Well folks, I decided to take my revenge spending seriously and buy myself a beachfront dream house. I was going to wait until my family moved to Hawaii before making the splurge. But after such a rough 12+ months, I asked myself, why wait? I’m not getting any younger!
Ever since I landed my first job post-college in 1999, I’ve been diligently saving and investing most of my money. Despite a couple of downturns over the past 22 years, overall returns have been solid.
When it came to renting or owning, I always spent the least amount possible on my housing expense because I was working so much. For example, the first apartment my roommate and I rented was a studio at 45 Wall Street. For privacy, we just used a $20 paper room divider between us.
When I bought my first property in 2003, I spent half my budget on a two-bedroom condo instead of a much larger three-bedroom condo or a single family house. In retrospect, I wish I went all-in back then.
After being frugal for so long, I decided I would buy a dream house if one ever popped up. And amazingly, one did!
How I Found My Beachfront Dream House
One of my hobbies during the pandemic has been looking for dream homes on Zillow and Redfin. Despite some very undependable estimates, it was always fun to check out homes to escape the lockdown nightmare. I have a couple e-mail digests that automatically send me homes for sale based on select criteria. When one popped up right on the beach in May 2020 I knew I had to have it.
The only problem was that it was $2 million out of my budget! No matter how much more I worked online, there was no way I could come up with that much more money in a reasonable amount of time. Therefore, I shelved this dream house in the back of my mind and kept looking.
Three months passed and there were no offers. Six months passed and there were still no offer. Therefore, I asked my agent to send out a feeler to see if the seller was willing to accept $2 million below ask. The selling agent said maybe, but not yet. So I waited some more.
Then, in early February 2021, 10 months after first listing the property, the selling agent contacted my agent. She said the seller was willing to sell for $1 million below its original asking. By this time, I had waited so long that I decided to hold firm on my $2 million below asking offer.
A week later, the sellers acquiesced and agreed to come down to my price! I hopped on a flight two days later to see my new baby in person. It was everything I had imagined and more! Much earlier, my agent had given me an hour video tour only.
Because the ultra-luxury home market is not hot in Oahu (only homes sub $1.5 million are), I decided to have an inspection contingency. The contract was also for a 35-day close, which gave me time to sell some of my beloved growth stocks to come up with the 50% downpayment.
Sorry, but I feel embarrassed to reveal the final sales price. Also, since only one other home sold in this price range this year, it would reveal the address if anybody searched. I just know I got a decent deal.
Size Requirement For My Beachfront Dream House
As a family man now, I require my dream house to have at least five or six bedrooms and four bathrooms over at least 6,000 sqft of interior living space. It sounds like an unnecessary mega-mansion, but hear me out.
My wife and I would each have our own bedrooms until our daughter starts sleeping soundly at night. This could take up to three years based on our son’s sleeping history. Our daughter would have her own room. Our son would have his own room. That makes four bedrooms.
Then our au pair would have one room with an en suite bathroom and her own kitchenette. Finally, we’d ideally like two more bedrooms to be used as offices and/or guest bedrooms. As a writer, I really need my own quiet space to think that’s separate from my bedroom. Therefore, a total of seven bedrooms would be ideal.
Amazingly, the dream house we found has seven bedrooms with a carriage house and pool! Further, the dream house is right on the beach. I’ve always wanted to be able to go to bed with my windows open and listen to the soft waves crashing on shore.
Some Pics Of Our Beachfront Dream House
Obviously, I can’t give away the address of my dream house for privacy reasons. However, I will share some pictures. Because there is a gate and the lot is very deep, you can’t tell what the house looks like from the front.
Below is our living / kitchen area that faces the pool and the ocean. Having an open floor plan is important so we can more easily keep an eye on our kids.
Here is our pool, which is sheltered on the west side by a small hill with foliage. When you’re lounging by the pool you will hear the palm trees continuously rustle in the wind. It is so relaxing!
Here’s our lawn, where I plan to play chase and soccer with our kids. If it’s not too gusty, we will also play badminton.
At the end of the day, the value of a property is mostly in the land. Having an acre of flat land to run around on is really special, especially if we plan to homeschool.
Below is the view from our upper deck. The deck is not as big as we’d like, but it still offers outdoor space for the main bedroom. You can see Koko Head in the distance.
Below is a view from the main bedroom on the ground floor that opens up to the lawn.
Here is the aerial view of the home. The lot is deep, which provides a lot of privacy from the neighbors. You can’t hear a single car on the street either. I plan to befriend my neighborhood with a tennis court.
Finally, here’s another picture of the house from the pool.
The pictures don’t do the house justice. Then again, the house is not that fancy either at about 7,000 square feet. It was remodeled with permits nine years ago and the windows were changed within the past five years. I may need to spend about $50,000 changing the roof in the next 10 years though.
What we really love about the home is the location. The privacy is wonderful and you can’t beat walking directly to the ocean from our backyard. However, because the home is beachfront, the city does require homeowners to get flood insurance. But surprisingly, flood insurance is relatively affordable for a home this size at $10,000 a year. I thought it would cost closer to $25,000 a year with a much higher deductible.
Always Live The Dream If You Can
It’s odd to spend so much money on a home. However, at 43 years old, I feel it’s time to live it up to the maximum for the second half of my life. The global pandemic has really been a catalyst to change my frugal ways.
Like many of you, I’ve worked incredibly hard over the decades. I’ve also taken a lot of risk by leaving my career early to focus on Financial Samurai. Publishing 3X a week since 2009 to help folks achieve financial freedom sooner is not easy!
When stocks were getting blitzed in March 2020, I bought hand over fist. Therefore, I don’t feel guilty splurging so much on a dream house. We plan to live in the house for the rest of our lives.
There’s no point accumulating a lot of money if you don’t spend it on a better life. When it was just myself, the return on a dollar spent didn’t go very far. By now that I have a family, each dollar spent provides at least 4X more usefulness.
My parents and relatives can come visit and enjoy the home. Further, I might host a Financial Samurai reader retreat at the home one day too when things are safe to gather again.
If you want to one day buy a dream home, take bigger risks when you are younger. Most of the time, your gambles won’t pay off. But when they do, they can pay off huge!
Once you’ve got the money, do your best to convert some of it into something you and your family can enjoy. For me, a beachfront dream house is just the thing.
Real Estate Buying Strategies During A Global Pandemic (to help you land your ideal property)
What’s It Like To Live In A $18 Million Mega-Mansion (my experience staying at a friend’s fat pad for a week)
Beachfront Or Ocean View Property? (both are great)
Readers, do you own a dream house? If so, when did you buy it? Do you enjoy living it up? What are some other things you’ve spent money on with your fortune? Happy April 1st, where some of us have more fun than others. Never stop dreaming! Now get back to work so you can go get that raise and promotion.
Here’s my 1Q 2021 review and what’s next for stocks, real estate, and bonds.