Refresh. Refresh. Refresh.
We had been watching the real estate market for months, looking for the right place for a home base as we set ourselves up to travel for months at a time over the next several years.
A few places were snatched up before we could even see them. We were in Costa Rica, Honduras, and Minnesota while looking for a home in Michigan.
We found one! It wasn’t perfect, but it was on a desirable lake, and when we found out we could get the property across the street with a garage and little bunkhouse included, we were sold. Just under $300,000 and we were prepared to pay cash.
Then we got the inspection. Gaping cracks in the foundation. Water in the crawlspace. Maybe some mold. Major issues with the electric. Recommend repairing, maintaining, and monitoring again and again and again.
I’ve seen The Money Pit and we didn’t need one for ourselves. Hard pass.
Refresh. Refresh. Refresh.
What’s that? A mid-century modern home from 1964 that looks like this?
For under $100,000?!?
No, it was not on the lake, but in a family-friendly neighborhood on the outskirts of town. After several months of disappointment and no lakefront places worth mentioning available, we had broadened our search.
We didn’t need the perfect place, but we did need a place or at least a plan, as pretty much all of our stuff was in a pole barn and garage taking up space that would be occupied by two boats and a truck come fall (Thanks, Dad!).
It’s not true that all of our stuff has been in storage. We do have a little lakefront cabin where we were spending the summer, as my family has for the majority of the time the last eight summers.
The cabin is a wonderful place to stay, but it’s not really a great place to live, especially if you want a garage, shed, or place to store anything. It’s also a bit further from family, which is why we’re interested in relocating about 80 miles to the south and east.
We toured the pictured mid-century home the day after it came on the market and made the first of four offers that would come in by the end of the day. The fact that we offered first and offered cash put us at the top of the list. We were able to stop hitting “refresh.”
We Bought a $90,000 House. And Yes, We Moved In.
We closed on the house Friday August 2nd, 2019, just a week and a half before my last day of work. I had a trailer full of our stuff to unload that day, and another few trailer loads to drag over before the fall set in and we took off for two months in Mexico and then two months in Spain.
For better or worse, we scheduled three weeks between those extended trips to experience a taste of winter again to remind ourselves why we’re choosing this life of more adventure and fewer blizzards. There’s also celebrating the holidays with family, and we were back for both Christmas and New Years.
The FIRE movement is often knocked for being overly frugal and unrealistic. By not only purchasing a $90,000 home, but also moving into it, I feel I’m doing my part to perpetuate the stereotype.
But we didn’t do this for the sole purpose of looking cheap. Let’s rewind and see how we arrived at a place where we would buy an old starter home when we could afford to spend a whole bunch more, but intentionally make this surprising choice.
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Gainesville, Florida. 1 BR, 1 BA. $120,000
In the fall of 2002, I was an intern living in resident housing in La Crosse, WI, renting for a year. I was excited to be moving on to sunny Florida, and I was keeping a keen eye on the condo market there.
When a place opened up in what I considered to be the premier property at the time, Union Street Station, I made some calls, arranged for financing, and by October, I was the proud owner of a swanky, one-bedroom apartment. I spent one weekend “camping” in the empty place with a high school buddy and his friend, and then found a renter to occupy the home for the next eight months until I moved in the following summer.
By the time I was moving on from residency three years later, I had acquired a fair amount of furniture, a fiancee and her stuff, and we used the condo as a home base while we traveled doing locum tenens work. Eventually, we got rid of most of that stuff, stored some things in her mother’s garage (Thank You, mother-in-law!), and rented the place out to two tenants over about seven years until we finally sold it in 2014.
Cheboygan, Michigan. 4 BR, 4 BA. $660,000
After two years as a road warrior, we were married, expecting our first child, and I had signed on to return as the Chief of Anesthesia at a small, rural hospital close to my wife’s extended family. I had mostly taken long-term locums assignments and lived in decent apartments, but we were ready to build our dream home.
We found a waterfront lot, spectacularly overpriced when we purchased it in 2007, just like every other property was at the time. We picked out a beautiful house plan reminiscent of some of Frank Lloyd Wright’s larger constructions, and we dropped over a half-a-million dollars on the build via a physician’s construction loan.
Doing the math, we actually spent a touch less per square foot on the place as compared to the 670 square foot condo in downtown Gainesville, but this place was six times the size!
We spared no expense because it was our forever home.
I lost my job a little over three years after we moved in.
The hospital went bankrupt and shut down, and two years later, I was sued along with the rest of the current and former Board members for having a non-voting position on the Board of Trustees for my final ten months at the cursed hospital.
After four years in which we had one long-term renter and several short-term seasonal renters in our one-time dream home, we sold it at a loss of over $200,000 (before realtor fees) in 2015.
Aberdeen, South Dakota. 5 BR, 4 BA. $325,000
When I was let go from the failing hospital, we were a family of four with a two-year old and an infant. I was back on the locums circuit, but unlike before when it just us two, it no longer made sense to travel for these jobs as a family.
After a few months of being apart with the exception of some weekends, we decided we could be happy anywhere as long as we were all together. With a brand new hospital opening in a growing and relatively affluent community in a state with no state income tax, I jumped at the opportunity.
In terms of the house, we didn’t downgrade in size, although we did in amenities. We no longer had granite everywhere, a two-story great room, or a dock in the water. We were on a pond, which was something, I guess.
