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Need to make a decision very soon


McCarthy

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Hello..

 

I will have to make a pretty big decision this week. I have been living in Florida for over 5 years in rental houses and I came to the conclusion to finally buy my own house and stop losing money by renting.

 

Well I research the topics of house buying, financing and did quite some location hunting for about a year. I found a really nice lot in a new community, picked all my options for the house, signed the purchase agreement and handed over a $10,000 deposit about a month ago.

 

As soon as I signed that paperwork things got complicated. Go figure. Now they told me that the pool will not appraise, I should skip it and build a pool later on with another loan. I told them from the beginning that I was only interested in a house if they can arrange a pool to be included fully with financing. "No problem at all" was the answer, until after I signed. There have been more things that really started to irritate me. The lender is a mess, a sister company of the builder, Pulte and Pulte Mortgage by the way.

 

On the other side I have been watching a couple fulltime RV YouTube channels over the last half year or so. I guess I planted a seed back then. You might have an idea where this is heading...

 

The past 2 week I spent many hours every day researching my options by pulling out of the builders agreement, trying to get my deposit back, selling most of my belongings, buying an RV and escaping all this "mortgage hassle, lying, property taxes, making myself a slave to dept, having to deal with annoying neighbors, yada yada yada" fiasco.

 

I own a business together with a business partner. My work is done 90% online and 10% on the phone. Usually 4 hours a day. As long as I have some form of internet access I can work from everywhere. I'm single, no kids, in my early 40s and have zero local obligations. Heck I could be gone for a year and my neighbors wouldn’t miss me.

 

The mortgage company is making pressure now, I haven’t signed the loan application yet and in order to stay within the builders deadlines I have to make a decision this week.

 

When I stick with the house, about 85% of my income will be needed for all expenses including food and savings for emergencies. Not much left for hobbies, traveling or big ticket items. If I wanted more I’d have to start another business.

 

If I decide to do full time RVing I will be able to live from 30% of my income. I still won't be buying big ticket items and I would have to quit some hobbies.. where should I put that stuff in an RV? But I will be able to save A LOT of money for a house or whatever I want down the road in 2, 5 or 20 years. Who knows maybe I’ll keep RVing until my time is over.

 

Another huge pro for RV living will be that I won't have to fear any income issues from my business. Even if our dividends go down by 50% I will be fine and can still put some money away. But if this happens while I'm living in my house I will be screwed. I’m not sure if I want to put this long term stress on my health. I’m not doing well with major stress.

 

If I decide to get on the road I'll buy a new 2016 Coachmen Prism LE 2150 LE. It’s a small diesel engine RV based on a Sprinter with good mileage and should provide be with plenty of room.

 

Here are my 2 questions:

 

1.) Am I nuts considering to get out of the house purchase agreement, go fulltime RV and change a huge part of my future? What would you guys do if you were in my position but with the knowledge you gained over the years?

 

2.) What do you think of the Coachmen Prism LE 2150 LE? I'd add a few things like the diesel generator option, deep cycle batteries and 2 solar panels on the roof. Here is a link: http://www.coachmenrv.com/product-details.aspx?LineID=53&ModelID=53#Main

 

Thanks for reading. Any input is really appreciated.

 

Don

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Welcome, McCarthy.

 

I'm with Chief 62 on getting out of the house deal. There is no way they didn't know that the pool couldn't be included in the appraisal. They misled you. It may be worth checking with an attorney to see if you can get out of the deal without losing your deposit based on their assurances. But I wouldn't hold out too much hope on that. That type of outfit usually only tell "safe" lies (the kind that don't cost them, but do cost you).

 

As for the RV life, it sounds like you've thought through how it would work with your business operations. But I wonder how much experience you have living and traveling in an RV. It really is a different kind of life. For one thing, a rig your size (we have one similar in size) has almost no storage for the kinds of things that you would store in the garage or the attic or basement in a traditional home. You'd have to have a plan for renting a storage unit or having space in a relative's home, etc. Or you'd have to commit to living a life without that "stuff."

