Mortgage Free Tiny Home Story

Kirsten from faircompanies.com recently updated a video that I wanted everyone to see. The video is about Johnny Sanphillippo who lives in Hawaii and how on a small salary and over time he built himself a very comfortable small home to live in.

I like the way Johnny went about doing this. First buying the land and paying cash for it and than gradually over the next 10 years building a wonderful little home for himself.

I think that we can learn a lot through his story and it follows along with many of our ideals as tiny house enthusiast. Please tell me your thoughts in the comment section below.

You can also view my previous post on Johnny here.

52 Comments Mortgage Free Tiny Home Story

  1. Paul R

    Thank you for posting this video. I have often wondered about the “wisdom” of having a mortgage. While you do get a tax credit the total of the credits over the life of the mortgage are far less than the interest you are paying on the mortgage.

    Reply
    1. Josh

      …While you do get a tax credit the total of the credits over the life of the mortgage are far less than the interest you are paying on the mortgage…

      Well, you don’t get a tax credit – you get to deduct the interest expense if you elect to itemize deductions. A tax credit reduces your actual tax liability by the amount of the credit; a deduction reduces your taxable income by the amount of the deduction. And it only helps you if you itemize deductions instead of taking a standard deduction. For a married couple, it would equate to having about a $300,000 mortgage (if they had no other itemized deductions), and that amount being paid every year in interest will dwindle to nothing throughout the life of the loan.

      But for most people, the options are to take out a mortgage for a home, or rent. If you took out a $200,000 mortgage, you could conceivably have your payment amount locked in (for the mortgage anyway). If you rented an apartment for $1,000 a month, and it increased yearly to track with 3% inflation, after 30 years you’ll have paid about $570,000; compared to a little under $340,000 for the mortgage (payments only – not including insurance and property taxes, etc.), and there are certainly maintenance costs that go with owning a home that you don’t have with renting an apartment. But, for $200,000 you should be able to buy a home that’s nicer and/or larger than a $1,000 a month apartment (in most places), and at the end of your mortgage term you’ve got something that’s worth something. 30 years of renting leaves nothing to show. There are those out there who advocate renting at a lower cost than buying a home and investing the difference in things that traditionally earn a higher rate of return than the appreciation of a home. I’m sure there are plenty of people that would argue the soundness of that idea also.

      It’s a neat story, but it sounds like there are some logistical problems with living in that area. It also sounds like this was his only viable option because he doesn’t make enough to afford a traditional home. It seems like kind of a dangerous proposition though. As he outlined in the video, a bank won’t risk a mortgage on a tiny home like this, so even though he owns it free and clear, he likely wouldn’t be able to get a home equity loan if he needed cash for some unforeseen circumstance in the future. Similarly, if at some point in the future he becomes a little too old to take care of himself, I’m sure it wouldn’t be an easy task to find someone interested in purchasing that home, and it sounds like he doesn’t have much of a retirement plan to cover the cost of an assisted living facility.

      I love reading about these tiny houses, but they seem like they would make more sense for someone who’s young, and wants to save money while they’re starting out in the workplace, or, at the opposite end of the spectrum, someone who’s ready for retirement, has enough saved to live comfortably, and wants to downsize from a traditional home now that the kids are all grown up and they don’t need tons of space.

      Reply
      1. Rosabelle

        Josh,

        Thank you for your well informed and careful explanation of the tax and investment implications of home ownership via mortgage debt. All true, I have no doubt.

        What advice do you have for those of us who don’t have enough money to buy a house in the first place – or even enough to rent a $1,000 a month apartment? What suggestions do you offer to those who don’t earn enough to take advantage of the mortgage interest deduction? What do you recommend to those who did in fact buy a house and then lost their jobs and were foreclosed upon? What specific instructions do you offer to those who own homes that have lost significant value and can’t sell or move in a depressed market? These things aren’t hypothetical for many of us these days. We really do need good council. What are the sensible options for the underemployed and dispossessed?

