Rebuilding our New Old House – Want to Help?


Here’s the front view in “before” condition. Not bad, but wait’ll you see the back.

This past Friday, Mrs. Money Mustache and I walked downtown and purchased a bag of bulk cinnamon and a nice Midcentury Modern house. The ease with which these two errands could be combined reminded me how much I like this town.

As for the house, It’s the same one I mentioned earlier this month, but now we actually own it, and boy do we have some renovations in store for it.

The original plan was to rent it out for a year while we take our time planning things out and giving ourselves time to contemplate the implications of downsizing our living space by 1000 square feet.  But this time we decided to be a bit more adventurous and just go for it: full-power renovations, starting as soon as possible.

So what are we doing?

This house is a textbook example of  “good bones”. Or maybe, “nice legs, shame about the face*”.

The location is perfect. The placement of the house on the generous 80×80 foot lot is great too. Solid brick construction, graceful overhangs, spiffy window arrangement, a great wood-burning fireplace surrounded by bricks, and nice wood floors.

On the downside, the kitchen is Junk City, all the windows are single-pane and warped (requiring a prybar to close them), one bathroom is a tragicomic room obviously designed for a previous generation of much smaller humans. The ceilings are all only 7’8″ high, the attic insulation is not very good, and all the electrical and plumbing work needs to be redone.

The solution, of course, is to immediately tear off the entire roof (not just the shingles, but the roof), and rebuild it with a new slope. This will give us higher ceilings, great insulation, optimal light fixture placement, and room for a row of high South-facing windows that will give us most of our light and heat for free – forever.

Here is a a photo of the current South-facing side and a couple of quick concept sketchups of the new roofline and windows.


Here's the South face as it stands now. Obviously, removing all that television-related bullshit will be among the first tasks.

Here’s the South face as it stands now. Obviously, removing all that television-related bullshit will be among the first tasks.


View from SW corner showing South facing side of house with new roofline idea

Front view of house with new roofline

Front view of house with new roofline

After this most destructive part of the renovation, everything else should be pretty simple: tearing out a few unnecessary walls to open up the space, building a nice new ensuite bathroom for the master bedroom, and making a kitchen.

On the exterior, I have plans for one of those fancypants outdoor kitchens overlooking the public park (which we’ll be treating as a 1.3 acre extension to the back yard), a new fence and some gardens, and eventually a 20×20 accessory building that will serve as my workshop, office and the new crossfit gym that we open up to all the friends in the area, allowing everyone to avoid the $130 per month fees that have become popular these days.

The Financials of Home Downsizing

Although this project should bring benefits to many aspects of our lives, it’s hard to ignore the boost in the money department as well. Let’s check out the estimated benefits over my usual ten-year time horizon:

Base price of new house: $240,000
Estimated Renovation costs: $60,000 (this is on the very high end of possible costs)
Carrying costs during renovation (taxes, utilities, capital cost of tying up $240k for 9 months @3.5%): 6000

Total cost of house in finished condition: $306,000
Estimated value of house at this point: $400,000
Estimated proceeds of current house, after selling costs: $420,000

Amount of capital freed up by the move: ($420k-$306k) = $114,000
Annual property taxes saved from smaller house: $1,000

Estimated value of investing $114k @ 5% after inflation, plus adding $1k per year: $181,000

So 10 years from now, just as little MM graduates from high school, we’ll be about $181,000 wealthier than we would otherwise be if staying in the current house**. To put it one way, this move alone would pay for several complete university educations. Or another way, with a net benefit of over $18k per year, this move is paying for about 70% of our total family living expenses for the next 10 years.

Note: Yes, it is easy to take exception with any of my assumptions here, especially on how to account for the capital or appreciation. You are free to tweak the numbers as you like. For me, these represent my best back of the napkin calculations for the moment. Since the number comes out overwhelmingly positive no matter how I tweak it, it tells me the project is a “GO”.

Another interesting thing here, is that I’m using a portion of my own savings to do this project, and if you do the math they will be returning considerably higher than the 5-7%-after-inflation I sometimes quote around here for investment returns. And I couldn’t do this project if I hadn’t amassed the savings. Thus, although you can’t reliably beat the market by trading stocks, you can occasionally beat the stock market in your own life, by having savings that allow you to take advantage of unique opportunities.

Whether it is a strategic house remodel/downsizing, springing on an undervalued Toyota Prius on Craigslist then taking the time to get the most when selling off your Lincoln Navigator, or other tricks, a ‘stash has a way of multiplying itself.

So where do YOU come in?

I really need a Colorado-licensed Structural Engineer to help with my plans for the new roof. The people I have worked with in the past have become unreliable or too busy. But if we’re lucky and a reader of this blog happens to hold this license, we could have some great fun coming up with a design. Of course, you’d still get paid, and it’s up to you if we profile your role publicly on the blog or anonymously.
Update: I found one! We’re now jumping into the design stage, and I think I found the perfect guy for the job.

– Carpenters and assistants needed: Although I will be working full-time on the project, I would like to get to move-in condition as quickly as possible, which means giving up my old tradition of doing everything myself. If you are a framer, roofer, electrician, or willing to try your hand at a little demolition, get in touch!

– Construction boot camps: Occasionally, we’ll be doing some easy but fun things that are educational to help out with for the first time (replacing windows, building interior walls, laying out plumbing for a new bathroom, running new electrical circuits). If you live in the area and would like to help out in exchange for learning these new skills, let me know through the about->contact button at the top and we can organize a little club. This might sound a little Tom Sawyer style (hey! Want to paint my fence for me while I sit in the shade relaxing?), but it’s not quite like that, since as the “instructor” I’ll be just as busy.

The end result of this big construction project should be a house that is ready for the next 65 years of its life, with a bright and airy new design and a dramatically reduced level of energy consumption to go with it. Stay tuned for more updates as the project progresses.


* It’s an old 1970s English punk song from the Monks. No more emailed complaints about my alleged insensitivity to women, please.

