We just had a new born and are thinking about moving to a better school district. Houses there are expensive generally 800k+. We can’t afford that right now but might be able to in couple years (assuming they don’t appreciate too much. But since We still have couple years before we have to move, we are thinking about if we should buy some land/a buildable lot in a good school district now and build for 300-400k or wait for couple years to buy a house risking might not able to afford it then.

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Are you currently living in a starter home? If so, another possibility is to continue to build equity and then move when push comes to shove

But you’re on the right track. Investigate all of those methods because it might take you several years to find the perfect solution. I went through the exact same thing you did.

I ended up using a construction loan to buy a very outdated place and renovated it to basically a new build. This meant it was interest only so I was able to carry both mortgages while they renovated. You only need to renovate the kitchen and master, then do floors and paint and you’re good

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What was your construction loan term?

Ideally, people like to move to a school district when their kids start kindergarten, which is around 5 yrs away for you. I would suggest that you keep on savings, and your income will likely increase as well. By the time your child is ready for kindergarten, you will have a lot more options. There is no rush.

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Deloitte has a good point, a construction loan is a good option on an older house that needs renno. 203k rehab is an FHA option but for low down payment situations.

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I’m sure you’ve discussed this, but have you considered private school? I’m not joking. I know people who moved to a “better” school district, then it all was changed anyway. Funnily enough, I know people who brag about blue great their school district is then send their kids to private school anyway. I don’t have children and never will (by choice) but I think a calculation about moving versus the cost of private school should be at least something to think about.

We have considered. It just happens that good private school is also in that party of town ( not surprisingly). So we will either still have to move or we have to drive 30 minutes one way each day.

Buying land thinking you will build will mean you'll need to get a land loan (typically not favorable rate and short terms) which you'll have to pay for land plus pay for the house you live in. In terms of cash flow it's a bad choice. Also, building always costs more than you think, for one you aren't a contractor so any estimates you come up with are rose colored glasses. Save, save, save...then buy if it's really what you want.

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