        The one-size-fits-all large expensive single family tract home (or upscale condo) is often the only product on the market since that has been the only legally buildable housing type permitted by government, banks, insurers, and developers. (It isn’t a conspiracy. Don’t misunderstand me. It’s more a set of entrenched assumptions and routines.) For many of us we have three alternatives: 1) Live with family or multiple room mates, 2) Live in a trailer park, or 3) Quietly break various conventions in order to house ourselves in the gray areas.

        Reply
        1. Josh

          Rosabelle:

          Let me do my best to answer your questions with my thoughts, for whatever they’re worth. I am, bo no means, a financial planner or advisor. I’m an accountant, which is why I’m very familiar with the difference between a tax credit and a tax deduction.

          What advice do you have for those of us who don’t have enough money to buy a house in the first place – or even enough to rent a $1,000 a month apartment?

          Unfortunately, I think the only advice there is to live within your means (including leaving enough to save for emergencies and retirement). If you’re reading this blog, odds are you’re not opposed to living in a small place that isn’t necessarily luxuriously furnished. If you’re having trouble managing what money you make, write down everything you spend and take a look at it at the end of the month. Not only will that give you a an idea of what you spend a month on expenses, but continuing to do so makes you consciously think about whether you need something before you purchase it. Aside from figuring out how to make more money, you have to make do with what you have, but my big point was that you have to also plan for the future – if your monthly expenses are equal to your monthly income, you’re going to find yourself in big trouble at some point, whether through the unexpected loss of a job or when it comes time to retire.

          What suggestions do you offer to those who don’t earn enough to take advantage of the mortgage interest deduction?

          That’s not an issue of earning enough, it’s just whether or not the interest deduction would be more than the standard deduction. The standard deduction for a single taxpayer for 2012 is $5,950. At a 4% interest rate, that’s equal to about the amount of interest for the first year of a $150,000 loan for 30 years.

          What do you recommend to those who did in fact buy a house and then lost their jobs and were foreclosed upon?

          That’s a tough one, file for bankruptcy and try to rebuild your life, I guess. I think a lot of those problems go back to a failure to plan ahead and failure to live within means. We’re all aware that the problem with the mortgage fiasco is that people were buying homes that were beyond their means. Clearly one of the problems is people thinking they need more house, more car, more etc. than they actually need. The other big problem is people who can’t afford those things not understanding that they can’t afford them. Sure, a huge part of the mortgage problem were lenders approving people for loans that they probably shouldn’t have been approved for, but there needs to be some personal responsibility also. If you’re signing a document to purchase something that, for many people, is more than an entire year’s salary, you need to be able to sit down and figure out what you can afford. If you’re not capable of doing that, you need to find someone to help you – not the lender who’s trying to sell you a loan and get a commission from it.

          What specific instructions do you offer to those who own homes that have lost significant value and can’t sell or move in a depressed market?

          Markets fluctuate; just because it isn’t selling today doesn’t mean it won’t in the future. Again, like the issue of losing a house to foreclosure, your options are pretty limited. Sometimes you have to suck it up, lick your wounds, cut your losses, and try to rebuild.

          To me the issue is proper planning beforehand, as opposed to recovery after job loss, home foreclosure, etc. What’s the saying – an ounce of prevention is worth a pound of cure. Many of the problems come from people with eyes that are bigger than their wallets. They fail to properly balance what is needed, what is wanted, and what they can reasonable afford. I’m not against quietly breaking conventions to live in the “gray area.” I’m just saying that if you’re doing that because that’s all you can afford and you’re still living paycheck-to-paycheck, you’re not getting ahead in life, and are may still find yourself in a lot of financial trouble – particularly when you’re older and no longer able to support yourself and have no retirement to fall back on.

          Reply
          1. Rosabelle

            Your advice boils down to this: Know what you’re capable of, live within your means, plan ahead, and save for the future. Isn’t that exactly what this video is all about?

            The real issue here is that there are no legal market rate homes for people who understand how to be responsible and are willing to do all the right things by living in a home that fits their budget.