**You could make further adjustments based on the projected resale value of each house at that point, but for now let’s consider them equal (the new house is in a more prestigious location which should be more valuable over time).


  • Chris Gammell September 23, 2013, 9:38 pm

    I’m intrigued by your downsizing and what this house ultimately looks like. I find myself in a “starter home” which actually has 200 sq ft on the house you just bought, yet I find myself longing for a little more space in the house. However, I do recognize your points about the main areas of the house mentioned in the last post as we have 4 bedrooms, 2 of which are effectively worthless. Our main room is 12×16.

    Anyway, what I’m getting at is I’m interested in seeing an internal floorplan as well, just to quantify your assertion in the last article. I’m sure we’ll see it eventually, just the look of the outside of the house had me even more curious.

    Good luck with the project. Looking forward to seeing how the community involvement works out as well!

    • Mr. Money Mustache September 23, 2013, 9:48 pm

      Yeah, good point – I definitely need to share the interior floorplan here too! It’s pretty good already, but once we get the final version nice in Sketchup I will add it to the post (or a future one).

      As for the size – yes, this place already feels plenty spacious inside (except for the low ceilings). Because once the unnecessary walls are chopped out, the “main room” will be pretty much the whole house except the bedrooms and bathrooms.

      So you end up with a nice wide-open multipurpose space, with lots of windows looking outside.. and little space saving features like built-in shelving and nooks.

      • Chris Gammell September 24, 2013, 9:42 am

        Yeah, I think that could do a lot for our house as well. My friend has a similar floor plan to ours and got a high tensile beam installed, replacing one of the walls separating their living room/kitchen and it did similar kinds of magic. I’m sure the headroom addition you’re planning will make it quite roomy and well lit. Next step after that is installing some solar panels on that nice new roof! (my buddy/cohost Dave just did that: http://www.youtube.com/watch?v=VGENVguQQmo

        As for Sketchup: I know it’s not a perfect CAD program (for example, it can’t do curved surfaces); but if you really get into it, you can make some beautiful renders of your house as well. Granted the payback on doing so won’t be as high as simply getting a scale model of the layout, but it’s really cool to see. It’s a tool called Maxwell Render: http://www.maxwellrender.com/index.php/maxwell_for_google_sketchup (lots of good examples on that page)

        • Executioner September 24, 2013, 10:55 am

          I see several other commenters have mentioned this already, but I was surprised that MMM didn’t have solar panels as part of his plan. Solar technology and incentives are at the point where it makes sense to include these as standard options with any new construction or remodel. You wouldn’t remodel a bathroom and leave out the toilet. You shouldn’t redo a roof and leave off the solar panels, either.

          • Peter H September 24, 2013, 1:04 pm

            Given the window setup he is going for, it means the entire roof becomes north-facing, and photovoltaic cells on a north facing roof are silly. He is using windows for solar heating rather than photovoltaics for solar electricity. With the big yard, he could just set up a frame with some PV cells on the ground, but that’s a fully separable project.

            • tallgirl1204 September 25, 2013, 10:39 am

              I’m wondering about trombe walls on that south side– requires some futzing about with roof-overhang angles and such, but boosts the passive heating power of the wall exponentially– are you considering them?

      • Jen in Boulder September 24, 2013, 9:44 am


        We live in a house (somewhat to your west) with an entirely open floor plan (except for bedrooms and bathrooms), and we’d suggest you consider the benefits of an “away room”, or a space that can be acoustically separated from the rest of the house. Sometimes when there are a pile of kids playing legos, and watching a movie in one end of the house it would be really nice for adults to have a conversation elsewhere, without the two activities conflicting. We host big Thanksgiving dinners here (which is great that we can do, because our space is so flexible), but when the kids get up and watch The Princess Bride, adult conversation and movie watching are in conflict… You may want to design in interior french doors or something, so they could be mostly open, but two conversations can happen at once!

        • Ishmael September 25, 2013, 6:17 am

          When the kids get up to go watch “The Princess Bride”, you mean you don’t go with them? It’s one of the best movies ever made. I’ve seen it at least 25 times myself.

          • Juli September 25, 2013, 11:01 am

            We seriously need a like button on here. I was just thinking the same thing — why would you let the kids watch the Princess Bride without you? I think I could quote pretty much the entire thing.

            • jlcollinsnh September 25, 2013, 11:20 am


          • Jen in Boulder September 26, 2013, 10:34 am

            Some adults choose to watch the movie, some adults continue on the wine and conversation. Alas, the point is that with the main part of the house entirely open, conversation and movie watching are in conflict…
            Actually, last year it was The Court Jester, to which we also lost several adults. The rest of us continued drinking from the flagon with the dragon.

      • Aaron LeBoeuf September 24, 2013, 12:35 pm


        I love the ideas for the new place and wish I was in the area to learn and lend a hand. I’ve had a similar idea to build a space for a workshop/cross-fit gym since I hate 140.00/Month in fees per person (My gf does it too!). I’ll definitely be taking notes on your project to see how it comes out. We will be looking to move and buy a place once she finishes school in the next few years. Haven’t decided on Utah or Colorado yet…currently in Florida (Any suggestions? ;-) )

        I can’t think of it off the top of my head, but is there a tax benefit to keeping the living space square footage to a minimum?

        I also wanted to say thanks for the great reading material! – The MMM family and friends are like heroes to me.

        • Mrs. PoP September 24, 2013, 4:30 pm

          Why leave FL? We find the tax setup here to be pretty great during the wealth accumulation phase. No state income tax and a generous homestead exemption on property tax for FT residents helps keep property taxes nice and reasonable as long as you’re not buying a mansion.

      • Maverick September 25, 2013, 8:09 pm

        “Wide-open multi-purpose space.” The ultimate of that, in my opinion, is a barn / timber frame style with all open space and 12″ exterior walls. No room partitions except for the bath. That’s including open space to the garage (vehicle of choice; car, motorcycle, and/or bike. I could eat breakfast at a table next to the historic motorcycle! I just couldn’t convince the wife of this. :)

        • MrsOz September 26, 2013, 3:12 pm

          @maverick. Oh man, would my husband looove that set up. In fact, he’d be hard pressed to make it through that scene without picking up a wrench and tinkering with his vintage bike in between bites of eggs & bacon. Wait a minute…honey, is this you!?

