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Beach house real estate advice

Discussion in 'Other Off Topic Forum' started by schwoo, Apr 6, 2017.

  1. schwoo

    schwoo Formula Junior

    Jun 22, 2013
    734
    Florida
    Full Name:
    Marquette
    My wife and I have a second home, oceanfront in Amelia Island.
    It's worth 1.4 million. 30 year fixed 2.8%. Owe $700. It's our only debt. We own our primary residence, paid cash. Appraised 2.4 million.
    Her dream oceanfront home just became available 4.25 million. Willing to offer 3.8, sell our current beach house, put that 700 down, plus 1.5million cash. Total 2.2 million down , finance 1.6 million 30 yrs fixed.
    We also own our medical office, and purchased my parents home so they can live debt free. Have no other debt.

    Is this crazy? Do any of you guys carry this much debt. We can easily make the payments, but this debt is uncharted territory.

    Really just interested in your thoughts and advice.

    Thanks so much!


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  2. energy88

    energy88 F1 World Champ
    Rossa Subscribed

    Jan 21, 2012
    11,208
    Fredericksburg, VA & Sarasota, FL
    Full Name:
    John
    The answer probably depends on your overall net worth and what percentage is real estate. You might want to post this question in the Silver section- and there will be no shortage of answers, some of which could be good advice.
     
  3. Bill in Atlanta

    Bill in Atlanta Formula Junior

    Nov 22, 2004
    326
    Check your PM
    thanks
    Bill



     
  4. Bill in Atlanta

    Bill in Atlanta Formula Junior

    Nov 22, 2004
    326
    Also...

    Assuming you are looking a K. Kelly's house (the Cottage)?
    If so, i've stayed there and it is MAGNIFICENT
    Done right, I would buy that if I were to live there full time
    Good Luck
     
  5. ttforcefed

    ttforcefed F1 World Champ
    Rossa Subscribed

    Aug 22, 2002
    11,995
    if you had to cld you pay cash for it AND still pay ur bills with no issue? if so, then yes you can afford it. If not, then ur rolling the dice and only you know how aggressively because you know what your assets/liabilities/earnings are. As a function of income, if you make 1 to 2M a year then 1.6 isnt crazy. If you make 400 to 600k a year id say its alot.
     
  6. Manda racing

    Manda racing Formula Junior
    Silver Subscribed

    Feb 25, 2015
    927
    Bakersfield, Ca
    Full Name:
    Mark
    I'd be trying to get in escrow and get it tied up.
     
  7. douglas360

    douglas360 Karting

    Nov 7, 2016
    236
    SoCal
    If you can easily make the payments and the bank will approve the super jumbo, then go for it. What's wrong with some leverage / using other people's money? Especially on an asset class like desirable real estate.

    You might wanna check rising water level predictions though...I did this on a beach house property in Costa Rica and it spooked me a little. Granted, it could take 30+ years but you don't want that asset under water (literally).
     
  8. spicedriver

    spicedriver Formula 3

    Feb 1, 2011
    1,723
    I would borrow against the office first, so you can deduct the interest payments from your business income. Check with your tax attorney first.
     
  9. schwoo

    schwoo Formula Junior

    Jun 22, 2013
    734
    Florida
    Full Name:
    Marquette
    Wow- good advice here. I knew I could count on Ferrar-chat. The grass isn't always greener. We looked at the house again. It's beautiful, but will come with significantly higher upkeep and maintenance. It would be fine if it was our primary residence. Plus, we have to children, as the get older our weekends will be committed to football, volleyball, etc. Really going to have to think this carefully. But I truly do appreciate the feedback. Thanks!

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  10. Jana

    Jana F1 Veteran
    Silver Subscribed

    Mar 4, 2015
    9,850
    If you do not see a decline in your financial ability to pay for as long as you intend to keep the house, then why not. I don't know your annual income or how secure it is, but those are things you will want to consider. Something to consider though is how long it can take to sell property with a high value, even if it's in line with the rest of the area. And that goes doubly for beach property. Only so many people can afford it and then narrow that down to the people who don't have to commute somewhere far for work, and you have an even smaller pool of buyers. I say this in case things go downhill and you need to liquidate.
     
  11. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    12,525
    I think I recognize the house you're referring to. The elevation seems okay, but of course a large enough storm can do whatever it wants.

    That is a lot of cash to put down, but it appears you can afford it. The nice thing about that house and location (assuming we're talking about the same one) is that you would have an easier time renting it out than other places along the first coast of FL.
     