            Here’s an example. Most people with modest incomes, no collateral, and very little savings almost always have access to car loans. A lending institution will generally provide a $30K loan to someone to buy a car, which is a depreciating consumer product that will likely be worth very little at the end of a five year loan – and they do this because it is a profitable business. Why can’t there be $30K loans for small houses that will actually increase or at least hold their value after the five year loan? The only products on the market that fit this description are trailer homes, and they tend to be built to a low standard and do not come with land.

            In my opinion the real problem is cultural. Municipalities have minimum home size requirements because small homes are associated with poor people. Poor people are associated with lower property values, lower tax revenues, higher crime rates, and “undesirable” ethnic minorities. Apartments are also considered malevolent because they are full of people who can’t afford a single family home and therefor must be deficient in some way. That same apartment building is much more acceptable if it is a condo complex instead – thereby raising the bar for occupancy.

            So, nearly every local government in the country simply makes small affordable independent homes illegal. The affordable housing crisis isn’t simply about people living beyond their means – it’s a failure of government policy (which is really just a reflection of our collective culture) that prevents folks from living in anything other than a large expensive single family home. “If you can’t afford a $200,000 mortgage, don’t live in our town. We don’t want your kind.”

            There’s also the problem of auto-dependent sprawl (90% of everything built since WWII) that requires everyone to own a car just to get from Point A to Point B. I know from personal experience that pedestrians and bicyclists are often viewed as “suspicious” by suburban police because it is assumed that “respectable” people have cars. if you don’t have a car, you must be up to no good. This is very expensive for low income folks – thereby keeping them poor and preventing them from saving for a house. So where do the young, the old, and the unlucky live? Mostly, we are shunted off to a trailer park on the edge of a bad part of town – the market oriented solution to the lack of small affordable housing.

            I’m interested in the gray areas. Single family homes that have quietly converted the garage, basement, or attic into a studio apartment, the tiny house on wheels in the back yard, the build-it-yourself home in the country. That’s why I love this web site. It’s about smart people who are living within their means, planning ahead, and doing what they can within the existing framework to take care of themselves.

          2. Josh

            Your advice boils down to this: Know what you’re capable of, live within your means, plan ahead, and save for the future. Isn’t that exactly what this video is all about?

            Since he mentions having no retirement fund, and seems to have no desire for a “real” job – like one with a retirement plan, health insurance, one that pays a living wage, etc. – no it doesn’t seem like there’s much planning ahead for the future. He makes $20,000 a year in a city with a consumer price index of 185 – the equivalent of less than $11,000 in a city with an index of 1. $11K is poverty level in the U.S. for a single person.

            I realize that there are some people who just don’t want to compromise. If all you want to do is clean people’s houses – fine, but you have to figure out a way to make it a successful venture. I think it’s neat what he was able to accomplish without having a mortgage (even though it seems that it was because he couldn’t qualify for one); and it can certainly be seen as a responsible thing to do. I would argue that the more responsible thing to do would be to put on the big boy pants and realize that even though you just want to clean houses, sometimes you have to compromise and do something that’s financially productive in order to secure a future for yourself. I’d like to sit around all day playing guitar and watching movies, but that’s not going to pay the bills. I’ll bet you could get a job as a janitor at Wal-Mart and make more than $20K a year if you really loved cleaning.

          3. Joe Hill

            Yup, put on those big boy pants and get a job with a corporation that provides healthcare and retirement benefits.

            In a devastating blow to 122,000 workers and retirees, a federal bankruptcy judge ruled May 11 that United Airlines may default on its pension obligations and turn over control of its pension funds to a federal agency that is already swamped by corporate pension defaults.

            While there’s admittedly only anecdotal evidence to support this alleged exploitation of Illinois’s Link program and Wal-Mart is one of many large grocery chains that accepts the Link card, reports and research in other states demonstrates that the corporation does have a history of employing more workers dependent on state welfare programs than other chains. Reliable numbers on the company’s profitability from it’s employees using public assistance programs are hard to come by, but a look at data reports from other states indicates that public assistance to Wal-Mart employees isn’t an uncommon phenomena.

