Background
I am going to build a house in 2022. A custom home. I wanted to document the experience because this is not only so foreign to us, but also something that not many people get the chance to do.
First of all: screw SEO. I’m going to provide as much detail and introspection on this process as I have the energy to provide; I don’t want to go on too much of a side rant here, but a major reason I don’t post on the site more often is that the process of conducting SEO, making every article look like Standard Modern Internet, is just so darn exhausting. And then the pages and writing end up looking and sounding like everyone and everything else. I miss the old web and I miss just sharing my own, unique voice without having to worry about tweaking everything to monetize it.
So screw the SEO. If you found this page, and decide to read these, despite everything, then I am amazed and impressed. Hopefully you stick around because I really do think this journey is going to be interesting.
Particularly because my husband and I are not rich. I really cannot emphasize this fact enough. We aren’t rich, and we aren’t near the end of our lives, but we’re building what we hope will be our forever home. I think there’s a perception that only wealthy, or older people, can build their own homes, and that’s not the case. You just have to plan for it.
And we’ve been planning. We have wanted to build a very particular house since 2015 or 2016-ish. While driving through the back roads one day in a town in Rhode Island, I spotted a home that I now know is called a prow home. I remember my jaw dropping and craning my neck around as I passed.
I searched for every possible combination of words online when I got home until I discovered what that home style was called…and, in the process, discovered Golden Eagle, a log home company that specializes in prow style homes. Both King Bacon (my husband, though just boyfriend at the time) and I fell head over heels for those prow homes. Nothing we had ever seen was quite like them. The glass and the views, and the feeling of being part of nature; we wanted that.
We married in early 2017 and decided we would try to build one with a VA loan (King Bacon is a veteran). We were both heavily indebted Millennials, and as people who both grew up in poorer families, we each had to claw our way up in life and were saddled with student loan debt and car debt on top of large rent payments. We didn’t have the down payment that would be needed, so a VA construction loan was our goal.
I’ll cut a long story short – the only land we could afford in Rhode Island, where we were living, fell through. RI is rife with wetlands, being so close to sea level, and most buildable land is enormously expensive. The only land we could afford turned out to have a water table of about 12 inches after completing a survey. Nothing else was within reach. We gave up our dream of building and decided it would have to wait until we were older and had saved up enough money. But, in the meantime, we made it our goal to drive relentlessly toward achieving that dream.
Brief Interlude
I deliberately do not put advertisements on this site because I know how annoying they are; nor do I include sharing tools for that reason. So I should probably attempt to include some kind of affiliate links in this article for the sake of helping keep the site paid running, so if you want to support us, here’s some random items. It’s free for you to click, you don’t even have to buy the items (though it’s cool if you do), and it helps our site, so if you’re inclined, please feel free to help us in this way.
- Everyone who visits us raves about how comfortable our guest bed is. That’s because it’s a gel memory foam mattress! Specifically, the Zinus Gel Memory Foam mattress (https://amzn.to/3RFQaCw). We swear by this mattress and family members have bought it since staying with us, too, because it basically eliminates back pain.
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- Want to read a Dummies’ how to guide on building a home? Here you go! “Building Your Custom Home for Dummies”: https://amzn.to/3aLiWB3
Thanks for your support! Back to it.
Why build?
I’m frequently asked by friends, family, and coworkers why we’re so dead set on building. The reason is that we have very specific tastes that we have only almost matched or found in one other house: our current home. King Bacon and I have house hunted like others and looked at so many homes that I lost count. And, as an obsessee/devotee of architecture, I still spend spare moments prowling through house listings online. I’m writing this in 2022 and I still have yet to see another home that even vaguely comes close to our desired layout. If you’re curious, that layout is:
- Not completely open concept;
- Primary suite on the first floor and on the opposite side of the home from other bedrooms;
- Large galley style kitchen with a walk-through to prevent bottlenecks, with the dining room parallel
- Sight-line from front door to view
- Pantry near the kitchen
- Room with a secret entrance
And really…that’s it. It doesn’t sound like it’s anything out of the ordinary, but it has been basically impossible to find. Most homes have a standard L or U-shaped kitchen; the bedrooms are all tucked away next to each other or the master bedroom is above/over the other bedrooms or on the second floor (which, I don’t care how much insulation you put it, you are still going to hear walking and other sounds above you with that set-up); the layouts just generally don’t fit what we like. And, like I said, our current home comes close, but its central section is more like a row home layout where the front door sight-line is drywall and then the order goes den > kitchen > eat-in dining at the back of the kitchen.
