement. 

Now, I have a 401k through my current employer that I didn't touch, but the TIAA CREF account from when I was a teacher had gotten up to about $50,000 again. I say again, because the Knoxville house had so fucked me over financially that when I left my teaching job I had to withdraw a large sum from my TIAA account 4 years ago to pay off the massive debt I was in. After paying off my accounts I closed my credit card and haven't taken on any new debt in 4 years. The only lingering debt was the $2,500 pay off on my car, which I paid off in February thanks to this withdrawal. Debt free living. So I took out a chunk of my retirement, paid taxes, set aside some extra in case there are more taxes, and am  using the bulk to help renovate the house. Though at this point we're nearing the end of this run of petty cash.

Of course by purchasing all of our tools and all of our flooring ahead, the vast majority of the renovation needs for the house are going to be small incremental costs like paint and furniture. Except the bathrooms. That's a 2024 project.

A couple of things here regarding this financial path: the odds of me being able to retire in 25 years based on current economic trends is about 0%, the odds of me needing a house in 25 years is probably 80% (in the other 20% I'm dead and in that instance Brie will still need a house). Look at the stock market, I would've lost more money by leaving the money there than be paying the penalties and buying a house. Wild times.

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This all means we're currently in to the house for just over $390,000. Let's see what other properties with this much house, this much land, and have recently sold at or around $400,000 look like.

Here's a sale from just this week. It sold for $407,000, is about 1400sqft, is from 1951, on 1/2 acre, and has been renovated so it looks exactly like every other renovation from the last decade of house flips but poorly done. Depressing.

This one sold last month. $400,000, 1500sqft, built in the early 70s, 1/3 acre, and is a combination of recent renovations that seem safe and bland and then popcorn ceilings that make me viscerally angry. also the outside of the house will never not look dated as hell.

This last example is the closest comparison in terms of specs. Selling this month for $375,000, 1500sqft, built in early 70s, .4 acres. The interior looks like it saw some renovations and redos in the early 2000s and a the new buyer needs to paint throughout the house and the kitchen is due for a renovation soon. It's honestly a house I could see us having gone with, except it's about 15 minutes further southeast from the DC area than our place. This accounts for the much lower selling price, living that far out would remove us from a lot of our friends and activities. We would be hard pressed to claim we lived in the DC area at that point.

The other major factor right now is that by buying in January we locked in a low interest rate in the 3% range. That rate has at least doubled since then, so any of these houses is facing worse mortgage situations that we have. We also have the odd carport room that, with some insulation and new flooring, will add another 400sqft to our house and there's the 250sqft workshop in the backyard wired for electricity. I guess I'm saying that we chose well, but also we got lucky this time: we bought before the housing market became horrendous, and I took out my money and invested it in the house before the financial market tanked. Of course, the fact that Brie had a mutual fund or that my parents could float some money to help me fix the roof on the Knoxville house to sell it speaks volumes as to the generational privilege we have in the journey. This isn't a bootstrap situation, there is no "start up company in the garage" narrative here, we're standing on the shoulders of giants and those giants are white, straight, and educated.

S.