F California - Just sold my house.

Key Concepts

Home Purchase and Sale: The narrative centers around the purchase and subsequent sale of a house in Los Angeles.
Nostalgia and Personal Connection: The house held significant personal meaning due to its location on the street where the narrator grew up.
Real Estate Investment: The purchase was initially viewed as a long-term investment, with expectations of property value appreciation.
YouTube Monetization: Success on YouTube played a role in enabling the narrator to afford the property.
Podcast Origins: The house served as the initial filming location for the "Iced Coffee Hour" podcast.
Home Renovation and Features: Details about the house's architecture, amenities (wood-burning fireplace, guest house), and past modifications (office to studio conversion) are provided.
Relocation to Las Vegas: A significant life change led to the narrator moving to Las Vegas, leaving the Los Angeles house vacant.
Investment vs. Practicality: The decision to sell was driven by the impracticality of maintaining a vacant property and the desire for a higher quality of life.
Gemini Credit Card Sponsorship: A significant portion of the transcript is dedicated to promoting the Gemini credit card, highlighting its Bitcoin rewards program.
Santa Monica Rent Control: The core reason for selling, rather than renting, is the restrictive and financially disadvantageous rent control laws in Santa Monica.
Property Value Appreciation and Sale Price: The house appreciated in value, and the sale price is discussed in relation to the purchase price and renovation costs.
Market Conditions: The softening real estate market and the need for aggressive pricing are mentioned.
Financial Strategy: The narrator outlines plans for the sale proceeds, including investment in tax-free municipal bonds, ETFs, and Bitcoin.
Peace of Mind: The overarching theme for selling is the pursuit of peace of mind and optimization of financial resources.

House Purchase and Personal Significance

The narrator recounts the emotional decision to sell their house in Los Angeles, which they initially purchased in February 2020 with the intention of never selling it. This purchase was deeply personal as the house was located on the same street where the narrator grew up. Their parents had previously rented a house on the same street for less than $1,500 per month, but were forced to move when the landlord sold it for $375,000, a price their parents couldn't afford. The narrator's ability to purchase a property on this street again was a significant achievement, made possible by savings, investments, and success on YouTube. They acquired the house for $2.1 million.

House Tour and Features

The house itself was a significant draw, particularly its privacy. It was not visible from the street and was surrounded by greenery, featuring a pathway with a table, chairs, and a fountain.

Interior Highlights:

Living Room: Arched ceilings, original hardwood floors, and an authentic wood-burning fireplace. The narrator notes that wood-burning fireplaces are no longer permitted in Los Angeles but are grandfathered in if existing.
Dining Area: This space was the original filming location for the "Iced Coffee Hour" podcast over five years prior.
Kitchen: Described as having a "beachy vibe" with turquoise accents and a dining nook.
Laundry Area: Included washer, dryer, and ample storage.
Office/Bedroom: This room was transformed into a studio in 2020, with drywalled windows, black paint, sound-deadening foam panels, and a drum set. It was later converted back into a bedroom, revealing significant natural light that was previously obscured.
Second Bedroom: This room receives excellent natural light due to the sun's path and was a spot where a family of squirrels would often play.
Primary Bedroom Suite: A spacious room with natural lighting, another wood-burning fireplace, and French doors leading to the backyard.
Primary Bathroom: Notably large, described as being the size of a bedroom, likely an addition from the 1990s. It features a tub, steam shower, and a separate toilet room.
Guest House: A separate structure with its own private entrance, featuring a full kitchen, living room, bathroom with a shower, and a bedroom with abundant natural light and an exterior door.

Decision to Relocate and Maintain Vacancy

Within six months of purchasing the Los Angeles house, the narrator and their family decided to move to Las Vegas. This move was motivated by the acquisition of a larger home, business expansion opportunities, a desire to live in an area with less traffic, and an overall improvement in quality of life. Consequently, the Los Angeles house remained vacant for an extended period. The narrator primarily held onto it as an investment, benefiting from its appreciation in value and using it as a temporary accommodation for visitors. However, the impracticality of frequent, long car trips (10 hours round trip) with pets to visit the vacant property became a deterrent. The narrator also highlights the common issues that arise when homes are left unoccupied for extended periods, such as dead plants, dry fountain pumps, and malfunctioning gates.

