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Week 2022#46: a house full of problems
Trying to make decisions in the face of uncertainty
What I’ve learned
There are decisions nobody can make for you and ultimately you’ll reach limits with how much information and new perspectives you can get when talking to others.
🙏 thank you, everybody, who had to suffer through my incoherent ramblings about this topic.
After spending about two weeks with research, contacting banks, moving money around, etc I realized that I’m spreading myself too thin.
I could have done much more for my business during that time.
There is always something you can delegate, even if you think everything you do is tied to your person.
Expectation vs Reality
After writing last week’s article, I’ve put my expectations for this week into my journal:
I'll have clear idea about my credit situation,
False! I know now that my only option is a mortgage on the apartment, but I don’t know yet whether I can actually get one and how much money it would be.
I’ll agree with Taavi about a simple plan for fixing the garage,
True! The garage will get a new roof and a door into the garden and that’s it. No thermal insulation, no raising of the walls.
The garage will not be sold,
True! It is not sold and I don’t feel like selling it anymore to raise cash for the house in Sweden.
I’ll figure out how to integrate working on my business into my everyday routines.
False! I was caught up with the Sweden project so much, that I didn’t even think about this anymore.
I got answers to most of last week’s questions,
I still haven’t reached a decision about the house and thought many times that I’ve finally figured it out,
Putting the garage up for sale revealed that I could sell it for 50% more than what I bought it for. Obviously, it must be very valuable, so I decided to keep it, put a new roof on top (and just that), and rent it out.
The Tallinn Creative Incubator organized a workshop about how to market your business on social media. Brit from Milos.ee gave a comprehensive overview of the what and how of social media 🚀
I’ve got one person applying for being my assistant, we’re speaking on Thursday!
A house full of problems
👆 looks pretty idyllic, right?
This house is really cheap. Listed for around 40,000 EUR, by buying it you become the owner of 160m2 of living space and around 7500m2 of land (3/4 of a hectare).
The catch? It’s in rural Sweden (but this one is well-connected! 4 hours by train from Stockholm, 1 hour by airplane from Arlanda). And the roof needs fixing, ideally next year.
This seems like such a good deal, that it’s hard to pass on this one.
So let’s check last week’s questions:
Is now the right time to buy?
Maybe: good time for me? Not really, I can barely afford the house without taking a loan and feel a lot of resistance at the mere thought of organizing a trip to Sweden to inspect it.
Good time on the real estate market in Sweden? Based on what I’ve heard from brokers and watching hemnet.se for a couple of weeks: Yes
Is buying a house with a leaky roof a good idea?
Yes. A conservative estimate for fixing the roof is an additional 15,000 euros. That puts the whole house plus land at 55000 euros, which is still cheaper than an empty plot of land one-third the size in Aegviidu.
How will I finance this?
Cash. I can sell some stocks, pay myself dividends and buy the house in cash if I really have to.
Talking to LHV for another mortgage on my apartment has been frustrating: apparently, the paperwork for the gas heating in the apartment is still not in order and this is preventing LHV from making me a loan offer.
Will I buy it as a private individual or through my company?
Private individual. There are three reasons for this:
the real estate agent in Sweden has to prove that I’m not laundering money and that work is easier for him when I’m buying as a private individual,
a tax consultation with 1office.co yielded the conclusion that “upgrading” operations from a private individual to a company is super easy and renting out the place as a private individual is not hard (= not a lot of bureaucracy),
I basically don’t have access to credit in my company (all banks I’ve talked to for business loans only accept real estate as collateral, but definitely not my garage), but do have access to credit as a private individual (= another mortgage on the apartment)
How will the maintenance cost not eat me alive?
They won’t, I am just afraid. No matter which way I slice it if I really can’t find anybody to rent the place I can stomach the 500 EUR a month for heating and electricity, even if it hurts.
A quick search on Airbnb for a month-long stay reveals a decent tourism market in the region though, so it shouldn’t be too hard to break even with the house as it is right now:
The prices on the map are for a single room. A whole house goes for 2.5k a month 🤔
Can I actually handle a project like this?
Yes, but not right now. The place requires a lot of work (new roof, fixing bathrooms, repainting a few rooms, and changing the furniture) and that requires being present. Right now I can not afford to be present there and I don’t have anybody else who is readily available to go there.
Taking on this project right now means I don’t take the business incubator and Talking To Strangers seriously enough.
On the other hand, I can just buy it right now and start dealing with it properly in March.
So that’s a lot of thought that went into the project already.
I still don’t know whether I want to do this or not.
If you are interested in getting involved in this project in any way, let me know!
How I failed to make a decision
At this point, I’ve invested a good chunk of my free time over the last two weeks into figuring out what I want, talked to at least 10 people about this project, and actively tried to recruit people for this project (i.e. co-investors) and I still feel like I’m in the same spot.
Everything seemed crystal clear in the beginning: this is one of the dreams I had, and I can make it happen right now, technically. But as soon as things got serious (= I formally placed a bid on the place), I felt uncertainty and doubt.
Luckily, the little bit of coaching experience I have helped me at least to get myself unstuck. Coaching myself meant asking the right questions. Here are some of the questions that have helped me move forward:
Is now the right time in my life to do this?
How will I look back on both alternatives, buying or not buying, in half a year?
Can I undo this decision?
What would need to happen for me to change my mind?
The last question proved crucial today: trying to answer that one I realized that if the price was much lower, I wouldn’t hesitate anymore to buy, because I have enough savings left over to feel safe for the future.
Thus my plan for Monday: call the real estate agent and change my bid to 32,000 EUR, affirming that if this bid is accepted, I’ll come on Saturday and sign the deal.