After a couple of years, we had grown to like the town itself and the people, but not the remoteness of the place. The drive to see my family was over five hours, and hers was 15 hours away. A job opened up very close to my folks at a hospital that I was familiar with, having worked there as a locums doc in those early years. We were Brainerd-bound.
Brainerd, Minnesota. 5 BR, 3 BA. $269,000.
We had little trouble finding a buyer in Aberdeen, selling by owner with the title company helping out with the paperwork. We got back what we put into the house, and set out to look for a reasonable home to purchase in the Brainerd lakes area.
There’s a definite bimodal distribution of home prices in this part of Minnesota. Most homes without lakefront were going for $250,000 or less. A modest home on the lakes would command $400,000 or more.
We were looking for a place we could buy with cash (by selling mutual funds from our taxable account) in that price range in between.
We toured a handful of homes with the hospital-assigned realtor and didn’t see anything that had us excited. We decided to circle back afterward to a neighborhood where we had noticed a for-sale-by-owner sign.
Fifteen minutes and a handshake later, we had a verbal agreement to purchase a great mid-century ranch on the Mighty Mississippi, just across from the river from the hospital. When you take home call as often as I did, location is paramount.
Like our Aberdeen home, with a finished basement, we had about 3,600 square feet. What we gave up in recent construction, we gained in home character.
We put over $50,000 into a massive new retaining wall, new deck and patio, paint, and a roof, but we got that back when we sold in June of 2019.
Mullet Lake, Michigan. 2 BR, 1 BA. $15,400.
We actually purchased the home we lived in during the summer of 2019 way back in 2011. It was sold at auction just weeks before I would lose my job. We loved it because it was just nine miles from our dream home and could be easily reached by bike path, river / lake, or road from our home.
By the time we had it fixed up to be inhabitable — we spent about another $50,000 on an extensive remodel down to the studs — we were no longer living in Cheboygan.
Nevertheless, we’ve used it extensively ever since and it became our primary residence in June of 2019 and likely will remain so until at least June of 2021.
Alpena, MI. 3 BR, 1 BA. $90,000.
For a 43-year old who first became a homeowner at age 26, I’ve owned and lived in a lot of homes. I’ve never made any real money on them, and I did take one huge loss. We’ve loved our homes as places to live and raise a family, but with the exception of our current cabin, they’ve made for lousy investments.
One thing we have learned by living in 3,600 to 4,000 square feet most of the year, and squeezing into 700 square feet over the summer, is that we don’t need all of that space. It’s more to clean and maintain, heat, cool, and fill with furniture that rarely gets used.
This new-to-us home is 1,150 square feet with a two-car garage. Easy to clean, not much to maintain, and conveniently located. It’s close to the old elementary school that’s now used for homeschool outreach. The town is a shopping hub for the area, and there are two very nice lakes just to the north. We have property on one of them, and may build or buy a home there, eventually, but the place in town checks a lot of boxes for us right now.
The Benefits of Owning an Inexpensive Home
We now own two homes, the total value of which is under $300,000. We’ve got about 1,900 square feet 5 bedrooms, 2 bathrooms, a 2-car garage, and 1 boat on a dock on a very nice lake.
Owning inexpensive property has the following benefits:
- Low cost to insure
- Low property taxes
- Low cost of heating, cooling, utilities, maintenance, etc…
- Small opportunity cost (more money is available to invest elsewhere)
We’re going to be subjecting ourselves to some forced minimalism, but not nearly as much as we would have if we had kept the cabin as our only home, which was a consideration. But for the price, I’m very pleased with what we got. It’s a cozy, cool-looking home that could easily become a long-term, single family rental someday.
By having two places, we can more easily accommodate out-of-state guests. We could also consider making our new home available to others on Airbnb, as well, whether we’re spending time at the cabin or in another country.
Speaking of being out of the country, keeping our home base costs low makes it easy to spend more while away. Should we stay in a yacht? Why not? I booked this bad boy for a month spanning February to March of 2020, but sadly, the booking fell through.
Airbnb is ideal for longer stays, as weekly and monthly discounts are often applied when you search for a longer stretch. This one, in particular, offered 57% off for a full month (defined by Airbnb as 4 weeks). I’m a big fan of Airbnb and if you’ve not used them before, sign up with this link for $40 off your first stay and $15 off your first experience of $50 or more.
For the time that we actually spend in Michigan in the coming years, which I guesstimate will be maybe four to six months a year after the pandemic passes, I think we’ve got a great setup that gives us a convenient home close to family for the many family gatherings throughout the summer, and we’ve also got a fun getaway spot when we want to spend half the day in the lake.
It’s not at all what I expected, but I’m pretty happy with it, and I look forward to seeing how next summer goes with this setup. That is, unless we change our minds and do something different yet again. At a price of $90,000, it’s not like we will have made a huge mistake.
Been there, done that.
Final Days to Save $300 on WCICON22 Registration
The White Coat Investor Physician Wellness and Financial Literacy Conference, at which I'll be speaking about retirement withdrawal strategies along with several dozen outstanding orators, is taking place in sunny Phoenix, AZ from February 9th to 12th, 2022. Earn up to 17 CME / Dental CE. All in-person attendees must be fully vaccinated against COVID, and there is a comprehensive virtual / online option, as well. Hope to see you at the talks, happy hours, or online at WCICON22!
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How much did you spend on your current home? If you have plans to move eventually, will you upgrade, downsize, or move somewhere else? Are we crazy for buying a $90,000 home?