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Buying the "doctor house" was the biggest mistake of my life...

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  • #16
    Like I already said the house was a mistake for numerous reasons. Unfortunately, I’m working on an exit strategy not a time machine...

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    • #17
      If I were you I would work on both functional and cosmetic changes that don't break the bank and then decide to revisit the topic in 6 months. Unlikely your feelings will change on the house but you want to be more careful in the future. Forcing yourself to take time to think things through might help with that. It sounds like you're in a super competitive market. That time will allow you to make enough changes maybe you can sell it a little higher than you bought it for.

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      • #18
        If you are dead-set on an exit strategy, I would probably meet with a realtor and see what needs to be fixed and what can be sold as is. If you do really live in a hot market, maybe you can sell it as is with all the necessary disclosures on all the things that you have found that are broken. I've never lived in such a market, my experiences in selling homes is that the buyer makes an offer, hires a home inspection, and either makes you fix all the things they found wrong in the home inspection/disclosed on the home disclosure form, reduces their offer by the amount that it would cost to fix it, or walks away. In general, renovations done on homes do not make money- I don't remember the exact news article or know how they went about calculating it but I think that most renovations end up being money losers. I vaguely recall the roof and a new garage door being the two renovations that had the best return on them, but even then, the return on the investment did not reach 100% of the initial investment. I suppose that an exception would be if you really did live in a run down home in a nice neighborhood and could "flip" the home by making some serious changes to the place. My experiences with contractors has always been poor though and it sounds like its probably not worth the time or the hassle in your neighborhood. If you do live a hot market, it maybe worthwhile to explore one of those online home sellers like redfin if they are in your area. Saving on the real estate commission would save a lot of the transactional costs for you. If it makes you feel any better, I probably lost about 100K on first home that I that I purchased to in almost the exact opposite circumstances- my wife wanted a brand new home, we built one customized just the way that she wanted it, and then determined that I did not have a long term job and had to move in 3 years. That's the problems with homes, just like jobs, people always assume that they are going to stay in them forever and make poor decisions because of it.

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        • #19
          It sounds like you're dead set on moving and that may well be your best option. The transaction costs would be a cheap price to pay for marriage harmony. Hopefully this experience can serve as a guide when people get upset when they don't get the answers they're looking for when they post a thread about buying a house.

          It always bears repeating: rent is the maximum you'll spend on housing, a mortgage is the minimum you'll spend.

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          • #20
            Anyone have experience with Redfin?

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            • #21
              Originally posted by NWMD View Post
              Anyone have experience with Redfin?
              As a buyer, I like Redfin. Anecdotally, realtors may blacklist Redfin listings. That's a total breach of the duty of agency, but how likely is the client to know?

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              • #22
                Probably 10% friction cost on selling and moving. Maybe 10% on the house. A quick turn around is a red flag to buyers. Dec-Apr is much lower demand for the buyers that schools are a factor. If your rehab estimates were the additional 10%, you might already have the fixing the headaches underway. Not sure you will be successful in passing that to the next owner. Doesn’t seem like you are happy with the deal, what makes you think someone else will? You set the FMV, the other houses don’t seem to have the problems. What makes you think the next buyer will bail you out? Not talking trash, how much of a discount would it have taken? Doesn’t sound like break even on what you paid.
                100% or 90% sounds like only the next buyer will settle that. Not advocating being miserable, a quick move will cost you more, a slower fixup of the house will cost less and cure the illness.
                Money is the drug that masks the pain, rehab is eliminates the cause.
                Fixing up a house is a PITA. It’s not hopeless by any means. The sun will shine again, just hoping for no discount seems optimistic. Delaying maintenance won’t help. Few rehabs return 100%. You got some hard choices. Flowers every week might be needed until you get the rehab done. Might provide the wife with comic relief. “Same ************************ cheap flowers? Geez.”

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                • #23
                  Sounds like OP had already made up their mind to sell prior to posting. I guess the overall points are warning others to avoid a large purchase when under stress and not to delude yourself that an old house that has not been renovated won't be fraught with problems?

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                  • #24
                    What you should not do is buy another house before you sell the current money pit. My brother was having some marital problems and bought a new house in a new neighborhood prior to selling his old house. He had trouble selling the old house. He nearly declared bankruptcy and got divorced anyway. If you do sell wait before buying something else.

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                    • #25
                      It sounds like you've made up your mind to move and if that's what'll make you happiest its a smart move. On the other hand, you are in a great school district with the worst house in the neighborhood. That screams potential at me. In your shoes I would draft a plan to attack the home improvements and get a contractor in as soon as they are available. If living in the house is unbearable in the interim and during construction, find an apartment or townhome to live in for 6-12months until the work is completed. Paying for improvements, rent, and a mortgage won't be fun but it will still probably be cheaper than taking a hit on the home sale and paying realtor fees...
                      Last edited by DerekLava; 11-22-2019, 09:38 AM.

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                      • #26
                        Originally posted by NWMD View Post
                        I am hoping to sell this summer but feel overwhelmed by the process. Are there any tax implications if you sell less than one year after buying? I know I will probably lose some money overall on the house but I'm ok with that.

                        I would love to buy a smaller place that's move in ready and updated.
                        "Ultimately, I think we need have appropriate expectations before we buy." so much for that. its crazy. its like you completely ignored the 8 pages from your first post about how bad a fixer upper could be for your life and how much you were underestimating the cost and time.

                        sell, lose money.
                        stay and see if your bet pays off: "The mortgage will certainly violate WCI's 2x income rule, but it seems like the returns on investment might make this rule worth breaking.".....