      • Mike October 16, 2013, 9:10 pm

        We also live in an MCM home built in 1957. Our entire neighborhood was recently listed on the National Historic Register. Since our home was unchanged, we were a ‘contributing property’ and, as such, qualified for almost a 50% tax break!
        My annual taxes on a 2150 sf MCM ranch are a little over $1400.
        Be careful about changing the look of that beast if there’s a chance it could be historic. You could blow your tax break like so many in our neighborhood did.

        • Mr. Money Mustache October 17, 2013, 9:12 am

          Thanks for the tip! Although your house has to be much older in my area to be on the historic register, I’d rather avoid it anyway – I don’t want to have to ask permission to change the appearance of my house and tax breaks aren’t a big enough reward to change that preference.

          But definitely a valid thing to look into for others who feel differently. Some friends in this area have saved $10k or more due to tax breaks on real historic house renovations.

    • Mrs. PoP September 24, 2013, 4:19 am

      Chris, design matters a LOT. Our house is 1,100 square feet, but people rarely believe that after seeing the place. We actually have a floorplan of it here – http://www.plantingourpennies.com/looking-for-a-home-dont-ignore-small-houses/ – and you can see that our house hits a lot of the notes that MMM is going for. High ceilings in a big main room, large windows including skylights on south-facing wall, large outdoor living area, though ours opens out onto a little lake instead of a park =)

      • jlcollinsnh September 24, 2013, 5:57 am

        That’s an awesome looking place, Mrs. PoP!

        Thanks for sharing.

        At 1100 it is just about the size of our new apartment. Of course we don’t have the outdoor space or the garage, but your living area alone looks more useable.

        Our place is designed with basically two master bedrooms, the thinking being I’d guess for young professionals sharing a space.

        While these spacious bedrooms are nice, we’d happily trade some of the space in at least one for a larger living area.

      • Matt Becker September 24, 2013, 7:26 am

        I love this point, and it’s not one you hear about often. Whenever we buy a place we’d love to find something that maximizes the size of the one big room. Our current apartment actually makes pretty good use of the space, but it isn’t as open as we’d like it to be and has a kind of long, narrow hallway that’s really just a waste. Square footage can definitely mean a lot of different things depending on how it’s laid out.

      • kr September 24, 2013, 8:55 am

        there’s a book called “the not too big house” which is basically about the same thing, and a push back against McMansions.

        • Jeff September 25, 2013, 7:11 am

          It’s the “Not So Big House” series by Sarah Susanka. Great ideas about living well in smaller spaces- not to just be in a smaller space, but to utilize all of your spaces in a more effective and smarter way.

      • Chris Gammell September 24, 2013, 9:47 am

        That’s a great post! Did your house come with that floorplan? Or did you renovate to get it like that?

        • Mrs PoP September 24, 2013, 10:30 am

          Thanks, Chris!

          The only change we made to the floor plan was taking one closet out of the smallest bedroom that Mr PoP uses as an office. The closet had been built in a way that blocked the doorway a bit and made the room seem tiny. Removing it really opened up the space.

          Other than that, though, the rest of the floorplan is how we found it – though we have done a decent amount of repairing and updating, so it’s significantly nicer now than it was when it was in foreclosure before we bought it. =)

      • Marcia September 24, 2013, 11:41 am

        Wow, this is amazing. Our house is 2BR/1BA and 1146 sf. It works fairly well for us but your layout is much better.

        We have a lot of wasted space. We have a hallway down the center that is pretty wide. Other houses in the neighborhood are better in that the bedrooms open off a very small hall off the living room.

        We also have a doorway in the boys’ room that has a big space behind it. At some point, the previous owner took out the two walk ins and replaced them with wall closets. This is fine in the “master” but in the boys room – we don’t have enough “wall space”. There are good windows, but there is now no windowless wall big enough for bunk beds.

        We have worked around the layout. We have bookshelves and cubbies that we put in the wide hallway, so we have storage now for shoes and toys and books there. Behind the door in the boys’ room we did the same (it was just the right size). And we are installing a closet in the hall.

        The only other thing I think we could do is rearrange the laundry room/hot water heater room. We don’t have a garage, so our 1146 sf total includes the laundry area.

      • Insourcelife September 25, 2013, 12:03 pm

        Really cool design, Mrs PoP and it does seem deceivingly big! When we are downsizing we will be looking for something similar. We spend a lot of time outdoors so having all this finished space outside is great and very efficient since there is no heating/cooling/taxes/vacuuming to worry about.

    • theFIREstarter September 25, 2013, 12:50 am

      A starter home with 4 bedrooms!? Ha ha you Americans do crack me up sometimes :)

      • SZQ September 25, 2013, 1:32 pm

        I agree! I’m always amazed when I’m watching HGTV (at the gym while on the treadmill/elliptical!!) and the Property Virgins buying their first home – they “have to have” this and that…………..granite counter tops, stainless steel appliances, so many bedrooms, etc. It’s a STARTER house, for crying out loud (they don’t even have kids yet!! Taking on so much debt (oftentimes they have a “budget” of $500K!!!) so young is just NUTS! I just shake my head and laugh at their ignorance! With the big house comes higher utility bills, higher insurance cost, higher maintenance, more room to furnish, etc. Just crazy!

        • Mrs EconoWiser September 26, 2013, 1:27 am

          Haha, that cracks me up sometimes as well. Here in The Netherlands most houses have one bathroom. Starter homes, family homes…doesn’t matter. We’ll have one toilet in the hallway on the ground floor and a bathroom on the first floor. Your standard Dutch home has three bedrooms. When the family expands we’ll use our attics to convert those into one or two extra bedrooms using dormers. The standard house measures about 120 square metres which equals about 1290 square feet. Oh, and hardly anybody has a pool (you’d only be able to use that twice a year anway). Our lots are also rather small, that’s why we need to build upwards. Our lot, for example, is only 160 square metres which equals 1722 square feet. That’s your typical Dutch home. It’s nowhere near as grand as some “starter homes” in the USA.