 

The house deal has to have upset you emotionally, so even if you get out of that, don't act too quickly on the RV option. Give yourself time to research that option thoroughly so you can act with a cool head and heart.

 

Best to you.

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Both those ^ are right on . And , what I'd advise .

 

Hopefully you have something in writing from the loan company about the pool inclusion . If not , you may have to write that 10K off to education .

 

It sounds to me that you've already made the decision to RV . It is different , but in a good way . Laid back , live at your own pace , meet good folks , see beautiful things kinda good .

 

Relax and listen to your gut .

 

See you at the campfire . :)

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Welcome to the Escapee forums.

 

On the house purchase, based upon what you tell us I think that I'd get the money back as a starting point. Even if you don't go out and join the RV lifestyle, it doesn't sound like a good situation.

 

The RV life is an entirely different issue. Based upon your post I'd assume that you have no prior RV experience and from the house description, it sounds as though the RV you are considering is going to be very limiting in terms of living space and ability to carry all of the personal things that you probably will want to have with you. I love the RV life and our 12 years with the RV as our only home were some of the very best years of our lives, but it is not a life that works for everyone, or even for most people. I believe that to buy any RV with no actual experience to use in the selection process is a major mistake and the probability of your first choice being a happy one are very low. Before you make this sort of commitment, I strongly suggest that you first rent an RV and live in it for at least a week or two just so that you have at least some knowledge of the life. Then you also need to do some reading of books on living in an RV so that you lean of the many things that are involved in such change of lifestyle. There are many very good books available from Amazon or from your local library so just take your pick and get one or two. Once you do that, it is then time to begin research on the choice of RV and to do that well you need to first study RVs and RV terms and specifications.

 

This is a major change of lifestyle so do not rush into it without proper research and study. We are here to help you and support you in any way that we are able, but it would be a mistake to jump in blindly. Please take some time and make sure that this is what will work well for you.

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I believe you have some good advice and I further believe you made a very good decision to come to this forum to seek some advice. I pretty much agree with all the others have told you especially Kirk's advice to explore the RV life some more before you buy a coach.

i will add to that issue. First I have two friends with the type of coach you are talking about. Both use them part time only. I would not recommend that coach to anybody to live full time in. The storage space is very limited and you would not be happy with it in short order in my opinion.

I have for some years said if I won the Lottery I still would not buy a new coach. Much of first two years of ownership are spent fixing all the little things the manufacturer did not do correctly! I buy gently used RV's that are 2-3 model years old. However, I would love to win the lottery to demonstrate my conviction.

Kirk recommends renting one for a week or two, not a bad idea but with your seeming commitment you might thing about buying a used gasser in the 30 to 33 ft range to begin with. Not a whole lot of money but would give you a good feel for the lifestyle and its complexities and joys and in a year or two upgrade to the coach you decide you like, maybe a DP.

We have been full time for the last 5 years in a big DP but recently transitioned to part-time and got a smaller 33 ft DP that we are quite happy with, but would not have been full time in it.

Good luck and post any questions you have on this forum and you will get some good answers to help you make the transition. We did and still do!

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As long as you can easily work via internet, I, too, would scrap the house deal. As a single person you probably don't have much 'stuff' and if you can live with minimal possessions, I think the RV you're looking at would be just fine for one person but do a good inventory of your belongings and plan where you're going to put everything. If you think you'd need to rent a storage unit for your things then it will definitely add to your costs - by a lot. It's best to avoid that added expense.

 

As far as getting RV experience first, none of us were RVers. We had to begin somewhere. You'll learn as you go on how much you'll like it. Renting an RV costs a lot of money and you'll only have it a short time so it really won't give the a feel for living in it. There are many younger RVers out there nowadays because of technology and still having to work. It can be done. Best of luck to you.

 

Here's a good site of a young RVing couple . They have a lot of good information on their site, especially the technology part of it. There are also many young working bloggers out there and this site has a good page of links to some of them. Definitely check out Technomania's link for the technology aspect of it. Hopefully some of them will pipe in here.