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                        • NWMD
                          NWMD commented
                          Editing a comment
                          I’ve been like Spock most of my life. Never made emotional decisions. Always made logical choices. I literally lost my mind in June when we bought this house. It was like I was a completely different person for a one month period. I like to blame the grief but that’s just an excuse. I made the choice and now I have to deal with the aftermath. There are no mulligans in real estate.

                      • #27
                        I loved our Redfin agent, but this was on the buyer's side. He told us flat-out it would cost $100K and at least a year to do a basic kitchen remodel, so we steered clear of the fixer-uppers. I don't know about the black-listing anecdotes, but I LOVE Redfin. I love their business model, their responsiveness, their transparency...if you ever do buy another house, I would highly recommend them.

                        I posted a while ago about our situation, which is similar to yours in some ways (new baby, except I'm the wife and the doctor), and I do think our house search was very deeply steeped in emotion. We ended up not buying after a long search. I get the feeling from your post that you just want out of a bad situation, in which case, the money is moot. Yes, you'll lose money, but you have to consider the costs of being miserable.

                        I say just go ahead and sell. Your house had multiple offers and you're in a good school district - someone will buy it at or close to what you paid for it.

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                        • #28
                          You mentioned it was "the doctor house". Lesson learned by all of us at some point (for me it was my mid 30's). Millenials and Gen Z's take heed.

                          Everything marketed to us above and beyond what we actually need is a fake dream that can very easily turn into a nightmare. "Stuff" break down, diminishes our financial security, becomes outdated, waste our time and money requiring maintenance, complicates our lives, stress our marriages, teach our kids the wrong lessons, can adversely affect our emotional and physical health, does not provide as much excitement and pleasure as we thought it would, can depreciate or be damaged (hurricanes, earthquakes, flooding, inconsiderate teenage guests), takes us from what our families really need (our time and everyone's happiness), can create envy by others, may force us into second jobs or delay a desired retirement, triggers sales taxes/fees with just about every transaction, attract unfair handyman and mechanic quotes, and on and on.

                          Doctors have a bullseye on us. "Physician loans", "Physician advisors", exotic "CME vacations". Where are all the "LPN" loans, advisors and vacation packages? Next time, just walk past the men in the nice suits, and ignore the homes purchased by your colleagues talking to the men in the nice suits. This is part of what it means to not follow the herd. They are herded people! Exit the herd, think for yourselves and escape the mind control of cookie cutter online advice designed to steer you in the direction desired by the big institutions putting out this advice. I don't see any fiduciary disclosures attached to those articles, so how can we know whose interests they really represent?

                          Spend but spend wisely, ignoring the marketing pressures relentlessly pushed by America's billionaires and government. They want you to keep parting with every hard earned dollar to line their pockets. Generally, happiness is not in what you spend on, but appears to be in the difference between what you earn and what you spend, and augmented by investment returns. Physicians have plenty to spend on experiences while also growing their financial security over the decades if they maintain and grow that gap. I haven't gone without, but still increase my financial security year over year with a combination of grit, self-restraint, contemplation, research, patience and other traits one can read about and develop intrinsic to the thought process of successful people. That knowledge is power - cliché but necessarily true.

                          You can get through this and know you can thrive going forward with the right moves.
                          Communicate with your spouse as to how you both will change old habits to accomplish this. She probably needs to know that this experience has permanently changed your views regarding spending and security, so she can trust that future moves will be more sensible and calculated. Wish you well.
                          Last edited by EntrepreneurMD; 11-22-2019, 06:23 PM.

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                          • SimpleLife
                            SimpleLife commented
                            Editing a comment
                            Dead on. Learn what kind of life you want and let this decision shape it. You have a more expensive home than Warren Buffet (estimated at $652,619). I’d guess you may have a more expensive car as well. This is fine but know what the unintended costs are. Compete with the culture if you like but only after you and your wife read Millionaire Next Door. Decide if you want to play a game you cannot win. Find contentment and you will be wealthy soon thereafter!

                        • #29
                          Well obviously the only person's opinion that matters is yours and your wife's. Your situation doesn't actually sound dire to me though. Will your home warranty or home insurance cover any of these repairs? Are you willing to do some landscaping? If this is the neighborhood you want to be in long term, makes sense to say. I have worked with a lot of moms postpartum and just like I tell folks on the inpatient psych unit not to make any big decisions while in crisis, I tell moms not to make any big decisions until they aren't sleep deprived. Are you guys at all willing to take 6 months and see where you are at that point? I do come from a place of understanding. We bought a 1930s fixer 18 months ago and have put 120k into it thus far, with plans for a 250k reno in the next few years. But I love it, which makes a big difference.

                          Good luck whatever you decide, would love to hear a future update. I'm certain you will be just fine financially whichever route you go.

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                          • NWMD
                            NWMD commented
                            Editing a comment
                            Do you ever worry about how much you are spending or whether you will get that money back when you sell? I can help but constantly think about how things won’t add value and how is rather just buy more index funds then sink money into a sinking ship.

                        • #30
                          Ugh, that's a hard situation!

                          Here's something to consider. First off, in my opinion you should move but not in a race. I think making and having a plan wil help to settle you and your wife down.

                          I've owned a few homes and did a lot of the work either myself or was able to act as a general contractor and saves a ton of money doing so. From what I have learned from all of this is to just do a few cosmetic updates. Simple things like painting the front door or many easy and not big deal items to just dress it up a bit better.

                          It is a sucky situation for sure but the with some superficial ways of showing it better (I'm sure some real estate brokers might also have some ideas), I bet you can sell this and move on.

                          I know it sounds twee but life could get much worse!

                          Best of luck!

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