  • Flipteach September 23, 2013, 9:42 pm


    I live in Fort Collins and have some construction/home repair experience. I’d be interested in your schedule for Construction Boot Camp or just general carpentry assistance.

    • Russell September 25, 2013, 3:16 pm


      I also live in Fort Collins and am interested in the Construction Boot Camp. Do you (or anyone else up here) want to carpool?

  • Miss Growing Green September 23, 2013, 10:37 pm

    What is the projected timeline for renovations- you said as soon as possible, but how long do you estimate it will all take? We moved up to Montana from Ft. Collins, but may be relocating to Boulder-Longmont area next June-ish. With your go-getter attitude I’m sure you’ll be done by then? :)

    I have extensive DIY experience acquired through fixing up our primary residence and rental property- everything from plumbing to electrical to replacing windows, and adding on an addition.

    As a recent financially free “retiree” I should have some extra time on my hands to help out if the timeline permits.

  • Chris September 23, 2013, 10:39 pm

    This is going to be great to follow, I enjoy the hom Reno and education see of things. I also can’t wait to see how the “building bee” side of things go. hmmm, I wonder if I have some holiday coming up for a roadtrip down from Saskatchewan. Is winter in the Boulder area permissive of renovations? Not under several feet of snow are you?

    • Mr. Money Mustache September 24, 2013, 3:21 pm

      Nope, construction in the “winter” here is ideal.. often about 50F/10C and sunny which means nice days spent outside with t-shirt and jeans and the table saw. I’d rather build in January than July around here.

  • Diane C September 23, 2013, 11:08 pm

    Oh crap! That satelite dish made me laugh out loud. You closed today and it’s still on your roof? It must be a picture you took while it was in escrow.

    All kidding aside, it looks like a great project. Looking forward to the progress reports. DH is a painting contractor, but we just closed on a house and his “honey-do” list is very long. Maybe in the sping…

  • SMP September 23, 2013, 11:11 pm

    Nice house and very nice project.
    I would like to help you (and learn something about renovations).
    But I think the way trom Germany to Colorado is a bit too long…

  • Snor September 23, 2013, 11:30 pm

    You could consider adding a bit of slope to the roof towards the south side. Would enable you to add a row of solar panels. Also, if you let that side of the roof stick out a bit, your windows receive shade in summer when the sun is high and light in winter when the sun is low (the picture of the current south side of your new house illustrates the possibility nicely). Although I must admit that this last trick may work much better where I live (the Netherlands), since we’re much further up north.

    Anyway, good luck and have loads of fun rebuilding!

    • chc4444 September 25, 2013, 10:14 am

      Yes, I was thinking the same thing and I think the roofline would look better too. Just move the peak to the north about 6 feet or so and have a small, long roof with a southern exposure and possibly extend it as eaves for shading in the summer to keep the house cool. My sister has a house in Yakama, Washington with a similar climate to Boulder. It is earth bermed on the north with 10 foot ceilings so lots of light comes in from the south but they have a south facing eave that protects the inside from heat in the summer but lets sun in all winter. They have lived in it 25 years and heat the whole house with less then 1.5 cords of wood a year (they cut their wood for only a few dollars in the National Forest). So smart that they bought a lot on a south facing hill.

      • Brian Jones September 26, 2013, 3:31 pm

        I designed and built my own house 5 years ago and agree that a pitched roof is a better option than a shed roof. The interior spaces can feel uncomfortable. My sister lived in a house with a shed roof and it drove her nuts. Read “A Pattern Language” by Christopher Alexander.

        South facing windows are very desirable but the overhang isn’t all that critical because the sun is so high on the horizon around noon in summer. What’s really needed are trees to the east northeast and west northwest to block the early morning and late afternoon summer sun.

  • Done by Forty September 23, 2013, 11:58 pm

    Our homes seem to be from the same 1950’s era, with the quirky single paned bedroom windows that are long, narrow, and about six feet off the ground. We have a really low pitched roof as well (spray on) and have wondered if a redesign is in the cards.

    All the best with the renovation and in finding the people you need. I’m sure you will!

  • Linda September 24, 2013, 2:02 am

    You can see whoever built that house didn’t give much thought to value. The super flat roof with no insulation? What were they thinking? Bet the windows are drafty too, or maybe wedged close it forms a decent seal? ;)

    I’m sure the renovations will give it a great “face-lift”!

    “One bathroom is a tragicomic room obviously designed for a previous generation of much smaller humans” – hilarious, please post interior pictures, I’d love to see this :D

  • Anonymous September 24, 2013, 3:17 am

    I often forget that you’re in Colorado, until I see things like actually wanting to have windows that let in heat. Makes perfect sense in a cold climate. Here, the heat is the thing to keep out, not in.

  • Chris September 24, 2013, 4:48 am

    I’m looking forward to reading about your progress on the house. My wife and I bought a “good bones” house last year and are remodeling as we go. No plans to do anything as radical as a roof rebuild, but we had the same need to gut and redo the kitchen and bathrooms. I still can’t get over whoever built the ensuite which was 6’x7′ with a shower taking up 3’x3.5′ of it – so we had a nice wall slicing this tiny room in half. Oh yeah and a toilet and relatively large vanity jammed in too. Our closet was bigger! We’re mid-project on that one now.

    • Debbie M September 24, 2013, 8:12 am

      I’m also looking forward to future posts on this topic.

      I also have a good-bones house, but the whole thing sold for only $61,500. (Seventeen years ago.) So a 60K renovation seems pricy to me. I obviously need to get out of the past (my house is currently worth more like 170K).

      And my house could really use a few updates to bring it into the present: move the washer out of the kitchen into a separate laundry room (though I’ll still hang laundry to dry), room for two cars to park, maybe even under cover. And a few updates to better match our (hot and stormy) weather: move the fridge away from the west-facing windows, have longer eaves, get real shutters.