            More specifically, a recent study conducted by the state of Massachusetts found that Wal-Mart topped their list of companies with 50 or more employees using publicly subsidized care (PDF here) with a total of 40 percent of their employees in the state relying on state aid for health care. And the company topped a similar 2004 study in Washington state which found that nearly 20 percent of Wal-Mart employees received state-subsidized health coverage, either through Medicaid or the state’s Basic Health Plan, more than twice that of competitor Safeway, who at the time employed roughly the same number of employees in the state as Wal-Mart.

      2. CD

        In my line of work, owning a home is like a rock chained from your neck. I sometimes need to grab my “bug-out” bag with cash, passports, memory sticks and 2 changes of clothes and head for the airport in 12 hours. Max what I can on the credit cards and fly to my real home abroad, inherited from and paid for by my gramps. Plan B opposes a mortgage, I am free.

        Reply
  2. Cindy

    Does he live in Hawaii now? or just own the home there? Sounds like he is still in SF working part of the time.

    I love the out door shower and did he get rid of the overhead door? I thought that was a cool way to make the outside area part of his living area.

    Reply
  3. Alfred

    Even more than the house itself (which is wonderful), I admire the man’s character.

    This is someone who is thoughtful, resourceful, reflective and patient.

    He accomplished all this without a background in building or construction, and it was done on the grid and with permits!

    There are many good lessons here, thanks Kent!

    Reply
  4. janie

    What a great video! After years of having a house with a large mortgage, (and having everything taken away when I lost my job), more and more I agree with his line of thinking. I am going to look into something like this to just build a small home and have it be mine.

    Reply
  5. kenny

    I love this. People do not realize that you only get like 25 cents back on a dollar in write offs with a mortgage.

    If one “can” pay off a home sooner than later, it is always to their advantage. Maybe it is different for the very wealthy?

    I for one would do this in a heart beat. Pay over time, know it is going to be affordable for the long hall

    Only omission I have to this is that he would likely be far from city services. I want to knowI can live confidently without a car, not being effected by high gas costs. Just ride a bike. But maybe this is not too far from services where he could not ride a bike into town??

    Was the garage door kept? I am curious because on my detached garage project, I would like to keep the electric door for access to the outdoors in nice weather. Or, I will just make it a French Door where the garage is now. I think it would be hard to make a dwelling in my state legally with a garage door still attached, there is also the insulation issue.

    Great story. I would love to hear more about his water catchment system and the entire budget for the home build, septic system, electrical costs, etc.

    Also, does he live in Hawaii? Lived in SF and then moved to Hawaii to start building the home later on?

    Reply
  6. DoItRite

    Good video!

    Johnny is exactly right. The economic system in the USA is designed to push people into a big house/ mortgage/ payment/ life of workworkwork.

    I have built in a similar manor. Smaller also means lower property taxes. I also reduce my taxes by deducting energy-saving upgrades (this year it was 10 grid-tie solar panels, and maxing out my retirement savings plans.

    But generally I have accepted that taxes are the price we pay for good roads, good emergency response, a good safety net, a (generally) well functioning legal system, and (generally) good schools and a relatively clean and healthy environment. Although I don’t personally now need or use most of these services, I am part of a society, and most of my friends, neighbors, family and co-workers will at some time use them, and I may need them in the future.

    This is a belief system and mind-set that I have adopted to avoid becoming sucked into the corporate world’s mantra of buy/spend/dispose, and I am much more at peace than those who are always trying to always “get ahead” like a hamster in a wheel, or constantly scheming to avoid taxes.

    Reply
  7. Hazel

    Johnny’s attitude is so refreshing in this day and age! And it’s so logical that everyone should ‘get it’. He’s such an inspiration! I hope young people will see this and really think about what they are doing with their lives.

    Thanks again to Kent and the tiny house blog for this exposure to sensible living.

