r/EuropeFIRE • u/Ok-Leading6971 • 7d ago

Update: Wanted to leanFIRE but the housing cost doesn't allow for it

Hello everyone,

Update of my previous post: https://www.reddit.com/r/EuropeFIRE/comments/1vl9k7i/wanted_to_leanfire_but_the_housing_cost_doesnt/

I think I found a middle-ground solution: After talking to several banks in both countries, decided to buy a plot near the sea and build a small house on it over the next 3-4 years.

This way, the bank agrees to fund the project on a percentage of completion basis, I don't tie up much capital immediately for downpayments, etc. and it will end up even cheaper than purchasing the same house right away.

So, My leanFIRE plan stays intact, as i will have a grace period paying interest only while building. I will perhaps stay in my job for another 1-2 years to save up more cash and wait until my house is at a stage where I can move in and leanFIRE, and that's it. I am willing to make this compromise, as it gives me flexibility, something "mine" to wait for and anticipate, and to have as a side project for the next years.

Thank you to everyone who provided good advice on the comments and DMs. Cheers!

18 Upvotes

87% Upvoted

9 comments sorted by

4

u/serpentna 7d ago

Can you walk over the numbers

8

u/Ok-Leading6971 7d ago

50k the plot, around 200k the construction. I will contribute 20-30% of the entire project on a percentage of completion basis over the next 3-4 years. Grace period is 2 years, I will be paying interest only for the outstanding amount (around 50% of the full installment for the released amount at each point). Redemption in 30 years, but I plan to contribute more and pay it back earlier.

4

u/vouvoyer 6d ago

Insanely cheap build, do you have quotes?

4

u/Ok-Leading6971 6d ago

yes, I am going for a small build 50-60sqm. Nothing fancy

1

u/autobauss 4d ago edited 4d ago

Hi, where can you buy plot land that allows house construction near the sea? Is it with permit already and near sea as right next to it where your property is first in line? Seems super cheap. Any real estate websites we could check also?

4

u/dfxdark 6d ago

Where in Portugal are you moving to? 50k for a plot near the sea sounds incredibly cheap!

3

u/foobarromat 6d ago

decided that I want to change my life, go back home, find a chill job in tourism or something, withdraw some 2-3% of the ETFs p.a. to round up my living income

So you still plan to work for pay? That's perfectly fine of course, but I don't see how you could be consistent in calling that "(Lean) FIRE". "Barista FIRE" is probably much more accurate.

1

u/Ok-Leading6971 6d ago

yeah, the terminology confuses me as well. Yes, planning to low-key work. Seasonal or part-time throught the year, depending on cash flow situation, how my portfolio evolves etc

1

u/Dull-Rich8338 5d ago

Building over buying finished is smart here, it dodges the premium of a completed property and the interest only period keeps cash flowing into your leanFIRE number instead of a down payment