  12. Bill in Atlanta

    Bill in Atlanta Formula Junior

    Nov 22, 2004
    326
    Not to highjack the thread but I am looking to purchase an oceanfront home or condo on Amelia Island.

    Prefer Carlton Dunes condo or SFH in the 3/4000 block of S Fletcher

    Anyone have one for sale or know any leads please let me know !

    thanks
    Bill
     
  13. TG

    TG F1 Veteran
    Silver Subscribed

    Oct 26, 2004
    5,804
    Newport Beach, CA
    Full Name:
    Taylor Good
    Brilliant.
     
  14. richardson michael

    Aug 17, 2013
    239
    brittany. france
    Full Name:
    michael richardson
    Thought you may all be interested in holiday home just come onto market....Cap-Ferrat,Nice,S.of France. The worlds most expensive home........One Billion Euros !.
     
  15. James cln

    James cln Karting

    Dec 20, 2015
    150
    San Antonio
    Full Name:
    James cline
    Not going to tell you what you want to hear but don't do it. A borrower is a dove to the lender. I have 2 homes as well as commercial property all paid for. It is sooo nice to owe no one. I would work to pay everything off- maybe sell but pay cash for any I would purchase. Why strap on such a heavy obligation?? Just MHO. Wish you the best, james in San Antonio
     
  16. toggie

    toggie F1 World Champ
    Owner

    Nov 30, 2003
    18,454
    Virginia
    Full Name:
    Toggie (Ron)
    I would avoid going into big debt for something that is a "nice to have" like a bigger beach house.

    I'm 59 and starting to investigate going in the other direction (selling our big home and getting something smaller and easier to maintain).

    Also, I like our 3-bedroom beach condo because the building manager and staff do all the maintenance. It is great to just show up and enjoy it. We don't rent it and go there several times a year.

    The money side of things isn't the primary concern IMHO, it is enjoying the lifestyle you create for yourself with your possessions. Too many possessions (or too large a possession) takes some of the fun out of it.

    .
     
  17. msdesignltd

    msdesignltd F1 World Champ
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    Nov 17, 2003
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    NYC. / E. Hampton
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    Michael
  18. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    12,525
    +1 This is really good advice. As much as I hate condos, I currently live in one and being able to leave for weeks or months at a time and return without issue is very nice. I have zero worries about the place or the security of it.
     
  19. mchas

    mchas F1 Rookie
    Silver Subscribed

    Oct 5, 2004
    4,574
    Los Angeles
    Full Name:
    Mark
    Don't forget commissions when you sell your current place, could be ~$75k so you might have $625k left after sale, not $700k. Not a big deal when talking about $4m+ purchase but something to consider. Also if you ever decide to sell the new place, you will take a $200k hit on commissions again.

    I still don't understand why real estate transactions need to cost 5% these days but that's another story.
     
  20. Bill in Atlanta

    Bill in Atlanta Formula Junior

    Nov 22, 2004
    326
    Are Congratulations in order ?

    I see Katherine's house just sold...was it you ?

    BTW, I bought a Carlton Dunes Penthouse just down the road...love it
     
  21. 355dreamer

    355dreamer F1 Veteran
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    Apr 3, 2006
    9,987
    DC Metro
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    L.C.
    Amen. Don't get me started.
     
  22. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    12,525
    Gotta pay the toll I guess. Similar to how shipping port harbor pilots make $400k a year lol. Both will tell you it's the hardest of the hard jobs as if they're still underpaid. ;)

    Shame the house was built right next to a public access beach parking site. Half the windows have a nice view of that asphalt lot as there is no side yard at all.

    This is the house if anyone is curious: https://www.zillow.com/homedetails/3652-S-Fletcher-Ave-Fernandina-Beach-FL-32034/45937160_zpid/
     
  23. 355dreamer

    355dreamer F1 Veteran
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    Apr 3, 2006
    9,987
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    L.C.
    RE agents and Harbor Pilots aren't even on the same planet.
     
  24. Bill in Atlanta

    Bill in Atlanta Formula Junior

    Nov 22, 2004
    326
    Yes, that's Katherine Kelly's house
    Interesting that the OP doesn't respond to posts or PM's......
     
  25. ClydeM

    ClydeM F1 Veteran
    Rossa Subscribed Owner

    Nov 4, 2003
    8,736
    Wayne, NJ
    Full Name:
    Clyde E. McMurdy
    if your dream house is the Trump estate on St. Martin
    or the Richard Branson Necker Island in the British Virgin islands,
    I'd press them for a bigger discount :)
     

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