    Reply
  8. Donatella

    I can answer a few of the above questions. If you look at a google map of the Big Island (Hawaii), search on the extreme lower south east of the island, just to the east of the lava flows off the volcano. He’s in one of those developments there. It’s a bit of a drive, maybe 15-20 minutes, to a small town for supplies and a good 40 minutes or so to Hilo, the main town on that side of the island. If you put the little yellow ‘google guy’ down on the map, you can drive around and get a good idea of what the area looks like. Virtual travel, I love it!

    There’s a lot of problems with that location; it’s very near the volcano and some developments have been encroached upon by lava flows. The VOG, or volcanic fog, can come in over you if the wind shifts although lately it’s been mostly going over towards Kona, the rich west side of the island. The land is overrun with coqui, a tiny invasive frog that has an incredibly loud chirp, up to 120 decibels, if I remember correctly. You can search on line for recordings of it. It can make it hard to sleep at night, there’s literally millions of them, and the eradication attempts are ongoing.

    Then there’s the 200 or so inches of rain every year. The reason people have catchment tanks is that many places don’t have water lines; so you have to catch your own rainwater and then treat it further if you want it safe to drink. Most people buy drinking water separately, another expense. Most supplies are flown in so except for local produce, milk can cost $7-8 a gallon, meat maybe double what it is on the mainland, and good jobs are difficult to get. The land in Puna (his area) is very cheap but for a reason; there are few jobs nearby.

    If you’re interested in the Big Island, I would recommend the Hamakua or Honoka’a area, upper right hand corner or NorthEast section; and be aware that altitude makes a big difference to humidity levels and thus livability. At the coastline it’s quite steamy all the time, up at about 2000 ft altitude, it can be quite pleasant. Essentially wherever you’re living on the island, you’re on the side of a volcano.

    Don’t get me wrong, it’s wonderful what he’s done and I wish him well and all the luck in the world but the BI is not necessarily paradise.

    Reply
  9. molly

    Thank you for sharing this story! This is the type of story that brings me to your web site.

    This is what I am planning to do. I prefer the idea of hiring individuals workers as opposed to a contractor who has his own team. Not only do I get a better deal by hiring someone who works on his/her own, it helps them by providing work during their slow periods. Win-win for us all.

    Reply
  10. Gigi

    Awesome story. Really inspiring. I admire Johnny so much! My husband and I are doing the same thing… save, save, save for now. Then build our tiny house on wheels with 2 lofts and park it in a nice RV place. Then save some more to find the land that we can afford and just drive our tiny house on wheels in the property. We’re in the midwest and land can be affordable even in the suburban areas but we don’t want mortgage for 30 yrs. or credit card debts hence just like Johnny we are trying to be patient, frugal and sacrifice a bit in life.

    Reply
    1. Susan

      Sorry, Jay, couldn’t disagree with you more. The whole banking/credit/mortgage thing that is prevalent today is a huge, morally bankrupt scam. Johnny’s home truly belongs to him, not rented from a bank and a system that will keep him a wage slave for decades. I applaud Johnny’s courage and self discipline to follow his own path.

      Reply
      1. Jay

        No, no, I don’t disagree with you about that. Or with him about it for that matter. He just has such a huge chip on his shoulder about it all that it is very off putting.

        I am sad for him that he feels like he has to live his life continually explaining why he has a small house, etc. Just live it. Stop trying to explain it.

        Reply
      2. Upe

        John, this is AMAZING! I’ve been waiting anuisxoly for this project to wrap up so I could see the finished product, and wow, you’ve produced a great video truly capturing the feelings and textures of Whitley County and its people. I’m excited to see what doors this will open for your production company. Best wishes!

        Reply
  11. Debra lives in 320 square feet

    Hi Johnny! You did it! I am so happy you did the video! Thank you for the ideas! This reminds me of my house in the jungle of Ecuador…..we did it out of pocket, no mortgage. It took 6 years, but it was a tiny beauty.

    You sound so happy. I love that you are delighted with you work, even though it may not pay what a bankers salary might not pay :) You take pride in what you do, and your house, this is true dignity.