  • Adam September 24, 2013, 5:17 am

    Ill be moving to Colorado Springs in a week and would love to help out with the construction boot camp or some demolition. Let me know what I can do to help!

    • Mr. Money Mustache September 24, 2013, 9:31 am

      Thanks Adam! .. I should mention that I’d prefer to meet up with people who live within 10 miles of here (Colorado Springs is a 2-hour drive away!). I admire your dedication though :-)

  • GamingYourFinances September 24, 2013, 5:31 am

    I think I’m going to love this series of posts! Downsizing our home is something we’d like to do in the future. Our house isn’t huge at 1200sqft but it’s more than we need and very inefficient. There are much cheaper and more efficient bungalows in a nearby town that we’re eyeing for our switch into financial independence. Best part is that it’ll be closer to friends and family. Good luck on the renovations! We’ll be taking notes!

  • jlcollinsnh September 24, 2013, 5:45 am

    Congratulations on the new digs, and freeing up some of your capital at the same time.

    Looks/sounds perfect for the uber-handy Mr. MM. With your skills you’ll end up with a place custom designed for your needs and in perfect shape. It shouldn’t need anything then for decades.

    Leaving you to get bored and have to search for another. :)

    As for help, how about I come visit next spring and inspect the results? Preferably beer in hand over looking your back yard/public park…

    • Mike September 24, 2013, 10:46 am

      Jim, this is my favorite offer to help yet.

      • jlcollinsnh September 25, 2013, 10:44 am

        Well, we should all do what we can. ;)

  • Free Money Minute September 24, 2013, 5:50 am

    I like homes that have brick exteriors and a solid build to them. There are many possibilities to a place that has a solid foundation.

  • Elizabeth September 24, 2013, 6:08 am

    It’s probably not a good idea to take a week off of my masters to go play down in Colorado during the construction phase. What a shame!

  • EGiller September 24, 2013, 6:16 am

    The $60K rehab cost is presumably just for materials, and doesn’t include the cost of your time… so aren’t you ignoring the fact that you are going to be working hard for 9 months, a period of time in which if you performed the same construction services for pay you could receive ~$50K of compensation? So when you say ‘this move’ is generating $181K in wealth, maybe it’s better to say ‘this move plus my return to work for 9 months’ is generating $181K in wealth?

    Also your $6K holding cost calculation appears low, as doesn’t include the cost of construction insurance and $240K for 9 months @ 3.5% is already > $6K. It’s also maybe a little bit disingenuous to estimate holding costs at 3.5% but cost savings at ~8% (5% + inflation). I know there’s the whole short-term v. long-term interest rate discussion, but still something to consider.

    [Note that this comment is just to foster intellectual discussion, not criticism, as I am a fervent supporter of the MMM philosophy and lifestyle.]

    • Mr. Money Mustache September 24, 2013, 9:30 am

      Good challenge, E, but the $60k assumes I’d be paying myself at $50+ per hour for any work performed (I value my time pretty highly these days), plus paying market rates for all other help.

      Don’t need construction insurance.

      And you are right – return is debatable but in this case I put $200k of the purchase onto a line of credit at ~3% in order to leave other investments in place and productive. After selling the primary house, I’ll pay off that loan and invest the balance in index funds, lending club, etc.

      • ChrisCoyle September 24, 2013, 10:12 am

        I am having trouble reconciling the math. Isn’t the cost of capital $6,800 (240k * 3.5% * 0.75 (9 months). that does not include taxes and utilities. So how do you arrive at $6,000. What am I missing?

  • Donnie Law September 24, 2013, 6:25 am

    It would’ve been interesting to see the financial calculations if you decided to create a 1,000sq ft suite in the existing house and rent it out. Like what you did in Hawaii.

  • MoneyAhoy September 24, 2013, 6:30 am

    Looking forward to reading all about how the construction goes. Great job on downsizing and finding a deal that will make you $181K richer in the process.

    Sounds like the perfect location!!!

    Let’s take bets on how long it takes MMM to remove the satellite dish from the roof. I’m thinking 2 days tops :-)

  • Mrs. Blue Sky September 24, 2013, 6:33 am

    Maybe you will be the inspiration for a new trend, in which people leave their McMansions and downsize to more efficient spaces? (the “Habitat For Badassity” project?) Yesssss!!!!

    • Chris September 24, 2013, 9:14 pm


    • Sean September 25, 2013, 12:06 am

      “Habitat for badassity” Megalolz

  • Mr. 1500 September 24, 2013, 6:45 am

    Sounds awesome, count me in! I could also use some help with carpentry in Northern Colorado. Anyone, anyone?

  • Ross September 24, 2013, 6:54 am

    Have you thought about following some LEED for Homes standards? It probably wouldn’t be worth paying the registration/administrative fees to actually get the LEED plaque, but they’ve got some great stuff in there. Energy and water efficiency are the no brainers, but they also have some good guidelines on indoor air quality, rapidly renewable/recycled content materials, and ways to reduce storm water runoff. I bet you’re pretty well versed in these aspects of home construction, but it’d probably be worth hitting up your library for a copy of the LEED for Homes reference guide if you’ve got some time before the project begins.

  • lurker September 24, 2013, 7:08 am

    Tom Sawyer not Huck
    one point for the English major who wishes he lived close enough to learn how to do all that cool stuff on someone else’s house!

    have fun! looks like a blast of a project….did you mention solar panels?

    • Rose September 24, 2013, 2:54 pm

      I am one of those English majors!

    • Mr. Money Mustache September 24, 2013, 3:25 pm

      oops, thanks, changed reference to Tom Sawyer.

    • MoneyAhoy September 25, 2013, 10:17 am

      You English majors just couldn’t resist the correction :-)

  • Trouble September 24, 2013, 7:13 am

    What an excellent offer! I have looked locally in SFLA for such a similar type hobby type learning experience opportunity.

