by Hey there, fellow FIRE enthusiasts! We’ve got some exciting news to share about a big step in our early retirement journey. Remember our Nuestra Casa fund? Well, it’s about to be put to good use because… we’re moving again!
Florida, Here We Come!
After much deliberation, we’ve decided to make Florida our next home state. If you’ve been following our recent posts, you might have noticed we’ve been spending more time in the Sunshine State lately. During our most recent trip, we fell in love with an area on the Gulf Coast that checks all our boxes:
- Lots of greenery
- Abundant recreational activities
- Beautiful trails and beaches
- Close proximity to Grandma (always a plus!)
We discovered that the best way to get to know a potential new community is to walk its streets. So that’s exactly what we did! We explored parks, beaches, and playgrounds, chatted with locals, and imagined ourselves living there. When it came time to decide on buying a house, the choice was clear.
A Change in Plans
Originally, we planned to rent in Florida from November to April while house-hunting. But why wait? We decided to find our dream home online and move right in. This approach makes even more sense now that we’re planning to rent out our current home instead of selling it.
Finding “The One”
And just like that, we found her—a house in our desired neighborhood with most of the features we wanted. Since we couldn’t visit in person, my mother-in-law graciously agreed to film a tour for us.
Within hours of seeing the video, we made an offer. After some negotiation, the sellers accepted, and we’re set to close on October 5th. The best part? We came in under budget by $100! Is it just a coincidence, or are the FIRE gods smiling upon us?
The Rental Property Dilemma
Initially, we planned to sell our current property to fund about 2.5 years of spending during our first five years of early retirement. However, we’ve decided to rent it out instead. Here’s why:
- The property generates healthy returns that are hard to replicate with equities.
- Selling real estate to invest in stocks goes against our goal of increasing tangible assets in our portfolio.
- As we enjoy retirement, we’re focusing on gradually converting our stocks and bonds into tangible investments.
Navigating the Cash Flow Challenge
Renting instead of selling creates a short-term cash shortage. To address this, we considered two options:
- Secure a loan for the rental property
- Take out a mortgage on our new home
We opted for the second choice, deciding to mortgage 50% of the new home’s purchase price. With a 3% interest rate and the potential for significant profits from the rental property, it made financial sense. The net income from the rental should cover our new mortgage, insurance, and property taxes.
We’re applying for an asset-based loan, which is ideal for early retirees without W2 income. We’ll share more about this process after the purchase is complete.
The Countdown Begins
With about 45 days until closing, we’re in full preparation mode. We’re selling as much of our belongings as possible, especially bulky items, to downsize our moving truck. We’re still debating whether to drive the truck ourselves or outsource the entire job.
This out-of-state move is unique for us—we have more time to prepare without the distraction of full-time jobs. Our current 9-to-5 is all about getting ready for this exciting new chapter!
What’s Next?
We can’t wait to relax on our new lanai, but we know there’s still a long way to go. As always, we’re keeping in mind that the journey is just as important as the destination.
Have you ever made a big move in pursuit of your FIRE goals? We’d love to hear your stories and tips for a successful out-of-state relocation in the comments below!
Stay tuned for more updates on our Florida adventure and how it fits into our early retirement plan. Until next time, keep working towards your financial independence!
