We chose Jacob as the next owner. We had several offers from cash buyers at higher dollar figures. One wanted to use the building to store his Harley collection and one wanted to convert it to an auto repair facility. The Harley owner is a personal friend and laments not buying the station weekly. The building was never offered to the community at large, never listed with any real estate company and sold to Jacob within a month of offering it to a few friends. As for the price, go buy one, if you can find one in an urban setting. There have only been 6 fire stations sold by the city of Wichita in decades. My daughter and I bought two. We lived in the only two that remain occupied as residences, all the rest have been converted to commercial use. My daughter has since also sold her building and moved on to a more conventional home, but not too conventional. So Jacob is unique, 2 families out of 350,000 population, that live in a fire station, put a price on that! And the only one with a fire truck, 1 in 350,000, even better. Less than 100 in the entire USA. My wife and I have toured stations all over the country, find a nicer building for less, not a prayer. Part of the issue with Jacob’s low appraisal was finding a comparable for appraisal purposes, there weren’t and aren’t any. Sale price per square foot was less than $70. Build a true brick house for twice that, if you can find someone willing to do it. Find an existing structure that contains no structural wood, in six years I found two concrete framing 2X4′s that got stuck when the concrete was poured, both less than 4 foot long, it will never happen.

Jacob’s building is too unique to begin to describe. There are features that he hasn’t even discovered yet, the 6 years that we owned the building was like Christmas, each day brought a new discovery. How many reader control their own traffic light? Jacob does, or could. How many readers have their own secret tunnels, Jacob does. How many can host a party of 250, inside, with a swimming pool, Jacob can.

Jacob, you done good, we are glad that you bought the building, we are glad that you are enjoying it and glad that it went to somebody that appreciates the uniqueness. The positive comments are dead on, the negative comments are ill-informed.

Steve and Glenda

A very interesting home – congratulations.

Do you have a sketch or drawing of the layout and how you use each room?

Any words of caution or encouragement for someone considering a home that was originally conceived with another use in mind?

Thanks for your story.

And that last fact amazed me. The idea that everyone in the US defaults to using creditcards, aka loaned money, is very strange. Loaned money is expensive money…

This is one of the most interesting stories JD or his staff has had recently. A lot better than reading about how to hire a maid I guess those of us living in “flyover country” are just soooo boring.

@Jacob – have you tried renting out the fire truck for parties to make extra money? I bet some parents would love that for a kid’s birthday, even just an hour or so might get you a nice chunk of change.

Some harsh comments, keep your chin up!
As a Wichita native, I’d love to meet you. Sounds like a cool, unique house. The fire truck is awesome, can’t put a price on some things. Some of these guys just can’t get over the math. I know how fire houses are built in this area, probably all brick,not sure what part of town you’re in from the photos, but I think you’ll be OK if you sell. For those of you in California, he could have bought a low end new home in the ‘burbs or a larger home in a less desirable part of town(the hood) for the same money. He still paid less than your down payment.
Lots of people would say I spent too much on my place in the country, but there are some things you just can’t put a price on. Hang in there brother!

I use credit cards every day, but I don’t owe one cent to anyone. Not for my car, not for school, and not for my home. Everything I own, I’ve bought with cash. When I get a house, I’ll get a mortgage because it makes more financial sense. However, I find it strange to read somebody talking about living without credit and then detailing all the money he has to pay back.

On the flip side, I found it kind of funny how Tyler was almost apologetic about buying a firestation and a firetruck. Especially the truck, which cost less than my last car, never mind my current one, and is totally awesome. Granted it’s a frivolous purchase, but it doesn’t take a whole lot of thought to come up with $5500 I’ve spent on things I didn’t really need… camera + Rock Band drums + electric piano + 1-week vacation… done!

On the one hand, it might have made more financial sense to rent a bachelor apartment for a few years and build up a down payment, but if he’d done that he wouldn’t have had the chance to get the fire station. Somebody else would have bought it, and that would be that. There are some opportunities you have to jump at, and this is one. And at $116,000… I don’t know what rents or wages are like there, but to me that sounds like peanuts.

The one thing I wonder is if he couldn’t reduce his winter heating bills by closing off and only heating one section of his home, and buffing up the insulation in that area. I know I did that with just a normal house when I had oil heat.

It seems that you were taught at an early age that overindulging on credit and other material things is not smart and only leads to problems in the future. would love to see pictures of the fire home and truck. keep up the good work.

Student loans are CREDIT.

A 9.75% loan on a car is CREDIT.

It’s a blatant lie to say you “don’t use credit” except your mortgage. You are using credit every time you spend a dollar you could have used to pay back your existing student loan and auto loan debt.

It sounds to me like Jacob was able to get everything he wanted with a minimum of irresponsible finance. He’s paying off debt, he’s saving, he has a stable job and he lives in an awesome, functional space. Doesn’t sound like he’s going anywhere. Well done, man!