  • Buttercup September 24, 2013, 7:17 am

    These are the times I read your posts and it makes me sad. I do have a bit of construction experience, but I live on the east coast. I wish I could help, or take your construction bootcamp to brush up on my skills for my future home owning experience! (don’t own yet)

  • thrackle September 24, 2013, 7:20 am

    Hello MMM,

    I’d be happy to help. I don’t have much construction experience, but my father is a rancher so I spent many summers in my youth doing manual-type labor.

    A little about me: I took six months off from work this year to reset and come up with a new life plan. I had been working in the startup community and was tired of lottery ticket thinking. I am now saving 100% (!) of my salary and living off of my side-hustle contracting income. Since I’m saving so aggressively I plan to “retire” in a few years.

    After I’m “retired” I plan to invest my assets in multi-family housing. So getting some hand-on experience forcing appreciation in a property would be tremendous. Plus, it would be nice to build something tangible and to give back to this blog.

    Since I’m not a specialist in the areas you need, I suppose I could help with demo, participate in the bootcamp(s), or do anything else that comes up. Get in touch if you think I can be of service.

    Craig (thrackle)

  • Insourcelife September 24, 2013, 7:36 am

    New roof will do amazing things for this house. I wonder if you considered putting solar panels on it once finished because it looks custom designed for them.

    • Buttercup September 24, 2013, 7:41 am

      The actual roof is facing north. That would not be the direction you would want to face solar panels.
      Although MMM could angle them up a lot to face south….but they would have to be placed on some pretty serious mounts to do that.

    • Nate R September 24, 2013, 11:10 am

      I believe the roof is facing the wrong way to be ideal for solar panels.

  • Robin September 24, 2013, 7:47 am

    If the new windows face south, the solar panels will be facing north, on an angled roof, and so probably about 50% as efficient as south-facing ones.

    MMM: Why do you consider the capital cost of tying up the money at only 3.5%, when your investment return is 5%? Or is it all borrowed money?

  • Fredrik von Oberhausen September 24, 2013, 7:51 am

    What is the reason for that you decide not to keep the old house and rent it out? Are you able to invest the money with a higher return then what rental income would bring in your area?

    • Mr. Money Mustache September 24, 2013, 9:26 am

      Yes! .. the existing house is too costly to make a good rental (since rent value tends to cap out around $2500/month around here). It would be more efficient to sell it and buy either index funds or a multi-unit apartment building with the cash.

  • JohnDoeJersey September 24, 2013, 7:52 am

    Forgive me, as this is my first posting and I am sure it is going to draw a firestorm. I in no way intend this to be offensive to the ideals found in this blog, and actually I am a big fan (doing what i can to follow the way of the mustache). That being said, why does the increase in you wealth matter to you at this point, and why bother moving? You can’t possibly spend all of your money in your life time, nor would your son be able to spend it in his I would imagine (particularly if he goes up into a fine mustashian, as I’m certain he will). With that in mind, why increase your wealth? You obviously have no intention on increasing/expanding your lifestyle (which appears to be wonderful honestly). I don’t believe that you will give all of that money away any time soon either. The only thing I can think of is that you are choosing to improve your ‘efficiency’, but to what end? Just because you can? If that’s the case, where does it end? An apartment in a four unit multiplex would be more efficient still…and communal living more efficient still, etc., etc. Since you already had a house which suited your needs well (good location, solid layout, reasonable size [it wasn’t enormous, even if it was a bit larger than your new home]), and since you don’t need/have use for the money (as I stated above), then why move at all?

    • mike September 24, 2013, 9:03 am

      Mr Jersey, the way I look at it, is not only being more efficient, but continued waste just kills me.

      My wife and I live in a 4 bedroom house, high property taxes, a maid, and we’re both retired. Sure we can afford it easily, but to be honest, I can’t stand it. Pissing thousands down the drain every month and though MMM clearly doesn’t need the money, he is showing that just by making the move, he saves thousands of dollars.

      • JohnDoeJersey September 24, 2013, 10:15 am

        I can understand and appreciate that. The basic idea of waste becomes the focus as opposed to the monetary gain which is a consequence. Again, I meant no offense, and appreciate the perspective, as it differs from the way I initially saw it (money gained, as opposed to waste lost). The only follow on question to that then would be at what point does it stop? Is the efficiency of communal living sought as the end result, since even more money time and effort could be saved? I ask because I see his old house as reasonable, where as he obviously did not. There must always be a compromise somewhere between efficiency vs. comfort and convenience; I guess it just lies in a different place for us all. Thanks again for the reply.

      • Marcia September 24, 2013, 11:25 am

        at least you are keeping the maid employed

      • Kenoryn September 24, 2013, 12:17 pm

        Also don’t forget decreased resource consumption for the new house, from an environmental standpoint.

    • Heath September 24, 2013, 11:15 am

      First off, as long as you’re polite, you can ALWAYS feel free to ask questions and bring up concerns in this community. We won’t bite your head off, and will probably enjoy the added perspective :-)

      Secondly, MMM actually does contribute to charity. He has a whole post on it here: http://www.mrmoneymustache.com/2012/09/29/weekend-edition-the-life-you-can-save/

      As for the reason for his move, I believe he stated in his previous posts that it’s actually a quality of life upgrade. Yes, it’s more efficient, and yes it will make him money. But the house and its location are also more directly aligned with the MMM family’s wants (location, near park, size, etc). And AVOIDING something that makes money, just because you’re already financially independent, is just as ridiculous as it sounds.

