A Week At the Lake House

The Lake House has been appropriately broken in by our family group. It was chaotic.

The house is designed for about four people, but can hold six. Eight is too much and that’s what we attempted to do on our first week at the house.

Linda and I decided we needed to spend a week at the house by ourselves – a’ la carte. Not sure what we expected to find out. That’s why we did it.

For me it was an easy week of checking off projects, fishing and relaxing. For Linda, it was a struggle. We came out OK, but the last couple days got testy. Our disagreements grew more frequent, but they never reached the level of a full-out argument.

Right off the bat I had a successful transfer of various equipment from the Bay Area to Almanor. The lawn mower, unused at home, made a quick adjustment to the high country.

On work-day one, Tuesday, we got the heater and AC checked out. Everything appeared to be in order, so that was a big relief. We also verified that the thermostat has a WiFi interface that will work nicely once we get our system implemented.

The wooden swing which had sat in our side yard, at home for several years, fit in nicely to the lake front and we enjoyed the up close view of the lake while sitting in the shade of one of our big yellow pines.

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A group of deer passed through during the early hours and stopped next to the new swing as if to say, “What is this?”

On day two, Wednesday, a major milestone was accomplished when we got our internet connection with Digital Path, a company out of Chico. So far, we are impressed with their service. Now we plan to hook up a couple Aps that will allow us to monitor the situation while we’re away – including the aforementioned thermostat.

On day three, Thursday, I managed to hit the creek and catch my first trout of the trip, a fourteen-inch brown. Only one, but that was a start.

In the afternoon, I spent time surveying a vacant lot in Hamilton Branch – property owned by my father. With the help of one of the neighbors, one corner was clearly extablished.  That’s progress.

The lot needs to be cleared to meet the county fire standards. Since it’s nearly an acre in size and is overgrown with brush, the project will take a while.

On day four,  Friday, I hit the creek early again and broke off a nice rainbow.

I had spent most of my time fishing from one location and there were a lot of fish in front of me. I cast to fish much of the time, but after a while, I began to cast randomly as the fish I could see seemed to be impossible to catch.

One fish in particular spent most of its time right in front of me and it was quite large. I can’t say how many times I thought about that fish, but it never moved. Eventually, I forgot about it.

Then one of my random casts landed in front of the big fish. I was amazed when it suddenly turned and swallowed my fly. My strike indicator went down an I pulled up in disbelief. The big rainbow was on.

This turned out to be the largest trout of the year, a nice rainbow. The fish pealed out a bunch of line, which ended up working in my favor. The big trout tired itself out running up and down the creek and never threatened to break my 5X tippet, which was vulnerable.

In the end, I pulled the fish up against the shore and a friendly gentleman held it there so I could get a photo before releasing the fish.

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This was definitely the fish of the year. Not sure exactly how big he was, but he was definitely big enough.

After catching the best fish of the summer, I packed up and headed home not needing to fish any more that day.

At home, I was hoping to resolve some WiFi issues with my handyman.

The WiFi installation was painless. Not only that, but we laid the groundwork for installation of other Aps that will make living in two homes easier. It was a good day.

Later, I got in a fairly long hike, burning up some calories.

Saturday morning I returned to the creek, looking for another fish, but the best I could do was a small rainbow. In general, fishing was slow the entire trip, except for one special moment.

Another trip to the lot resulted in some valuable discussions with the neighbors and I became satisfied that I knew all the corner locations. This accomplished a major goal for the trip.

During my drive home, I noticed smoke on the horizon to the west of Chester – looked like an uncontrolled fire. After arriving home, Linda and I heard airplanes overhead. Four Cal Fire planes were circling overhead in preparation for picking up water to fight the fire.

I photographed them in action.

Sunday fishing was enjoyable, but unremarkable, except that there were hundreds of trout in the estuary – few of them doing anything. I didn’t see a single fish caught.