    Cheers!

    PS – the music is great, Kirsten!

    Reply
  12. wyndwalkr

    I admire Johnny immensely! I agree with his attitude about mortgages. I hope he can retire to his place (I assume he has not already moved there full time–??) because I had an experience here in Wisconsin once when I was granted permits for a cabin with a privy but was told in no uncertain terms that I had “better not be caught living there full time.” I suppose a lot depends on what neighbors he has or will get. Doesn’t sound like it may be a place for whiney upscale neighbors. Seems peaceful (And now I am going to go listen to the frog sound…)

    Reply
  13. Victoria - Ozarks Crescent Mural

    I love-love-love this video! I love every word he said. I love that he saved and paid cash for the land and that he built the house over 10 years. I love his patience and persistence in going through the two years where he was strapped and couldn’t work on the house. That is a brilliant show of faith. I’ve experienced the joy and satisfaction of saving for a long time and buying something for a lot of money and there’s nothing like it. I will keep his story in my mind forever as I continue to go through my savings process for my land and my tiny log cabin.

    Reply
  14. Ozark Nick

    Haha!!! This is great!!! Sounds exactly like what I’ve been saying! I don’t care about stuff, I just want my time thank you!

    The way modern society deals with finance and home buying etc … it’s just all upside down.

    Reply
  15. John Mauldin

    Bravo, Johnny! I admire your common sense view of your home and life. Seems like you have your priorities in order. I often wondered what is necessary for someone to enjoy their work AND their life while holding down a job they enjoyed yet did not really “pay the bills”. Again, Bravo, Johnny! WordPress Resources

    Reply
  16. Lori

    Thank you. This is brilliant. I am going to do the exact same thing. The accoutant’s worries that this lovely man will have no way to care for himself is just another way to worry about the future. You can play that gaem with anything. You can have you own home and be surrounded by family and friends and get cancer and your life still goes away. There is NO WAY TO LINE EVERY SINGLE DUCK IN A ROW. That is not what life is about. Life is about living and this man is doing that. BRAVO.

    Reply
    1. Josh

      …worries that this lovely man will have no way to care for himself is just another way to worry about the future. You can play that gaem with anything. You can have you own home and be surrounded by family and friends and get cancer and your life still goes away.

      Or maybe you beat the cancer because you have health insurance to cover your medical treatments. And what happens when you don’t consider the future consequences and end up an old man with no savings, retirement fund, etc. to pay for your expenses? $20,000 a year isn’t paying much into Social Security; there isn’t going to be much in the way of benefits there. I guess the best you can hope for is to spend your life working for next to nothing and die as soon as you retire.

      Reply
      1. Athena

        …as a veteran who had the audacity to get almost fatally sick while on active duty and was kicked to the curb with no benefits(yes, our much-vaunted military does that, especially to enlisted personnel)and as a 53 year old woman taking care of my 83 year old mother with no financial aid, on the salary of a warehouse worker…I’m still building- a wee bit at a time, as I free up $20.00 and 2 hours at a time– a Dee’s “Don Vardo” based modern Irish Vardo; this will be MY home,not in financial thrall to someone who is burdened with overweening arrogance thru ignorance. My point is: Everyone has their story; and everyone gets to try to solve their problems in whatever unique way works for them: “Tutto e Possibile.”

        Reply
  17. Jenna

    My biggest obstacle to living this dream: finding a piece of property to buy with no obligation to build and no architectural restrictions (except what’s mandated by building codes). To me, a huge part of this “go big or go home” problem has to do with the developers who buy large portions of land to subdivide, as the current trend is to give people a half-dozen options of houses over 1,500sq.ft that must be built (or on their way) within a few years. No wonder so many people get caught in debt they can’t afford! They’re taught to think there’s no other way!

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  18. Suzanne

    Wow! I’m a little floored by the controversy in the comments! I happen to have loved the video and can relate to Johnny Sanphillippo who seems like one of the NICEST people going! Such a thoughtful, spiritual and sensible person. He was very generous to share himself like this.