      As for efficiency for efficiency’s sake: I don’t think that is a tenant of Mustachianism. Yes, be efficient. But do it for good reasons: simplification, environmental footprint, expense, health, etc. I think Mustachians are actually a little bit luxurious in some aspects of our lives (relationships, home, philanthropy, education), but we keep the rest as simple as possible (cars, clothing, status symbols, commutes, and a million other things). Or maybe that’s just my interpretation of Mustachianism :-)

      • JohnDoeJersey September 24, 2013, 1:08 pm

        Thank you very much for the warm welcome and I would like to say that yours is an excellent interpretation of mustachianism. It just seemed a bit strange to me that he would move when (in my perception) he didn’t really gain much except money by doing so (and less waste as indicated earlier by mike). If that were the case, then the argument could be made that he was simply doing it to gain money which would never be needed or used, and decrease waste slightly, both of which can be never ending treadmills (the same effect as working his old job for more years than necessary, or moving into a self-owned multiplex, then a commune, etc.). Your explanation makes perfect sense to me though, as I hadn’t realized that the primary reason for his move was to better align with his family’s needs/wants. All in all, I think as I stated before that reaching ‘comfort/efficiency balance’ is a personal thing. In this case, it seems like MMM will gain many things from the move; money being far from the primary driving force. Additionally, he will be more closely in line with his own ‘comfort/efficiency balance’ which is really the point in the end anyway. Thanks for the excellent insight.

        As a side note, I didn’t mean to suggest that MMM doesn’t contribute to charity (I am sure he contributes more than his fair share), but rather that the overage he makes will not all be donated, and instead it will contribute to his wealth (not a bad thing by any stretch, just unnecessary in his case).

        • Mr. Money Mustache September 24, 2013, 3:33 pm

          It sounds like you guys mostly figured out the motivation:
          1) I really like building things
          2) Smaller house = less resources consumed. Both for me, and if I’m lucky, setting an example for the many wealthy people who read this blog.
          3) Nicer houses here near core of city = less demand for far-flung suburb houses
          4) More wealth = more power for me to accomplish good things (the same reason I have this blog generating income).

          • JohnDoeJersey September 24, 2013, 5:45 pm

            Thanks very much for the reply! All of those reasons make good sense, and the other members in the forum were quite helpful in illustrating that. I wish you the best of luck with your new house, should be a lot of fun to work on (I just re-did a full bath, demo to the studs and back. Very good learning experience). If I lived in CO, I’d be there in a heart beat, but sadly I’m a bit to far away. I’m really looking forward to reading about it though, and from the sounds of it, there will be a lot of help from some very good folks here.

          • Concojones September 29, 2013, 3:26 am

            MMM, do future readers a favor and put that gem of a comment (i.e. your motivation for downsizing) in the blog post, in a very, very prominent spot! This is key to the entire post IMO.

            Also, I’d LOVE to hear some examples and future ideas of what you meant by “More wealth = more power for me to accomplish good things (the same reason I have this blog generating income).”

  • Johnny Moneyseed September 24, 2013, 7:57 am

    Me and Mrs. Moneyseed are in the same boat as you guys. We moved from a practically brand-new house to a Mid-60s fixer upper. It’s in great condition, but it doesn’t have the functionality that we need it to. We’ve been in a state of almost constant renovation since we moved into it 3 weeks ago.

    Our savings projection from the downsize is almost identical to yours. Plus, we have the added benefit of cutting our commute in half.

    Good luck with the renovation.

  • Michael L September 24, 2013, 8:06 am

    Have you looked at getting solar on the roof too? Licensed installer installed, will take about a decade to recoup cost, not sure what it would do at the home value, or how short the turnaround could be for someone like you who could install them themselves

    Here is one near you: http://www.namastesolar.com/, here is another if you want to look into it: http://www.solarcity.com/

    • Mr. Money Mustache September 24, 2013, 9:24 am

      I do love me some solar electricity.

      But here in Longmont, we have our own power company which does not yet accommodate grid-tied solar well (even if I got all the equipment and installation free, my monthly cost would actually rise to add solar power, because of fixed monthly costs added to your bill when you become a “producer”).

      As an efficient compromise, I’ve just been buying 100% wind-generated power (credits) for the last 15 years or so – and even though this costs more than the basic rate for coal power, my bills are still down around $20/month so it is not much of an issue.

      • Nihongo Dame Desu September 24, 2013, 11:37 am

        Have you considered only solar water heating?

      • Ben September 24, 2013, 12:50 pm

        Quick comment here about costs of grid-tied generation.

        I have a quibble with your observation that, “…our own power company does not yet accommodate grid-tied solar well.” I looked up Longmont’s rate schedule for residential generators, and I’d say that they’re actually ahead of the curve compared to most utilities in the U.S. Their structure of a relatively large fixed cost with a relatively small per kWh rate is more reflective of the utility cost structure, and is the direction in which electric rates will likely go in the coming years. The reality is that the current environment (in which most utilities offer net-metering with the old standard rate structure) represents a significant subsidized benefit to those installing generation. There are many reasons for this, but put simply the cost to generate electricity is only a small chunk of the total cost to connect a home to the grid.

        Please don’t misunderstand me – I love solar and I believe it represents an important part of our energy future – but the big money benefits of installing solar at home is a temporary opportunity for most and one that has apparently already passed in Longmont.

      • Kenoryn September 24, 2013, 1:04 pm

        You could do a Trombe wall on that south side too, though not sure if your heating needs in Colorado would be enough to warrant it.

      • DIY Rooftop Solar September 28, 2013, 9:40 pm

        That’s really too bad that the fixed utility costs outweigh your savings. Bummer! I was hoping for a MMM Solar Install Challenge in the future!

  • Adam September 24, 2013, 8:12 am

    I live in Westminster and work in Boulder, I am a tall dude that can lift a lot, I would be interested in your bootcamps.

  • Mark September 24, 2013, 8:20 am

    I live in Longmont and would love the chance to learn some renovation skills! Count me in.

  • mike September 24, 2013, 8:58 am

    Really open it up and put on a gambrel roof.

    Love your ideas MMM, and I’m super excited for you, though I know family will have trying time with all the construction.

    If I was in your area, I’d definitely be there volunteering.

  • Andy September 24, 2013, 9:05 am

    Great project and post. Can’t wait for more posts in this vain. I’ll be interested to see your thoughts or the decisions you make if/when you have to select various materials or fixtures, floorings, tiles, cabinets, anything like that, and how you do your cost/benefit analysis when deciding how much to spend or what things are worthy of investment, when to go more upscale versus more generic, how you find deals, etc.