Our current home also doesn’t have the space we need, which sounds silly, given that it’s a 3 bedroom, 2 bathroom house, but we both work remotely and need dedicated office spaces. When we begin our family, we lose that last spare room, which is needed because we host a lot (well, when there’s not a pandemic, we do). And our garage is our primary storage, since we don’t really have a basement. There’s not enough room for 2 offices, kids, guest spaces, and storage.
Also, we are just in love with the home layout that we want. Nothing has changed that. We are 6 years on and still want that layout. Any home we buy that doesn’t have that layout is not going to be one where we can fully feel like it’s our final home. We will always want this house. And that is why we are deciding to build.
Planning: 2 Focus Points
As I said, we’re not rich people by any stretch of the imagination. But all of that background is just the set-up for this blog to explain our motivations. We knew that our end goal was this dream house; we knew that we aren’t rich people and don’t have family members that are well-off that could help us. That meant that we needed to plan out our goals and plan for them long-term.
House = investment opportunity
When we realized we couldn’t afford to build right away and would need to purchase an existing home first, we wanted to make sure that we treated any potential property as an investment opportunity.
Some people might think about “investment opportunity” as a house you could buy and flip, or a property that let you rent out part of it to recoup some income/help with the mortgage, and we definitely considered that. The houses in our budget would have needed major work that DIY wouldn’t have been achievable unless we were already contractors. And since we didn’t have a down payment, and VA loans are really for single family homes at this point in time, we weren’t able to hit the 20% down payment minimum for a multi-family property like a duplex in Rhode Island.
Given our situation, I decided to focus on homes that I felt would gain the most value over time – so that any money we put toward the mortgage served us almost like a stock investment, hopefully accruing value above market average. We wanted our money overall to go towards our own asset that we could use later, not a landlord’s.
I’ll condense things again here: in order to do this, we deliberately skipped the “starter home” and purchased a house that we felt hit all of our criteria for gaining value as an asset over time. The bonus to the home was that it was the closest we had found to our dream house, as already mentioned, and so if we had to stay in it long term, we would still be happy there. My criteria for a home that would gain value was:
- In one of the “best” towns in the state
- In one of the best school districts in the state
- Generally appealing characteristics: over 2000 square feet, 3 bedrooms and 2 bathrooms minimum, to appeal to the broadest audience of potential future buyers
- 2 car garage, unlike most middle-class homes in the state
- Large primary bedroom suite with its own bathroom to increase appeal to buyers
- Proximity to water (our home ended up being 0.4 miles from the ocean, with a neighborhood exclusive beach and tennis courts…that we can’t use because there’s a huge fee lol but IT ADDS VALUE, gosh darn it)
- Neighbors that increase value of the home (we bought the “cheapest” home in a neighborhood of literal millionaires – don’t get me wrong, our house is quite nice, but it was a sub-$400K home in a neighborhood of multi-million dollar properties at the time we became the owners.)
This strategy has paid off. Since buying our home in 2017, even before the pandemic real estate bubble started to explode, the value had almost doubled from our purchase price thanks to new houses build near us. We have two homes in proximity to us; both of them were purchased by new owners (separately) and each had builders that tore down the old, decrepit and literally condemned homes that were there and built mini-mansions, which skyrocketed our home’s value. The pandemic bubble has only increased that number, so our investment – on paper – has definitely worked so far.
I’m not going to lie – for people that did not have any down payment, buying a house that was not at a starter-home price and then making the mortgage payments was incredibly difficult. The mortgage was about 60% of our take-home income for a long time until I received a promotion at my former job, at which point it became 45-50% of our take-home income. We had to be incredibly tight with our money.
But, again, we treated this specific home as an asset – whether we kept it long term or sold it, we hoped the home would gain value and we could tape into the growing equity in the future. That means that the extra money we would have normally been putting into the market or into our savings was going into our mortgage, which – again – we hoped would pay off.