The link to the New York Times rent v. buy calculator (thanks for the tip, J.D.!) is very helpful. I ran some calculations regarding my own situation, and saw that even in California’s depressed market and low-priced rentals, in my situation owning still was better after just a few years. The calculator is fairly comprehensive, too. Renting usually makes sense only in the short term.

On the other hand, I’ve tried calculations to justify owning a vacation home, for which I haven’t found a calculator, and it seems that unless it’s rented to others for most of the year, you’re better off investing the money and staying in a hotel or rental instead.

Way to go, Jacob! Very creative way to get ahead financially.

What I like is that this story didn’t make the cut in your book! Now I absolutely need to know which stories did!

I think Jacob has shown an excellent example of making choices that get the biggest ‘bang for the buck’. He certainly spends a lot more than some people for his hobbies, but he clearly gets a lot of enjoyment out of them. It’s the difference between mindful spending, and mindless consumerism.

I disagree. I think even in this case, owning is clearly superior to renting. First of all, you made a math error yourself:

“If he could rent for anything around ~$700/month, he’d come out WAY ahead (hundreds of thousands of dollars over 30 years) to rent at $700 and invest $250/month in higher-earning investments.

Jacob’s mortgage payment was $900, but your numbers here add up to $950. I wouldn’t ordinarily jump on someone for this, but you made a point of complaining that “people who read a PF blog can’t do math.”

Now, how about a quick apples-to-apples comparison. Assume Jacob has $1300/month available for any combination of housing and investing. Yes, I know I’m assuming additional income capacity here, but this is necessary because otherwise we couldn’t do this comparison. If we assume he just has the $900, then after 13 years, his rent will have risen to consume the whole $900, and we couldn’t complete the comparison for the full 30 years.

Let’s say Jacob is on a 15 year fixed mortgage, and his payments are $900/month. His payments never change with inflation. That leaves him $400/month to invest, until his mortgage is paid off. Then, he has $1300/month to invest. Assuming an 8% rate of return for 30 years, that gives him $907,578. However, he also owns a home that is worth $210,118 (assuming 2% inflation). That’s a total of $1,117,696 in assets.

In the rental scenario, Jacob is able to invest much more initially. He has the same $1,300/month available for housing and investing, but with a lower initial housing cost of $700, he has $600/month left with which to invest. Of course, this diminishes each year as inflation demands more and more of this excess cash be directed towards his rent. Assuming a 2% rate of inflation, then after 30 years, his rent will have risen to $1,268, leaving him just $32/month to invest. However, your assertion seems to be that being able to invest more in those early years will give “Rental Jacob” an advantage worth “hundreds of thousands of dollars.” In reality, however, assuming the same 2% rate of inflation and 8% rate of return, “Rental Jacob” will accumulate just $675,261. And he has no real estate asset to show for it.

That’s a difference of $442,435 in favour of owning, not renting.

I guess I shouldn’t be surprised that people who read a PF blog can’t do math, but it still does surprise me. :-/

First, he didn’t purchase the house with cash, so he’s paying a monthly payment. He writes in comment #32: “Out of my $900 payment, $250 goes to principal.”

So he’s paying $650 a month to “rent” the money to buy the house from the bank, plus maintenance, insurance, and property taxes that would normally be covered by the landlord in a rental situation.

If he could rent for anything around ~$700/month, he’d come out WAY ahead (hundreds of thousands of dollars over 30 years) to rent at $700 and invest $250/month in higher-earning investments.

In my neighborhood, I’m renting a house worth $950,000 for $3100/month. So the rent/own ratio gets really distorted in some places.

I’m sticking with my earlier post that renting and saving some money first would have been a far better choice…especially since he’s young and may very well move in a few years. I think we as a country/world have to get out of the mentality that owning is necessarily better.

-Erica

Good to see you are associated with Boeing – you must be feeling especially good given the status of the KC-X RFP and the work that would be coming Boeing Wichita’s way!

It’s certainly an interesting story, and he’s clearly accomplished a lot for his age. I just think it’s a little dishonest to portray him as someone living “without credit.” Sounds to me like he’s had an average amount of debt in his life, with the exception of the lack of credit cards.

J.D. you can feel free to delete my comment @ 31 above, and if you’re trying to help Jacob stay more anonymous, I suggest deleting his last name from the post at the very least.

I’m originally from Wichita as well, and many of the young people who go to state schools and move back to Wichita buy a house at 22/23 1) because they can, and 2)because they likely will end up living there for many years. Cities like Wichita didn’t have a run-up in real estate prices in the last decade, and thus didn’t lose much when

@Tyler: Wichita has far more jobs than just those in the airline sector. Among others, Koch Industries is headquartered there and is a huge employer that has continued to grow through the economic downturn.

Dig the fire station, man. I’ve seen terrific houses made from barns and churches, grist mills, pretty much anything. Small towns are easier to work with on re-zoning.

And it may have been impractical, but I kind of love that Jacob bought not just a vintage fire truck, but the one from his dad’s home town. I’ll bet he’s asked to drive it in every parade.