  • FI Pilgrim September 24, 2013, 9:12 am

    I love the fact that since you’re not “working for money” anymore, you have time and energy for projects like this. It will be great for your son to have that experience with you as well.

  • Christine September 24, 2013, 9:32 am

    I would so take you up for the novice work if I lived in the area!! Very exciting and you obviously have amazing skills to pull this off :)

  • retirebyforty September 24, 2013, 9:44 am

    I want to do something like that at some point. We like where we live for now though and the missus doesn’t want to move.
    Have fun!

  • Jana Miller September 24, 2013, 9:48 am

    I love that you don’t just give advice but you actually live it. We are helping out son get started in his first place. He’s 19 years old and it’s a studio with 450 square feet. He has already saved 25,000 by staying at home and going to a state school instead of a pricey private college.

    Looking forward to following along!

  • Holly September 24, 2013, 9:48 am

    My husband took a new job recently and we’re selling our home and moving. We’ve looked at big houses, small houses, expensive houses, and cheap houses. At this point, we’re leaning toward something smaller. I would like a larger home, in theory, but what it boils down to is that I don’t really want to pay for it. I’m also turned off by high property taxes because they most likely will go up even further in the future.

    Good luck with your renovation!

    • Melissa September 24, 2013, 8:13 pm

      Whenever I look longingly at the beautiful big houses, I then ask myself, “Who’s going to clean all that? And who’s going to climb all over the place to clean those windows!” :-) Then I shake it off and love my little house.

      • Ishmael September 25, 2013, 6:26 am

        And sit down and do a bit of math, and they’ll turn you off even more: increased property taxes, heating, energy, ongoing maintenance (i.e. replacing shingle/roofing).

        • Holly September 25, 2013, 7:55 am

          You’re right….all of those things.

          Plus, most of the nicer homes we’ve looked at belong to associations with fees ranging from $300-$700 per year. A few of them include the use of a neighborhood pool…but would we really swim enough to justify that cost? I doubt it.

  • Robert Birnie September 24, 2013, 10:02 am

    When you do your 10 year calculations do you count the appreciation value of the house? Wouldn’t the savings from going to a smaller home be discounted by appreciation value that you’re no realizing on the old house?

    Although it sounds like the new house is in a better neighborhood so it’ll probably appreciate faster anyways, especially with renovations.

  • chris September 24, 2013, 10:05 am

    MMM, best of luck with this new project. You may already be thinking of these measures, but I didn’t see them listed, so I thought I’d put out a few unsolicited suggestions. Since you’re taking off the roof and the house will unoccupied, why not look at the insulation and air sealing in the floor (is it slab on grade?) and the walls in addition to the attic. And you probably already know this, but air sealing is critical for insulation to work properly. Insulation is to prevent heat loss through conduction, but if your building assembly isn’t airtight, you just get heat loss through convection instead.

    You can have a test done to help you determine the tightness of your building envelope. It’s called a blower door test and it gives you both an idea of how many leaks there are and where they are. Having an airtight house will make the passive heating from the south-facing glazing you’ve shown in your sketchup model all the more effective. But if you get the house too tight, you may need to add continuous mechanical ventilation to ensure that you’re getting enough fresh air. But that’s a good sign.

    Finally, if you’re feeling really hardcore nerdy, you can install a sketchup plug-in for a free building energy modeling tool called EnergyPlus that lets you compare the energy performance of different design scenarios, taking into account your location. Sorry if this is redundant, but hope it’s useful.

  • Pretired Nick September 24, 2013, 10:07 am

    You’re right about one thing: the bones look excellent!

    Since you’re going to be drastically altering the roof, have you considered including solar into your plans? You may or may not need to alter the angles a bit, but this would be the time to consider it. Free power for life doesn’t sound too bad!

    We’re also looking at downsizing, but probably in 2-3 more years at least. Buying too much house is one of my bigger blunders…

  • Kari S September 24, 2013, 10:32 am

    As a fan of both early 1900s and mid-century styles, I’m curious if you’ll be keeping the house true to its roots with the renovations. We built a new home two years ago, but if we ever have the desire to move again, I would like to find an ugly duckling older home and make it energy efficient and livable, but keep the style of its era.

  • Knud Hermansen September 24, 2013, 10:38 am

    I live down in the Martin Acres area of Boulder and would be willing to help. While I am not a licensed engineer, I am working toward my PE in HVAC and thus have a basic understanding of electrical circuits and wiring. I have also helped out with a few Habitat for Humanity projects and managed not to do too much damage. Good luck on the remodeling!

  • C. Green September 24, 2013, 10:56 am


    I’m actually a regular MMM reader who just purchased a home in Longmont, and works in Boulder as a Structural Engineer. Believe it or not, we almost looked at the same house because we could see the potential (it was a little too far North for our liking). Although I am not licensed yet (I test in April), the roof is something that I could design and detail through the shelter of the firm that I work for. We have lots of experience in residential design and existing retrofits. The feasibility of the roof design is dependent on a few things like the existing bearing walls & foundation, but is definitely doable. Contact me if you’re interested.

  • Kam Bow September 24, 2013, 11:13 am

    I’m in Denver, and would be happy to help out. Not a lot of experience, but hopefully a lack of litigiousness and a willingness to sign waivers will make up for it!

  • AnnW September 24, 2013, 11:18 am

    I would love to come and help you if you are still working in February. Have you thought about changing the new roof line in the front to meet the left side roof line better? Like making a gable, either false or real? If you are taking the whole roof off, it shouldn’t be too difficult to add on. Or two, so that they match. With a small porch in between. How about some solar estimates and also a geo thermal estimate on this project. Are you really allowed to have an auxiliary building in the back? What about a garage? Ann

  • Marcia September 24, 2013, 11:19 am

    I LOVE the new roofline. Very nice.

    I’ve thought about adding on to our house. It’s 1146 sf – I’ve thought about trying to add on to the front, or enclosing the front porch to get a little extra space. Probably won’t.


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