We’ve had some difficult decisions to make lately.
To raise the capital we need to develop Reverie, we were trying to refinance the Spanish Flat property on which Reverie Retreat is situated. After going through an inordinate number of hoops and getting right down to the wire, we were told by the lender that they won’t refinance it as a residential property since there is a business on it. It doesn’t meet Fannie Mae/Freddie Mac guidelines. I was hoping to pull out quite a chunk of money so we could get the initial development going, and then work on getting a small business loan. The interest rates on residential properties are still very low, and certainly lower on a refinance than they will be on a business loan. Probably something like 3 – 4% lower, which equates to a lot of money per month!
On top of that, one of my long-time clients has decided to hire someone full-time so that means a portion of our income will be going away. While part of me is relieved, as it will give me more time to focus on the development of Reverie, it is also scary. I’ve been vacillating as to whether I should try to get a new client or just take the financial hit and use the time to get Reverie up and running.
So, after a lot of soul-searching and discussion, we’ve decided to sell our house in Oakland. This is a very difficult decision for us. Our little house in Oakland has always been our safety net – if things didn’t work out with Reverie we could always move back to Oakland. And, it’s a big part of our retirement nest egg. Selling our house means that, more than likely, we won’t be able to move back to the Bay Area if things don’t work out with Reverie we won’t be able to afford to live there! And if we invest all the money from the sale of our house into Reverie and it doesn’t take off, then we have lost a big part of our retirement. And the final reason is one that may not seem that rational, but I am emotionally attached to that house. After decades of living in apartments where I couldn’t even paint the walls, Ramon and I were able to remodel that house into an adorable little place we could call our own. It was our first house together and it means a lot to me. I will be very sad to say goodbye to it.
But after I stop feeling sorry for myself, which is obviously quite ridiculous since we are fortunate to own a home in the Bay Area whose value has been appreciating like mad over the past few years, I feel relieved that we will have enough money for building out Reverie and hopefully a little bit left over for a rainy day. Once we actually made the decision to sell our house, my whole body felt lighter. So that’s when you know it’s the right decision. When you can feel it (or at least that’s how I know). I’m sure this will not be the last difficult decision we have to make.
For our friends in the Bay Area, stay tuned for an announcement of our farewell party for our Oakland house, sometime in November. We will be saying goodbye to our house and celebrating its 100 year birthday (1915 to 2015), in preparation for selling it sometime in early spring, 2016.