 

http://wheelingit.us/blog-links-resources/

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Fully endorse everything above. Of course, you're asking an RV forum and many of us have been in similar turning points and opted for the RV lifestyle. We might be a bit bias. ;) I would start with a used rig as well and commit to give it a try for 6 months. It does take a little time getting used to the lifestyle, but in 6 months, you're really no worse for the wear, you'll have a much better understanding if it's the right life choice for you, and you haven't made a tremendous financial investment into it. It wouldn't be difficult to make the transition back to a stick and bricks if it didn't suit you, and maybe it's just the 'get-a-way' you need to "decompress" a bit.

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If I decide to get on the road I'll buy a new 2016 Coachmen Prism LE 2150 LE. It’s a small diesel engine RV based on a Sprinter with good mileage and should provide be with plenty of room.

The two of us lived in a 24' Sprinter-based RV for 18 months. We rented a storage room for those things with which we preferred not to part. We did a lot of traveling during that time so appreciated having a small RV we could park nearly anywhere that also got good mileage. The biggest challenge I see for you here is keeping decent internet wherever you go. For that I highly recommend reading Technomadia's blog for current suggestions--http://www.technomadia.com

 

Linda Sand

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I won't attempt to give you much fulltiming RV advice. But I'll give you some feedback on your financial situation. Number 1... if you're relying on dividends from your business to live off of, why not just draw a salary to avoid the double taxation of dividends? The salary will be tax deductible so your business gets the tax deduction unlike what you describe now as 'living off the dividends' and the money is only taxed once at your individual level.

 

Number 2... home prices have been escalating for the last several years in Florida depending on... that's right... location. Is there a possibility that you could close on the house and sell it after 2 years or so? IOW, flip it for a profit? Of course, there are no guarantees. Or build the house, live in it for a while, rent out a room or AirBNB or something, then RV and keep renting the house and catch some price escalation. The baby boomer demographics are on your side. More and more of us will be moving to Florida (and other SunBelt states) in the coming years of retirement and looking to buy.

 

Number 3... A question I would have for you is why did you commit to buying/building a home at 85% of your income? And even more important, how would you have qualified for a home loan/mortgage at something close to a ratio of 85% debt-to-income. I understand that this 85% of yours includes other living expenses and not just housing expenses, but the numbers don't seem to make sense.

 

Number 4... In most home build/purchase agreements there is a financing contingency. If you can't get the financing you desire for ANY reason, you can kick-out of the contract. If your purchase agreement includes a pool in the specs and you can't get the financing for the pool, you're typically off the hook. Please provide more details.

 

Number 5... From the way you describe your finances and income, it sounds a bit tenuous. Maybe you should consider working 8 hours per day instead of only 4 hours. Would that double your income? I don't get much of a sense from you that your income is stable enough to even fulltime RV without severe limitations. It seems that instead of planning your income to fit an RV lifestyle, you are trying to fit an RV lifestyle to your income. Remember, if you're struggling to support a standard of living now, it probably will not change just because you choose to live in an RV.

 

Number 6... I would not focus on RV shopping quite yet. I would suggest doing some life style and life change planning in order to nail down your basic priorities. Buying the RV is the easy part. Just my observations. Hope I did not offend.

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I would not discourage you from the RV, but I hope you have realistically estimated your costs. It can be more expensive than you think to full-time, depending on how you choose to live.

 

If you had said you need a solid 8 hours of strong internet each day, I would have said forget it because mobile internet is expensive. It is also very hard sometimes to get a strong signal. But you said "some kind of internet" and only need four hours a day, so I assume a slow signal would be OK much of the time. I use 40 Gigs a month through Verizon and sometimes get close to my limit, in spite of no streaming video or watching TV online. (I teach online college classes half-time and spend about 4 hours online per day.) I spend $220 for those 40 Gigs and unlimited cell service for my phone. However, I have a special deal and more Gigs would be about $150 more per month.

 

And I assume that you are working 8 hours a day, just that you only need 4 hours of online access. Is this right? I am guessing you can do some work offline. However, you will need some savings and stability in income, as the others have suggested.