Sponsorship: Gemini Credit Card

The transcript includes a significant promotional segment for the Gemini credit card. The narrator uses this as a segue to discuss financial management and the concept of turning expenses into potential investments.

Key Features of Gemini Credit Card:

Bitcoin Rewards: Earns Bitcoin back on purchases.
Reward Tiers: Up to 4% back on transportation, 3% on dining, 2% on groceries, and 1% on all other purchases.
No Annual Fee.
Appreciation of Bitcoin Rewards: Rewards held in the card have appreciated by an average of 279%.
Alternative Cryptocurrencies: Option to earn rewards in over 50 other cryptocurrencies.
Card Colors: Available in black, silver, rose gold, Bitcoin orange, and XRP edition.
Sign-up Bonus: $200 worth of Bitcoin when spending $3,000 in the first 90 days.
Eligibility Check: No impact on credit score.
Call to Action: Sign up via a provided link or at gemini.com/gram.

Reasons for Selling vs. Renting in Santa Monica

Despite the financial benefits of renting out the property (walking distance to the beach, detached guest house, low mortgage rate of 2.875%), the narrator explains why they chose to sell rather than rent. The primary reason is the stringent Santa Monica rent control laws, which they deem "absurd" and financially detrimental.

Specific Rent Control Issues:

Limited Rent Increases: Despite market rent potentially exceeding $12,000 per month, the city of Santa Monica limits annual rent increases to $60 (approximately 0.5%). This is significantly lower than the annual increases in property taxes (3%), insurance (10%), repair/material costs (20%), and labor costs (50%).
Tenant's Permanent Right to Occupy: Once a tenant moves in, they gain a permanent right to use the property indefinitely. This prevents the owner from selling the property with standard notice periods, as it would be a violation of the "just cause eviction ordinance."
Relocation Fees for Owner Occupancy: If the narrator wished to move back into their own property as a primary residence, they would be required to pay the tenant a relocation fee of $38,250.
Restrictions on Re-Occupancy: If the narrator moves back in, they must offer the property back to the original tenants at their original price if they decide to move out within two years. Failure to do so could result in legal action.
Prohibition of Furnished Rentals: It is illegal in Santa Monica to rent out a furnished home, forcing the narrator to remove all expensive artwork and hand-built furniture to comply with regulations that favor tenants over homeowners.

The narrator concludes that these rules create a situation where the homeowner is at the mercy of the tenant, with little control over their own property. While acknowledging the intent behind rent control (preventing displacement), they argue that these rules backfire, discouraging property owners from renting and ironically increasing costs for tenants. This experience has led the narrator to sell off real estate in California in favor of "peace of mind."

Sale Details and Financial Strategy

The narrator purchased the house for $2.1 million in early 2020 and sold it for $2.7 million. To achieve this sale price, they invested approximately $30,000 in renovations and staging, addressing issues like overgrown landscaping, damaged hardwood floors, termite damage, and repainting. These improvements were crucial given the softening real estate market, where buyers have more leverage and fewer are actively looking.

The sale was facilitated by agents Jason Oppenheim and Shelton Wilder, who secured three offers above the asking price within days. The home has officially closed and is no longer owned by the narrator.

Financial Plans for Sale Proceeds:

Short-term: The narrator plans to place a significant portion of the money into tax-free municipal bonds, which they project will generate more income than renting out the property, with no work or risk involved.
Long-term: The remaining funds will be split between a world market ETF and a Bitcoin ETF for long-term investment.

Conclusion and Reflection

The sale of the house is described as "bittersweet." While the narrator enjoyed and loved the property, it no longer made financial or practical sense to keep it, especially considering its age (100 years old) and the ongoing repair needs. From a purely financial standpoint, the narrator acknowledges that investing in the S&P 500 would have been more lucrative than this real estate purchase. However, the house holds significant sentimental value as the birthplace of their podcast and the site of many cherished memories. The narrator leaves open the possibility of repurchasing property in the future if the opportunity arises.