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I just sold my big American dream house and I suggest you do the same if you can. Interest rates are low and lifestyle inflation is high. Actually, I am not sure whether or not lifestyle inflation is higher than what it was before. But, people are buying. It is a seller’s market. At least, in Dayton, Ohio, it is a seller’s market, and if it is in Dayton, it probably is in other places, too.

I bought this beautiful home when I got my first big girl job. I was able to get the mortgage based on my income alone, so when I got a divorce, I continued to stay in it, refinanced it to get the mortgage and deed transferred to just me. But later, I thought things over more and decided that the best decision was to sell it.

I bought the home (with a mortgage) for 275K USD and sold it last week for 319K USD. Stayed in it for two years. Made a little money. Not bad. The best thing is I am debt-free now. Literally, no debt. I am done making money for banks for a while.

Link to Zillow listing for this home

Why you should sell your big American dream house as soon as possible

Note that the profit margin on a large home is smaller because no one, that is, you, the first buyer NOR the person you are trying to sell to, that is, the next buyer, can buy it for that cheap. I couldn’t have bought this home for much less than 275K AND I can’t sell it for much more than 319K in this area. Houses do have to appraise if the buyer is taking out a loan to buy the home which they are more likely to do for bigger homes.

So… there is a pretty small margin here to play with. The profit calculation here is:

319K – 275K = 44K USD

But that’s not what you make. You have to pay the real estate agent. My agent charged 5% because I was a repeat customer. So then the math is:

319K – 275K – 16K = 28K USD

Now you are down to only 28K. After that, there will be some closing costs, too, another few thousand there. Plus, some repairs, in my case. So the math becomes more like:

319K – 275K – 16K – few – few = Around 20K USD

Thank heaven we are still in the green, but not everyone gets that lucky.

Don’t do a lot of upgrades to your big American dream house

Doing a lot of upgrades to the house could lead to a NET LOSS, so I would suggest that even if you did buy a large home, don’t customize it a whole lot and do a bunch of upgrades. Likely, it will NOT ADD VALUE and will further decrease your profit margin.

I did have to do a few repairs during my stay in this home which amounted to a few thousand dollars. Could be worse, but the home was built less than ten years ago. As a big, nice house gets older, though, you could be doing more repairs and increasing the chances of losing money. However, the risk of that is LESS for a newer home. Keep that in mind if you don’t want to lose money.

Also, remember that the larger the home and therefore, the costlier, fewer and fewer people can afford to buy it when you are ready to sell it. So maybe don’t wait till you are ready to sell it. Sell it when it is a good time to sell it, which is, NOW.

Another problem with larger homes is that there are simply more things that can go wrong, so again, more risk of losing money.

Why a smaller home is better

Now, it is a different story if you buy a smaller home. My first home was a smaller home and a new build, that is, it was built from scratch by a developer building lots of houses.

Link to Zillow listing for this home (I am the first buyer/seller)

Those pics in the listing are from MY home (with ex-husband) and it looks like the people we sold it to are still there.

Bought this above home for around 174K, sold for 235K. A new build means fewer or zero repairs. Plus, a smaller home means more people can afford it. The risk of losing money is a lot less. The cherry on top is that home was located in a growing area, that is, it became more hot and happening with time, therefore, its value went up. Its value is STILL going up if you notice from the Zillow listing. It is doing crazy well, I am so proud!

Location of the home

When choosing a home, definitely keep in mind the location of the home. Will this location become more in demand later on or less in demand? Like, is this a developing and fast-growing city or area right now? Then, chances are your house will grow in value. Plus, bets on the smaller homes are always good. They sell like hotcakes in a seller’s market.

Why are small homes so safe?

People need a place to live whether it is a bad economy or not. It is just that they will be more likely to buy a smaller and more affordable home when it is a bad economy and especially if that economy is affecting them directly. Even a large family might decide to cram into a small house when the going gets tough.

The summary of my advice is: invest in smaller homes in developing areas where the value of the home will go up without you doing anything much to the house. Like, do zero upgrades and watch that investment pay off.

My real estate investments have paid off so far within a few years. I had my first home for four years and the second home for only two years. So whoever tells you that you have to be in a house for longer is wrong.

Where I am going next

I have decided to downsize from my big American dream house and either rent where the rent makes sense or buy when I can actually afford the home and don’t have to take a loan out. Right now, I am not buying a home because it is not a buyer’s market. I am moving into a small home that my parents own in the area. I can cover its bills and take care of it while they are away. This arrangement makes the move easier but even if I were buying, it would not be another large home.

watch: “You should never buy a home by Grand Cardone. Homes were not built for people, homes were built for banks. The bank created that product to sell money. You can’t just loan people money. You need a product in between.”

https://www.tiktok.com/@academyofwealth/video/6889170906749488385?_d=secCgsIARCbDRgBIAIoARI%2BCjxpxiQdeuUmurbJRECjOxyCGCCtgYbEt5%2BIWAUH02Q%2BIIgzP5bdjQUgFWIDb2onarmtNTGAPVMT6Gzgk5QaAA%3D%3D&language=en&preview_pb=0&sec_user_id=MS4wLjABAAAA2AWmyPScj2N01k3Zfy4sfx3eRClYaeId2e6BQ1A6p3F4YOeo17KspfBpIX525d5A&share_app_name=musically&share_item_id=6889170906749488385&share_link_id=162f9362-087f-4774-90e4-fedd189ceef4&timestamp=1604064921&u_code=dc9h149g80ce8j&user_id=6824729884330427398&utm_campaign=client_share&utm_medium=android&utm_source=more&source=h5_m

Gotta strike when the iron is hot. Right NOW is a seller’s market and I am not in a rush to leave Dayton. I am still in the area. If I were desperate to sell the house because I was moving out of the area, then I might have buckled and listed it for less. But I had no real rush AND it was a seller’s market.

Position yourself with advantage and let no one fool you. You can make money from the real estate if you treat it like a business. Because that is what it is, a business. Big houses and material objects don’t bring happiness. They may, however, bring financial losses. You don’t have to take out a loan and buy a home but if you do, know that it is all business. It is a product that you might have to sell and people should hopefully want to buy.

Full video featuring Grant Cardone:

If you are interested in buying a small home during the pandemic, my parents did it all remotely and it worked out for their immediate needs as documented in my mom’s guest blog:

How to buy a house during the pandemic