 

Also, do you plan to do a lot of driving and moving around? If so, a motorhome is usually a good idea. If you plan to stay in one place for months at a time, a 5th wheel and a pickup truck might be more practical. If you need to live "large" and need more storage room, a larger motorhome might be best. However, if you are a minimalist, especially since you have no spouse or kids, that size might be just fine for you.

 

In any case, I wish I had been in a position like you are at your age. I would have taken the chance and gone for it!!

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Hey guys and gals,

thank you so much for all the input. I hope I can answer everything:

 

I won’t be able to get out of the house deal AND decide later on what I want to do. IF I get out I WILL try full time RVing. I don’t like compromises and I won’t keep paying rent for a house. IF I op for RVing I will stick to this lifestyle for several years, if nothing bad happens at least 5 years. I will be able to save a lot of money in this time and either buy a cheap house out of pocket or have a down payment of 50% for a nice house with pool. In that case I could easily build a house and pool separately without being forced to use the builders pool contractor with a $10k monopoly premium.

 

My level of RV experiences is very limited. I was on a couple trips with my parents back when I was a teen. I have good memories of that time but know that it does not count as experiences. My parents are RVing 6-8 month of the year and that gives me a good understanding of it. I also did a lot of reading over the months and watched several full time RVing YouTube channels. I have a good understanding of the consequences, limitations and what to expect.

 

Since I have to decided this week I won’t be able to rent a RV in order to find out if I like it. If I decide for RVing I will have to pull through and adapt. I’m very sure that I will succeed. I actually like these kind of challenges.

 

Regarding my down payment for the house, things are complicated: I can get my money back if I don’t qualify for the loan. This can happen if I for example have to move, which will happen if I chose the RV route. Problem is that the lender (which is a sister company of the builder) send me a letter of conditional pre approval. They can and most likely will use this to keep the down payment, even if I get denied at closing. Many people had to deal with this dirty loophole. A general attorney in Arizona filed charges against the same builder / lender and won a couple years ago. If I’m willing to hire a lawyer chances are I will get my money back. That’s at least what I can read online from others.

 

But even if I can’t get my $10k back: I can’t make this decision depended on $10k. This decision is about:

 

- Improving my debt to income ratio risk (besides the house loan I have no other debt)
- Saving money while RVing and possibly buying a lot and / or house out of pocket down the road (I hate lenders)
- Experiencing adventures on the road while my health still allows for it. Who knows how things are in 10, 20 or 30 years?
- Seeing more of the country and maybe finding a better place to live later on. I really like Florida but miss mountains and less heat in the summer would be nice too.
- Less stress by knowing that I will always be able to afford full time RV living. But big monthly mortgage payments on the other hand will cause some form of stress which will cause health issues.

 

 

On the other side I know that this house will have many pros too:

 

- I will be settled which will help me to improve my living routine.
- I can finally build some equity.
- House prices are going up in Florida. The same house will most likely cost me an additional $100 - $180k in 5 years.
- I’ll have a really nice 2500sqft / 3 car garage home with pool in a good neighborhood with tennis courts, community club house and pool.
- The beach is only 20 minutes away.
- Awesome winter and spring weather.
- I’ll have 3 bedrooms alone for my hobbies like electronics lab, reloading room, movie / 80s room plus a seperat den for my home office.
- I got $11,000 in discounts on the closing costs alone.
- I locked in the house costs at the prior price. The same floor plan went up by $5,000.
- I also got a $3,000 discount on the lot premium.
- I’ll have about $80,000 in options, best kitchen, Italian tiles in every room, this house will be really nice to live in.

 

Talking about gut feeling: I’m right in the middle! Both options sound great. There is no clear answer for me.

 

“See you at the campfire” and boondocking at WalMart sounds awesome, so does: “I’m going to take a break from work in my home office and jumping into my own pool while watching a movie on the big screen on the patio.”

