Whirlwind Week

Sun sets over Lake Michigan
The sun sets over Lake Michigan

Whirlwind is the only way to describe this last week. Our offer on the land was accepted last Saturday, and barring any problems, we should close by the end of September. We’ll then be the proud owners of 2 acres of land 2,300 miles from home! Some moments I think we must be mad and it’s easy to get lost in worries for the future. How on earth are we going to save to build the house? What sort of home do we build? How do we leave California? What the hell am I going to do for a job? How do we fly the dog there for a visit at Christmas? How the mind spirals if I let it! To counter those thoughts, I imagine the view of the lake through the lush green trees, and the heavenly idea of one day waking up to that in my own bedroom, in my own house, that my husband and I built. The rest will work itself out.

Having never purchased any sort of real estate before, it’s also been an interesting week of learning. I had no idea what made up closing costs. What was title insurance? Who knew it was important for rural land to “perc”? I certainly didn’t think I’d ever be paying money to a soil erosion expert.

The title search has been cleared, so the person we are buying the land from is indeed the owner and there are no unpaid taxes, liens or other issues with the property. The title company is ready to issue a title insurance policy, meaning in the unlikely event of future problems, at least our initial investment is insured. Title insurance is one of the closing costs typically covered by the seller, but although we wouldn’t negotiate our offer, we did agree to pay the seller’s closing costs (with a cap of course) in addition to our own.

A perc test (AKA perk test or even a percolation test) evaluates the rate at which water drains through the soil. This is crucial information when thinking about installing a septic system. If the land didn’t perc, we wouldn’t be able to build a house. Fortunately, our land (well – soon to be ours) percs very nicely. This is thanks to soil that is loamy sand from 6″ to 7′ below the 0″-6″ of topsoil. Water drains beautifully through sand. Again, not something I’d ever paid attention to!

Speaking of soil, the next big event is our soil evaluation next week. The county expert visits the land for an erosion assessment, then our builder will provide us a cost estimate of what we’ll need to do to manage drainage over the couple of years before we’re ready to build. We suspect this will be nothing more than crushed concrete on the driveway to prevent washout, and perhaps a silt fence as an erosion control on the large berm. But, our offer on the land is contingent on a positive inspection as well as the builder giving a final OK that the land is in good shape to eventually build.

Pelicans over the Pacific
Pelicans over the Pacific

An exciting whirlwind of activity, and we’re grateful to our team of experts in the local area who are handling so much of the legwork on our behalf. We’re also grateful to receive beautiful pictures of sunsets on the bay, which are equally as majestic as those we currently enjoy over the Pacific.

Explorations

A few weeks ago we saw a lovely little house on a few acres of land on Zillow advertised at $212,000. The house was located in Michigan – over 2,300 miles away from our current home in LA. We loved the look of it, and last week I spent a day touring several homes in a beautiful town beside Lake Michigan.

I met a realtor who set up showings of five properties ranging from $175,000-$250,000 along a 20-mile stretch of the Great Lake.

A road and a Great Lake
A road and a Great Lake

That was the first time I’d ever done viewings with a realtor and I learned a lot. I kept being told it was a sellers market, but given the inventory and prices available, I didn’t really believe it. What I did believe is that we are spot on in our plans.

We are slowly planning our exit from Los Angeles over the coming years. We love LA and the climate and and and… But, it’s just too damned expensive. Three to five years is our timeframe. Neither of us want to have to sustain our current levels of income, and we desperately want a more peaceful and simpler way of life. This is not necessarily early retirement. It is about buying a property or a piece of land close to a large body of fresh water that we can pay off in a few years then live on a greatly reduced income (if we so chose).

Back to my trip… I viewed four houses and immediately began to realize what I was and was not looking for in a home. I also learned of the unique considerations for a property in that part of the world. The property that sparked all this was the last viewing of the day,

although I confess I made several drive-bys at different times of day to check on the light and location depending on the sun’s position. I liked what I saw, but was not without a few reservations. Perhaps the property was too tucked away? How would I feel alone there at night if my husband was away? Would it be too dark and dank in the winter?

Buy land. They're not making it anymore. - Mark Twain
Buy land. They’re not making it anymore.
– Mark Twain

Just about an hour before the viewing I got a call from my husband telling me to escape the realtor for a half hour and find time to go check out a piece of land that was for sale for $90,000. I managed to do so and quickly drove the beautiful lakeside road to the land. I was irritated if I am completely honest. I liked the house plan and was annoyed at the distraction.

That irritation quickly evaporated as I navigated my rented Jeep up the hillside “drive” (dirt road) to a cleared berm amongst a light forest of tall trees with nothing except greenery and a wooden swing in the corner. A couple of acres and plenty of room for a simple house. I got out of the car and walked the clearing, disappointed to find there wasn’t a view of the bay. A few steps further, and there was my beloved view. I remembered a previous visit to that same land. on the wooden bench in the corner (the only structure currently on the land) looking out onto Lake Michigan. It was December, very cold, with a good amount of snow on the ground. I remembered the peace that I felt then, and the peace that came over me again in that magnificent location. It felt like home, even without a house, a septic system, or a even a drilled well!

