Severe Austerity

Future home state
Future home state

We bought the land. The closing wasn’t a happy occasion as it turned out. My husband and I chose to stress out and argue rather than relish the first moments of finally owning a piece of property. Perhaps that’s why this all happened 6 weeks or so ago and I didn’t bother to document the occasion. Thankfully we’ve been together long enough to overcome I’d say pretty much anything at this point, so we now joyously celebrate land-ownership together and all that lies ahead.

We just spent a week in MI at the property overseeing planting of $8,000 of oats and hay soil erosion control work on the driveway and slope. It was fun being there and exploring local living – what will be our grocery store, how do prices compare to LA, can we buy Pop’s brand of dog food, etc.? We’re also incredibly blessed to have family next door so enjoyed free accommodation. Our combined acreage, with all the sticks and tree branches a young labrador can imagine, was like crack to our precious Poppy.

$8,000 of oats and hay... AKA erosion control
$8,000 of oats and hay… AKA erosion control

Now we’re home though and in full austerity mode. We bought the land in cash and expect the house will cost around $350K-$400K to build, including drilling well, installing septic system and asphalting the driveway. Apparently the driveway will be our single largest expense, and we’ll get two guarantees: 1) it will crack, and 2) no one will steal it. We want to have at least half the build cost in cash up front then we’ll have a construction loan for the rest to convert to a mortgage once we take residence (my beloved USAA does not offer construction loans, so hello local bank). With a build start date scheduled for summer 2018, we have just over 18-months to come up with $200,000 (we’re starting at $0 as we don’t want to touch current investments).

We don’t have an extravagant lifestyle and do have good incomes, but we definitely live comfortably and there is lots of fat to trim in order to reach our goal. It’s doable but means severe austerity is officially ON. Fortunately, I track every cent and have spreadsheets that are works of art, so it’s very easy to see savings potential in each category of spending. Groceries is top of the list.

I re-read an amazing, potentially life changing quote on a Frugalwoods post this week. Mrs. FW doesn’t budget, she simply wakes up everyday intending to not spend money. She is right on that if I have a $250 grocery/household budget, I will spend that $250 because I’ve given myself permission. If I decide not to spend money, chances are good that I’ll only spend when necessary and therefore spend much less. Those drop-ins to Ralphs on the way home from work for a few items that always end up being $30+ sure add up, but they are always OK as long as they’re within the $250. I’ve been researching and shopping grocery smarter this week, and by my reckoning, I’m about $100 ahead than if I’d not put in that little extra effort.

Remember, Remember the Fifth of NovemberTo end on a completely unrelated grumble, I’m English, it’s Bonfire Night, and California is too bloody hot and windy to have a fire. Instead, here is our fire in Michigan last week where the autumn chill was a more appropriate companion on a Fall evening. I cannot wait until I can call that place home. $200,000 and counting…


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.

An Exciting Weekend

Advice from a pillow!
Advice from a pillow!

Last weekend we took a trip to meet the owner of the land we are interested in purchasing in Northern Michigan. During the Think Better, Live Better session at WDS Portland, I’d written down a goal of buying land and building a house. In the words of Charlie Gilkey, now was the time for me to “Ship It” (AKA get it done).

It was an early start for a 6AM LA to Chicago flight then a connection to Grand
Rapids, MI. From there, we rented a car and drove a couple of hours north to reach our destination.

We immediately visited the land and it was the first time we were there together since Christmas 2014. At that time everything was beneath a couple of feet of snow, so this was the first proper look my husband had had beyond photos. Fortunately, he reacted exactly as I had. He loved it, and we again experienced the rarity magic of being totally aligned in our decision.

Soil erosion and drainage to address
Soil erosion and drainage to address

In anticipation of our visit, the owner had clearly done some additional clearing and prepping the land for viewing. The foliage on the large berm was cut, the driveway path had been redone, and we noticed a couple of spots that had been touched to either mask or address drainage. That was a little cause for concern, as there had been some rainfall in the area, and we could clearly see a couple of spots of erosion. Although we loved the land, we kept reminding ourselves to look with our heads over our hearts. As my husband pointed out, we don’t want to build a house and have it slide down the hill at the first sign of wet weather!

After a thorough pacing and much discussion of where to put the actual house, I drove my husband to the place that started this whole thing: the 3 bedroom ranch house on 2.5 acres that I viewed back in June. The price dropped $23K over the summer, and the house is currently pending sale. It is a lovely property but neither one of us particularly liked the surroundings.

A treat to wake up to
A treat to wake up to

Thankfully, there was no feeling of having missed out, so we didn’t look back as we went on to my sister-in-law’s house. She had kindly allowed us to stay, and her beautiful property overlooking the lake was a further tease of this possible future.

We went into town that night and enjoyed a steak followed by too much locally produced ice cream. A very different scene from LA, but one that fit better.

We awoke to a beautiful sunrise over the bay then a sharp rain shower, which was a heavenly break from hot and drought-stricken Southern California. When the sun returned, I wandered around my sister-in-law’s property, hearing the wind rustle the surrounding trees and watching the sun sparkling on the lush wet leaves. It reminded me of Northern England, and I felt a little pang of home in a place I’d only visited a couple of times.

I want one!
I want one!

We met the owner at 10AM, and he was in full-on sales mode. He had borrowed a golf cart to take us around the property and show us the estate, and it was far from the tiny electric carts that you find on a studio lot in Hollywood. This was a 4×4 diesel Kubota RTV – a serious piece of equipment! We I strapped in, and we were immediately off road, up a steep hill, narrowly fitting between trees. I suddenly appreciated the scale of the land we were looking at. Only 2 acres, but considering our LA rental sits on a 6,500sqft lot, to our eyes it might as well have been 20 acres. The owner was also a would-be handyman and builder, so he gave us a fresh set of eyes on the possibilities of what we could build to maximize the plot and the view. Our tour concluded with a couple of secluded beaches along the lake and we could just imagine bringing our labrador (plus a couple more!) to play in the clear water.

Our heads were spinning with excitement, information overload, and “and are we really going to do this?!?!”. We left it saying we’d work on an offer and respond by the end of the week. What a week it’s been!