 

Regarding the Coachmen Prism LE 2150 LE: I picked this RV because it provides much better MPG compared to the gas engine c-class options and it is also pretty short. I read things like 16 to19 MPG. I’ll be able to do more boondocking in a short rig. I like the minimalistic approach of having only the basics regarding the amount of room. Keep in mind I’ll be solo. I don’t have to arrange myself with anybody. I’d add 2 solar panels, batteries, GPS alarm and be done.

 

The Prism LE 2150 LE is very affordable for a Mercedes Sprinter based RV. Many other Sprinter RVs are at or above $100k. This Prism LE 2150 LE can be found new for $75k incl. options.

 

I also entertained a used rig like a 2005 class c Four Winds 5000 for around $25k but I would lose a lot of money for gas over the years. I also don’t like living in a used place. My past homes and apartments all have been new and I was the first one to live in it. I’m picky when it comes to hygiene.

 

Regarding my work and internet I need most of the bandwidth for emails, loading websites and working on a couple web servers. I can deal with slower connections here and there. 20 gigs should do, if not I’ll go with the Verizon 40 gig plan.

 

I will get a storage unit for all those things that I’m not willing to part with. Mainly stuff I wouldn’t be able to buy back again. I know that I won’t be able to bring a lot of stuff in a Sprinter based RV.

 

Walter: our business is a Florida S-Corporation. There is no double taxation on our income. The amount of dividends will be less in future because we decided to take less money out of our business in order to reinvest for the future and a second leg to stand on. The past and current ratio for the mortgage is not 85% per se. The mortgage would be below 25% of my income. But as soon as I have made a decision and everything is settled we will lower our dividends to what we need and start reinvesting. If shit hits the fan we can still pay out more dividends but for now I would like to base my figures off from a “worst case scenario”.

 

PS: the pool is not part of the sales agreement. I simply can use their pool contractor in order to have the house and pool finished for the same appraisal in order to get both financed with the same loan and lender. And this might not work out because my pool will cost too much and not fully appraise. I might end up building the house only and building the pool with a better and cheaper company right after on another loan.

 

The RV shopping is not my issues, I just had to make sure that there is an RV out there that matches my requirements of quality, MPG and all that in a short package.

 

I won’t be driving that much, I’m not in a rush on the road. I will do a lot of boondocking and I don’t mind going from WalMart to another mixed up with state parks and visiting friends.

 

Here is a list of cost I came up with:

 

RV Loan 6 years $800.00
Address / Mail forward $25
Storage $140.00
Water / sewer $30.00
Power (Solar) $0.00
Internet (business expense) $0.00
Health Insurance $384.62
Vehicle Insurance $120.00
Food $300.00
Gas (Diesel) $200.00
Savings Emergency $200.00
Savings RV maintenance $100.00
Money for fun $200.00
--------------------------------------------------
Monthly expenses $2,499.62

 

Plenty of income left for savings and if business slows down I’ll still be on the safe side.

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You have gotten some good advice. My only additional comment that struck me reading this is your statement that " I like the minimalistic approach of having only the basics regarding the amount of room." runs totally counter to your house approach and your stated hobbies. Are you really going to find an RV-based minimalist approach realistic? A minimalist approach to life does not include all the things you state you like/have.

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  • 2 weeks later...

Others have given you good discussion on the lifestyle so I will give you some thoughts on the RV itself.

 

Be sure to check the warranty to make sure it allows full timing in it.

 

In one picture it shows the generator located near the rear bed, if this is going to be your bed you may not want the generator there as it could be difficult to sleep.

 

Be sure there is enough space on the roof for your solar panels, small RVs do not have a lot of usable roof space.

 

Be sure to read up on issues with the Sprinter chassis. Also make sure that you are getting a 2016 chassis as the years for the chassis and the RV do not always match and can make a difference when trying to get warranty work on the chassis.

 

Fuel tank at 26 gallons is pretty small. So you will be limited on your fuel range. About 20 usable gallons (never run it low) at 16mpg is only about 320 miles.

 

If want more toys with you, see if you can put a trailer hitch on it and pull a small trailer.

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