👉 I want to note something very important here: all situations are unique. Most (if not all) financial advice does not advocate this approach to long-term finances. It was also a gamble – or, at least in my case, an educated gamble given our specific home and the timing. It was always a possibility that investing in a higher-cost home like we did would not have paid off and could have hurt us instead. We took this approach because of our specific circumstances and because I was fairly educated and highly hands-on when it came to financial planning for us. Don’t read this account as formal advice or as some kind of how-to guide. I’m just sharing our situation.
Lived our lives with the end goal in mind
The second thing we did to plan for this dream home (other than invest in a property that we thought could get us the biggest return for our money compared to the stock market or savings account rates) was make that our financial focus. We needed to free up our income stream from debts so that money could instead be used as a down payment, whether that was through paying our current mortgage or socking it away.
We started by organizing our debts using this debt reduction calculator (https://www.vertex42.com/Calculators/debt-reduction-calculator.html) and attacked them, beginning with the highest interest first: King Bacon’s car, purchased before we married, and then continuing through our student loan debts.
We made some sacrifices in order to pay down our debts. Our “vacations” were visiting family members within driving distance or with airline points; we did most of our cooking at home; we kept our date nights modest; we even sold one of our vehicles. All of these things took adjustment at first, but with the sale of the second vehicle (mine – which was possible because we were able to commute to work together), we were able to destroy King Bacon’s car debt and then snowball that payment into the remaining student loan debts.
The home we bought is older (built in 1952) and required a lot of maintenance and infrastructure repair, so that tied up a lot of our spare change and prevented us from eliminating the extra debt faster. Even with these setbacks, we were finally debt free as of early 2020. It took us 3 years of buckling down and making sacrifices, but we did it. After that, we funneled what extra we had into savings. With the pandemic choosing right then to slam into us, it’s not like we had any temptation to go anywhere or do anything else with that money even if we had wanted to.
Even reaching that milestone, we didn’t think that we would be able to afford that dream house until much later in life – though obviously we hoped we would. We had decided that if our current home reached a certain price threshold above our original purchase point that we would sell no matter what and make our dream happen.
Our jobs shifted into remote work full time, which was incredible – while remote work isn’t for everyone, King Bacon and I are both people that thrive in that environment, as it turns out – and we realized we could live and work anywhere. We had that realization right when our house exceeded a double value for what we’d paid for it and suddenly…that gamble we took paid off. We had equity that we could tap into. To our deep shock, we realized that we could actually make our dream home happen before retirement.
Final thoughts
There’s the background of what we’re doing. It’s possible to build a home before retirement, even if you’re not rich, if you carefully plan and prioritize. Again – we are not rich people. But we sacrificed and planned carefully where our money would go for years to make this happen – it just happened much sooner than we thought.
We have had friends and family tell us, “I’m so jealous! How can you do that? Are you making way more money than we realized?” These same people – friends and family members – are also:
- Eating take out food daily for breakfast, lunch, and dinner – wish I was exaggerating, but I’m not;
- Constantly buying new, very expensive clothing items or accessories/home items that they don’t need;
- Taking pricey weekend trips every two weeks;
- Constantly upgrading their technology or vehicles. I know people that buy new cars yearly and others that buy a new computer yearly; I have friends that are always “upgrading” their phones and tablets when the new models come out;
- Refusing to budget because “money scares them.”
Most of these people also make way more money than us. We started this process making less than $100K combined per year. We have family and friends who make $200K+ combined – and have for years – telling us that they could never afford to do what we do. If you happen to know me and you are somehow reading this blog and realize I’m talking about you: I say this with peace and love, but you should know that it is stupid in that position to say that you can’t afford to do something like this based on your income and your spending habits.
Don’t get me wrong: spending money where you want to spend money is fine…if it’s a conscious choice. When you claim that you “can’t afford something” while you’re not planning or managing your money, and you have no financial focus, that’s preposterous.
I don’t like Dave Ramsey, but he says something that I do agree with: You have to live like no one else in order to live like no one else.
Set goals. Prioritize your spending.
Next I’ll write about the process and finding land!