On Sunday afternoon, I decided to pull our dock up away from the lake where it will remain until spring. I hooked the dock up to my truck using 100 feet of cable. After failing on my first attempt, I revised the system a bit and managed to pull the dock out like a train. It was a sight to see.

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With the lake level dropping rapidly, I concluded that it was time to pull the dock for this season.

Sunday evening Linda and I enjoyed a nice dinner out at Plumas Pines. We were ready to go home. (I could have stayed.)

It was a fruitful and enjoyable week. The Lake House is a success.

Looks like I won’t be back until November when the Devil’s Garden and Bass Hill muzzleloader seasons open. That should be interesting.

 

 

An Amazing Summer

Fall has arrived and there’s a lot to look forward to, but this past summer has been an exciting ride.

From the start, I knew that the summer held two fishing trips to Alaska – my first two Alaska fishing trips ever.

What I didn’t know is that I’d also have leg surgery and then purchase a house on Lake Almanor, a dream I’ve had for many years. I wasn’t sure I’d ever get Linda to go along with the idea.

The fishing trips were great and I’m almost completely healed from surgery. I’m grateful for my good fortune. The house at Almanor is the most exciting event of all.

It was mid-June when Linda and I decided to look at lake-front properties on Almanor. Our agent showed us just about every house on the lake under $1.3 million dollars. I concluded that in order to afford a home, it would have to be under a million.

We had most of that in the bank, some anticipated income and a home equity line of credit of our primary residence. We made a $950,000 offer on a house listed for $1,050,000 and they countered at $975,000. We accepted the counter and began inspections.

The house was nice, but had its flaws and as the inspections continued we began to have our doubts. Not only was the house in poor condition, but a western exposure and a steep incline to the water discouraged Linda.

We decided to exercise our right to withdraw.

Another house came on the market. The price was over our limit, but I told Linda we could figure out how to afford it. I knew in my guts that the house would sell quickly and I didn’t want to experience the pain of failing to make a solid offer and losing out on this rare find. After much debate, we made an offer and it was accepted.

I was ecstatic about our luck in finding this house. We could afford to buy it, but could we afford to own it? We closed escrow on about August 1. After consulting with my accountant and attorney, I decided to consider several options for owning the property and holding title.

My accountant believed that I should make the house a rental and take advantage of the two weeks per year that I could stay in the house. This option would be best if we wanted to get the most out of our money. But, I wanted to be able to stay in the house a couple months out of the year – not two weeks.

My attorney suggested creating an LLC, but he wasn’t sure about our ability to make the house a rental and also gain more time on site.  An LLC could be a  partnership, but the house would still end up being a rental – limiting personal use.

There was a posible Trust situation that would allow Linda and I to use the property as much as we wanted, but we would have to committ the property for our life time. I decided not to look further into that idea.

Another option would be to find a partner, get some of our money back and have somebody who would share in the expenses. I’ve been in many partnerships, but never on a vacation home. Ultimately, Linda and I have chosen the partnership route. We haven’t closed the deal, but it looks like we have found our partner. I’m happy with this plan and financially it is definitely a good option. We are in the process of creating a parthership agreement that defines how the property will be shared.

The view from the Lake House

This panoramic shot shows the back of the house, the deck where we spend time, the back lawn and the key feature – Lake Almanor.

The Search Continues – Vacation Home part 2

If you followed my first couple vacation home posts, you may have got the idea that I was cooling off on the first choice. On the last week of June, I bailed out of the first Lake Almanor home. Too many issues for me. Dry rot, water leaks, bats, ants, wood pecker holes, septic problems….you name it.

Amazingly, a second home came on the market at the right time. I immediately contacted my agent and viewed the home. Although Linda had not seen the home, we agreed to make an offer. We are now two weeks into the purchase and things are looking pretty good.

It’s in much better shape than the first home, has a much better exposure and a much water beach/water access.