An interesting option
An interesting option

Time to meet the realtor again, and I drove the five minutes to see our original house. It was lovely. Without seeing the land, I would have made an offer right there. I felt it was overpriced, but I saw the potential and enjoyed the spirit of the place. The land that that house sat on was equally quiet and peaceful, but it was on flat land at the bottom of the hill.  This house was closer to the lake, but there was no view except for a thick fringe of trees.

I left feeling confused. Upon returning to LA and sharing detailed photos and descriptions of both house and land with my husband, we decided to take a trip together in the summer. There was no sense jumping in.

 

We called the realtor and the owner of the land, deciding our offers would be $180,000 for the house and $75,000 for the land. But, we wouldn’t act on anything until the summer, IF we acted on anything at all.

PeaceThe owner of the house just dropped the price to below $190,000, and the discussion is on again. The house would be a steal but I can’t ignore my gut feeling about the land.

What is it like to buy land and build a house? Is it going to cost twice as much? Is it better than buying a property that we’re not ready to occupy that’s 2,300 miles from LA?

 

Part One: Los Angeles, CA

Our City of Angel$

Last Friday I stopped by my husband’s office between meetings. I found him engrossed in Trulia. He was checking out properties for sale in Portage, WI and marveling at the prices. Single family homes on large lots for $200,000 and less!

In our Los Angeles neighborhood single family homes sitting on postage stamp-sized lots that haven’t been upgraded or decorated since 1953 sell for $750,000+. Realtors in the area say you need to have the full amount ready to put down in cash to even get into a buying discussion. We don’t even live on the phenomenally expensive Westside any more. We moved out into the Valley suburbs to a more affordable and value-based proposition closer to our work. Still, housing is out of control. This is why we rent at $3,200* a month for a 1,400 sqft 2-bedroom home in a safe middle class neighborhood with a swimming pool. The house and this area provided the best value for money of every place we looked at, and the fact it happened to have a pool was a lucky and luxurious bonus rather than a requirement. *Note: although that sounds like a tremendous amount of money, in Los Angeles, it’s a steal. Older homes in critical need of modernization without swimming pools rent for upwards of $5,500 a month in our old Westside neighborhood. You’re lucky to find a decent apartment that rents below $2,500 in many neighborhoods.

Now we don’t not own a home in LA because we can’t “afford” one. We could easily double our monthly housing payment and carry a mortgage on a million dollar home. Why on earth would we do that though?! Put down a huge chunk of our savings and be slaves to a gigantic loan, all for the privilege of “owning” a small fixer-upper? In West LA, tear-downs sell for $1,000,000+. Homes that are beautiful for $250,000 in other cities have $800,000 tags on them here. We just don’t see the value in what your money can buy in LA, and although we like the climate, we’re still not willing to pay that high premium.

Another option-to-own would be moving way out of the city, but doubling and tripling our commute time and cost. Have you seen the traffic LA has to offer these days? All those folks moving here from New York and San Francisco to save money (LMAO!!) like LA isn’t crowded enough? No thank you! I value my life and sanity too much to spend 3-hours in my car every day.

Yet another option would be buying property in the so-called “transition neighborhoods.” A coworker of mine did that recently. She has a small but lovely little home with a pool. She was recently the victim of a home invasion, and doesn’t feel safe taking her dogs out at night. She owns that $600,000 home though!

OK… LA has some pretty nice sunsets (pictured with some multi-million dollar homes!)

Now I know I am ranting about the cost of living in Los Angeles. I should probably answer the question: why on earth do we live here then?! Well, the weather is nice but work is the primary answer. We both have very well paying jobs in the entertainment industry, the center of which is the studio system here in LA. After graduating from college in the late ’80’s, my husband hitchhiked to LA to get into the movie business. My first job was at a media company in the UK (which is where we met), so when I made the move to LA and got my green card (which wasn’t even green) the natural place to look for work was at a studio.

Our current standard of living is as cost-optimized as we are willing to make it. We loved living 10-minutes from the ocean and in a summer climate 20 degrees cooler in West LA vs. the Valley, but prices skyrocketed and when we had to move out of the house we’d rented for 10-years, we weren’t willing to pay more for that privilege. Aside from the change in location, there are plenty more things we could forego to bring our costs down further. Much more would impinge on our desired quality of life though. We are in our late 30’s (me) and early 50’s (my husband), and we do want to live in house with a yard for our dog and an extra bedroom for family and friends to visit, rather than a small apartment or condo with no outdoor space. Our jobs do require travel, and I need to feel safe in a low crime area when I walk my dog or if I have to sleep alone at night.

Wrapping it up with that original point way up there in the first paragraph though… Homes with land for a few hundred thousand in other states. I spend plenty an evening in my comfy chair looking at said homes and longing for a different life. Seeing my husband in that same state last Friday was a miraculous meeting of the minds and the beginning of a path to a change.