Sunday, September 30, 2012, by

I bought a Hacker Home! Now I have to pay for it... any ideas?

If you haven't heard of my Homes for Hackers effort, check it out here.

Yesterday my wife and I decided to take the plunge and really get some skin in the game. We bought a house.

Not just any house. One in Hanover Heights, the first neighborhood in Kansas City to get Google Fiber. The idea being we will use this property solely for the Homes for Hackers program, letting startups stay there completely rent and utility-free, for 3 months at a time. This will also be the first home in the program to actually have the sacred fiber I've been promising.

I say "bought" but we haven't got it yet. It's under contract and we're going through the motions of securing financing. Hence the reason for this post.

Since this is not going to be an owner-occupied home, the loan has to be an investment loan. I knew that part. But I had no idea until AFTER I had signed all the legalese that investment loans must have a 20% downpayment. I was really hoping for 10.

Can we swing it? Yeeees... kind of. I'll have to pull out some money that I contributed to a Roth IRA years ago. (Before you ask, you can pull out contributions from Roth's with no penalties, you just can't withdraw investment earnings).

So here's my question: How can I raise $10k for the downpayment so I don't have to withdraw money from my retirement account? 

I don't need all of $10k... 5 would probably do it.

Here's some options I've come up with so far:
  • Take out a home equity loan.
  • Suck it up and withdraw from the Roth IRA.
  • Launch a Kickstarter or Neighbor.ly campaign to raise the money. Give away free t-shirts and free stays at the hacker home for various levels of donations. 
  • Borrow money from family. (unlikely)
  • Abandon the contract and forfeit the $1000 earnest deposit. 

Thoughts? Please submit any and all ideas here - I need help!

photo credit: EJP Photo via photopin cc

5 comments:

Marc Canter said...

As of now - Google won't let you run a company - via this connection. So any homebrew, DY solutions won't fly - at least as of today.

Kickstarter or IndieGoGo is another scenario - though they wouldn't accept our project, so not sure how "altruistic" they are. They seem focused on videogames and 3D printers.

Maybe get residents of the house to contribute to a startup - which pools its revs - and create a kind of "Hacker Job Pool". That shoudl be able to raise 410k pretty quickly.

mike said...

First, welcome to the neighborhood. Next, I don't think Google will be in the business of enforcement of the terms, though it would probably be helpful to set up some EC2 space or some such for public facing activities once it's all set up.

I don't know how big the house is, but you might be able to rent a room to a tolerant med or nursing student to make up some of the shortfall. Conversely, you could sell a share of the house to someone else, assuming you plan to capitalize on the investment in some way.

Scott Johnson said...

Where does Google define someone "running a company"? Obviously a bandwidth heavy porn site would stick out, but three people starting companies while using external hosting? They'd never know.

Andrew K Kirk said...

Did you get the down payment covered? I would suggest talking directly to investors/VCs to sponsor the cost. Perhaps, even Google Ventures. It's a great story that will get picked up.

This idea is incredible. Cheers to you!

Benjamin Barreth said...

Thanks for the idea Andrew! I liquidated the IRA to cover the down-payment. I'd still love for other investors/VCs to get involved in buying other houses in the area though. Please forward the story to anyone you think could help!

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