Yes it also cost more, but we’re moving forward. I’m glad we decided to reverse course on the first home and I’m hoping that this next contract will work out. Sometimes you have to fail in order to succeed.

Addition by subtraction.

 

Vacation Home Purchase, Septic Tank

During 37 years of selling homes, I don’t recall selling a home with a septic system. I did sell some rural property – the septic system was never a big issue.

Why not? I think it was not a major consideration in the purchase. The property itself was always a much larger concern related to the size of the investment.

That’s not so true on a vacation home, where the parcel size is relatively small and the septic is a major capital expense. It’s also a big project if it needs to be replaced.

In most rural property purchases, the agencies are not watching closely. That’s not true if you purchase a lake-front home where county agencies are very concerned about pollution of the lake.

That’s why I’m being fussy about the septic tank at my prospective vacation home at Lake Almanor in Plumas County.

The seller’s agent suggested that the seller pay for the septic inspection. That surprised me. Then the inspector checked a box saying it was “unknown” if there are any records about the tank on file with Plumas County. This is a big red flag. Unknown ?@#%&*

Looks like there will be more than one inspector.

The Search – Vacation Home

For years I’ve wanted to own a second home at Lake Almanor in Northern California. As a kid, my brother and I experienced the outdoors while staying with my grandparents during summers.

After they passed away, my folks decided it was too difficult to manage a home several hours away and sold my the home they inherited, which was located on the East Shore of Lake Almanor. At the time I didn’t think about it much.

Still young and able to camp and fish in the Almanor area, I didn’t need a house to slow me down. Later on marriage came along and the needs of my wife entered into the picture. She was and is not a camper and needed a house when we visited Almanor – we rented.

Renting is OK, but it’s different from owning and I’ve always preferred to be an owner. The problem? Owning a second home doesn’t create the same return as other real estate investments. Hence, we put off purchasing while investing in other real estate.

On the other hand, a good real estate investment is a good way to retain capital. That conclusion can reasonably be reached with the assumption that you are not forced to sell.

About five years ago Linda and I began to seriously search for a solution. We looked at many homes, but nothing really seemed to fit – until we checked out a house on the Lake Almanor West golf course.

It was a nice home with a good exposure, big trees and a nice view of the open space of the golf course. We made an offer. The asking price was $560,000. We thought the right price was $425,000 based upon our understanding of the market. The offer didn’t fly so we raised our offer to $450,000. Still no interest from the seller.

We let go of it and moved on. We began to remodel our home in Livermore and that ate up our money and energy. We didn’t get serious again until this spring. Ironically the same house came on the market. It had not sold.

We tried again, this time offering $475,000. The seller was still stuck on $560,000, but indications were that $535,000 might work. We passed.

We recently took a week’s vacation and revisited the entire program. This time we had saved up additional funds and had more options. After a few days we found a home I really liked and Linda could live with. It’s in escrow.

We concluded that nothing short of a lake-front home would motivate us to purchase. I had money in the bank that I’d been planning to invest in stocks, but I was having a hard time making that decision. As a real estate guy, stocks were not working for me.

So, our money market funds will be used to purchase a home at Lake Almanor West. It will cost just under a million dollars. The property will rent out for about $3,500 per week during the height of the summer season. Taxes will be about $11,000 per year. Insurance and HOA dues will be about $3,000 per year. Looks like we’ll need to rent it out for about five or six weeks each summer to break even.

We’ll come up with a management plan that, at least in theory, allows us to pay the major expenses and still have use of the property. The home will not require major work and it will probably meet our needs as is.

I’m fired up. Here’s a photo from the street. Not very good, but all I have for now.

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View from the street. The house is about 200 feet from the front property line. Nice setback.

There will be more later. I’ll also post some info  related to escrow. We’re lining up septic, home and termite inspections. Most of the deferred maintenance is related to sun damage. At Almanor’s  4,500 foot elevation, the sun really beats wood up. There will be more later.

I’ll also post some info  related to escrow as things move along. It may be helpful.