Selling expensive house in Alexandria and buying less house in Ashburn (Winchester: mortgage, how much)

[Btingle76]

We currently live in a house in Alexandria that's a new build worth about 1.5M. My DH is considering starting his own business which will be slow going at first because of a non-compete clause of 2 years with his current business. I stay at home and would like to continue to stay at home with the kids- I may do contract work from home but it probably won't be more than 30k a year. So our option is to sell the house so we have a decent amount of money in the bank and buy a less expensive house. We have no idea how much he will earn, but his salary at his current work is 300-500 k a year. Has anyone done something like this? I'm trying to figure out how much cash we should have. We will probably move out to ashburn, buy a house for half as much and save more money for a year or two. He will still be making some money but we just can't depend on a set amount.

[Mnseca]

I think you are not getting any responses because most people don't own 1.5 million dollar homes or make 500K a year. We're at less than half that, but we've considered giving up our 500K house and moving cheaper. However, we've never done it because ultimately we know we don't want to downsize and all the costs of moving and selling will really eat into our profits. But if you can be happy on a lot less and won't lose too much in selling now, then I can't see why downsizing is a bad idea if you're anticipating a cash flow shortage.

[boyd888]

Depends on how much equity you have in the house. If you have $500K in the 1.5 mil home you could move to Ashburn and buy a new place practically with cash. If you only have $100K because you did 5% down or whatever your mortgage in Ashburn will need to be considered.

Personally I would just stay put and move if you find your income to be less that you feel like it needs to be. You don't say how old your kids are, but avoiding a school change could be a factor to consider as well.

[MF001]

What's the radius of your husband's non-compete clause? Often times such non-compete clauses are unenforceable, but prospective customers may balk nonetheless. Assuming that Ashburn is outside of his non-complete radius, who would be his competitors locally? If the market is already saturated, such a move might be futile.

Although homes are less expensive in Ashburn, they are not exactly as low cost as Winchester. Cost of living in Ashburn would not be drastically lower than in Alexandria either. Obviously cost is a big factor in why people move farther out, but child-friendliness also plays a role. Ashburn is a giant suburbia for families and has a different feel than Alexandria.

Much of the answer would also depend on your current lifestyle and whether you are willing to reduce the financial footprint drastically for the first few years while your husband presumably builds up his business.

[Btingle76]

We'd like to move there for the schools anyway. We have preschool age right now. We have about 500k in equity.

[newnewsmama]

Get a 700k house with 500k down. The mortgage will be very manageable. You can move up once your husband's business stabilizes. A luxurious house in Ashburn is still going to be above a million USD. But I don't think that's your priority when you are building the business.

[FCNova]

I guess everyone has a different definition of luxury. There are many houses in Ashburn in the 600s that are massive(4000-5000 sq feet) and fully updated. That's as much luxury as I'd ever want. Spending a million dollars way out there seems ridiculous to me.