My Lucrative Mistake

Today I venture out to Amityville (hopefully without horror) to close on the sale of my family’s beach property in Bridgehampton. We purchased this “investor/user” home less than two years ago, and stretched ourselves way beyond our means to procure it. We also convinced ourselves (rather I convinced my wife since I’m the real estate “pro”… ha) to take an insanely risky mortgage product: a one month ARM… ouch!!!
I’m sure you haters out there are loving this story so far.
Our plan was to rent the property out for two or three months of each summer for the first few years until we could better afford it. That never happened and with two young children in private school. We ultimately decided the time was right to unload it. We had given it the old college try.
It’s not all bad news, though. In 20 months, the property has appreciated more than 30%. Now that is what I call a lucrative mistake! It is certainly debatable whether or not we should have purchased this home to begin with–and I don’t believe we could find anyone today who would think our one month ARM was a smart move–but, as mostly luck and a tiny bit of real estate savvy would have it, we are walking away in a very nice position.
We are very fortunate to have made this “mistake” on the tail end of the hottest real estate market in recorded history. If I were driving out to Long Island today to purchase an investment property, I don’t believe the ending of the story would be nearly as pleasant, unless I was able to hold onto the place for at least five years… and that wasn’t happening in this case. Phew!

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2 Responses to My Lucrative Mistake

  1. avatar anon says:

    Good for you! I’m just hoping the “heat” will hold in the high-end market for another 15 months. The private school thing is no small beans – it’s amazing to me how many people don’t factor this into their budget when they don’t live in a good school zone.

  2. Thanks. We have closed, or “settled” as much of the rest of the country call it. Our buyer is the perfect candidate for our house in that he sees the incredible potential of adding on to the home and he wants to use it for himself for the next several years. Kudos to him and his fiancee for making a stellar investment.

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