My First House

My First House

After graduating college in 2012 and finding my first job, I kept living in my mom and stepdad’s house for about half a year.  I took advantage of the opportunity to save as much money as I could.  I first paid off my remaining debt, including the rest of school costs and a small wardrobe for my new professional career.  Then I focused on setting up my 401k and building a mini nest egg just to get it moving.  After, the house fund was started.  I bought my first house at age 22 in June 2013.

I am extremely grateful for the opportunity I had to stay with my mom and stepdad and build a strong financial foundation.  I strongly recommend staying with parents or family if you can (even for “reduced rent”).  The benefits were not just financial.  As a college graduate and (young) professional adult, my relationship with my parents changed, and we actually developed a much closer relationship before I moved out.  This has led to a better relationship now, 5 years later.

BUYING A HOME IS NEVER AN AREA WHERE RECKLESSNESS IS ALLOWED.  You must go in entirely as a businessperson.  Always carefully contemplate whether to rent or buy.  Your home takes up far too much money and time and is far too big a commitment to not be made with careful consideration.

Before any house shopping starts, it’s important to be realistic about wants vs needs and get your list together.  As you shop, you may add more to your list.  Just be honest about the category it belongs in, and whether or not it is something you could add in later at a cheaper cost.

The Deal Breakers

  • Within one mile of my work – I wanted to be as close as possible so that I could spend as little time commuting as possible. My parents’ house was an hour from work, and the drive had taken its toll.  I wanted to go home for lunch, and enjoy all my extra free time.
  • South of my work – I wanted to be able to stop at home on the way in to change/shower if I spent the night at my parents’ house, most of my friends were south so it was more convenient for meeting up with them, and school was also south. It’s important to be strategic in location, because it’s the only thing about a house that you can’t change.
  • Safe area with a low crime rate
  • Quiet area – removed enough from the main roads that I wasn’t listening to cars/construction.
  • Completely within my cash budget – I did not want to take out a loan. Michigan’s real estate market was fickle with the recession, and houses were incredibly cheap.

The Necessities (Must have or be cost effective to add/replace)

  • Two bedrooms and two bathrooms
  • Garage – Brushing snow off the car is just not fun, and I wanted safe space for my tools and my bike and any projects I wanted to tackle.
  • Good layout with open concept
  • Good roof, good siding, good windows
  • Good furnace and hot water tank

The Negotiable

  • Fixer upper that I can rip apart and make new with specific design ideas, including wood floors, dark cabinets, clean lines, granite and stainless steel. I didn’t want to pay for updates I was going to rip out.
  • Outdoor patio area

The Nice-to-Haves (Probably wouldn’t pay to add)

  • Cement driveway
  • Yard with mature trees
  • Air conditioning

My realtor had my list, and knew exactly which houses to take me to see.  Our options were limited, but I had a strong cash offer, and I was able to find a house that met all my needs.  I got high deductible insurance in case of a disaster.  I had a cashier’s check with on the day of my closing.

Changes/improvements made over two and a half years and all paid for in cash with most of the labor done myself:

  • The previous owner was a smoker so the first thing I did was repaint every single wall and ceiling with two coats of Kilz2 Latex (before replacing the flooring, which I was ripping out anyway)
  • Ripped out carpets in the main hallway and three bedrooms, refinished the original wood floors, repainted walls and ceiling and trim in each (including inside the closets)
  • Main bath – Repainted, replaced the toilet and sink, put new tile on the floor, put new tile on the walls above the bathtub, new shower fixtures, new light fixture
  • Laundry room – put in stackable washer and dryer, repainted the whole room white, put down tiles, replaced the utility sink
  • Second bath – had master electrician move the electrical panel from a closet to the front hallway, then hired a contractor to rip out the closet and build a new wall and install a walk in shower stall where the closet was, replaced the toilet and the sink, repainted the walls, retiled the floors, put in new baseboards
  • Main room – hired a contractor to knock out a wall between the kitchen and living room and knock out a door and window and replace it with a three panel door wall, ripped out the carpet and installed new wood floors, installed new light fixtures and a ceiling fan, repainted the entire room
  • Kitchen – ripped out all the cabinets and fixtures and sold the old appliances, hired a contractor to rip out the soffits, repainted the walls, installed wood floors, installed new cabinets and an island, had granite installed, had a new sink and faucet installed, hired an electrician to install extra outlets and pendant lights above the island, put up a white subway tile backsplash, bought new stainless steel appliances
  • Other interior – put 10” thick insulation throughout the entire attic, had brand new duct work installed, installed a new thermostat that had a timer and automatically adjusted
  • Detached Garage – put in a new garage door opener/track, repainted the entire interior and exterior
  • Exterior – had new roof installed, built a fire pit in the back yard, had rock for the driveway laid down, cut down a bunch of trees and tore out weeds, planted four new trees in the front yard, hired someone to cut down a huge dead tree in the front yard, planted new bushes and laid mulch along the front of the house, installed a privacy fence along the side, raked the land and threw down grass seed and let it grow from the rain

I still slept at my parents’ house for the first month while I was renovating.  I did all my projects with cash over the two and a half years, actually putting tile on the walls of the main bath on the day that the house went on the market in December 2015 before my move down to Florida.  I sold the house for three times what I paid for it, but ultimately with the cost of the renovations, I was down net a thousand dollars and all the time I spent working on the house.  Not bad for two and a half years of living there, especially since I enjoyed doing the projects and learning about renovations.  I definitely could have done better, but these lessons only come from experience.  There are still some things I won’t touch (looking at you, heavy electrical). I’ve grown far more confident in my abilities and overall the finished product was far more fulfilling. However, it was very time consuming and expensive.  Definitely not profitable for my first time, although thankfully not a major loss.

I definitely recommend doing the work yourself to renovate, but I wouldn’t recommend taking on such extensive renovations for a first-time buyer.  I don’t regret it, but it was not easy and I made many sacrifices, including most of my free cash going into the house.  For a first time buyer, I would definitely recommend buying a house that is completely livable and then doing one room at a time as needed and as you save the cash up.  Absolutely do any renovations with cash.  Weigh the cost and the benefits for each specific renovation that would be wanted or needed before buying the house.  Going through this process definitely helped me know exactly what I wanted when I purchased my second house.

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