    Thank you Johnny for sharing your experiences and your life!!! You are a wonderful person and even though I don’t know you, I am proud of you and happy for you!

    Thank you Kirsten for all of your continuing excellent work! You are a true artist and an humanitarian. I mean that!

    Rosabella! Good for you! Thank you for giving Josh a bit of a run –what with his “personal responsibility” regurgitation. Tiresome. Is he joshing?

    All that hogwash would have been “fine” in 1982 under Reagan (when things were already (being made) to fall apart for so many of us. But in 2012, he sounds like he hasn’t clued into what has been going–for nearly 40 years already.. You’d have to be rather blind…don’t you think?

    I guess he may not realize how many people are UN-and-under-employed in this country. And he probably doesn’t realize what the impacts are on the many people who are living in communities and in households where this is a major life factor. So many households have only one income coming in–if that. AND, reflecting on his assumptions about “real” jobs, I MUST point out that many jobs do NOT have AT ALL, or if they do, DO NOT have AFFORDABLE health insurance.

    Yes, the big store-in-the-box may say they “offer a group health insurance coverage buy-in” to their employees, but many of those employees may not be able to afford it. And as a side note, let’s think about all the employees of those stores-in-a-box across America who are paid so little they actually qualify for public assistance.

    Also, Josh, you may not realize that half of bankruptcies in the US are due to medical expenses and that the vast majority of those people HAVE health insurance through their job.

    US health insurance plans don’t really cover everything and leave a lot of gaps. So does Medicare that only pays 80% of many services leaving the other 20% to the beneficiary!–a bit of a joke compared to Medicare coverage in so many other countries and north of the border in Canada!

    Let me tell you that 20% of a couple of MRIs and other outpatient treatments can be EXTREMELY costly to Medicare beneficiaries…and outpatient chemo! Terrible! Many people with Medicare coverage simply cannot afford premiums for their own Medigap policy. These Medigap premiums are now higher than what straight commercial health insurance premiums were for an employed individual in the 1980s. And many seniors may not qualify for Medicaid so they’re stuck in between.

    Does this sound like a 2-Ton Elephant in the living room? Our (tiny) house is collapsing on one side because of that elephant but it appears it may be pushing up the floorboards on the other side of the room where Josh is sitting. The collapse on one side is pushing up the other side like a seesaw.

    If he thought about that for a moment, and thought about the shake-out that has been this big mortgage and housing bubble, maybe he’d realize the errors of his lofty assumptions. We’ll assume he hasn’t had to worry about paying his utilities, food, car insurance, $4-a-gallon gas, clothing the kids, paying for medical supplies not covered by Medicare, etc., etc., etc. But if he falls on hard times, the kind, Rosabella and I have been talking about, we will welcome him and his family into our (tiny) homes.

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  19. Margaret

    My question is simple; What island? And kudos to you Big time!
    We have those same ideas exactly and the ball is starting to roll.
    Aloha!
    The Villa’s
    Cerritos, Ca

    Reply
  20. Charlie

    Lighten up Josh. A lot of people who lost their houses had nothing to do with living beyond their means or poor planning. I’m old, so the advice I received when I was young may be way out of date. I was told to purchase a house at x times my salary (I can’t even remember, ha!) and have at least 6 months salary in reserve AND live on only one salary (I told you I was old). Even people who followed this advice ended up losing all because that advice did not anticipate the Great Recession where families could lose both bread earners through no fault of their own but due a world wide economic down turn. Almost no amount of planning will make up for being unemployed for two years. Funny, I don’t remember so much criticism of the people waiting in soup lines during the Great Depression. What did one of the politicians say before he too bit the dust, if you’re not rich or you are unemployed, it must be your own fault. It’s always easy for the rich to say that. I’ve worked all my life and now have no debt and can live relatively comfortably because everything is paid off. I was retired WTSHTF but had that happened to me mid-career, I might be living out of a dumpster. Timing (luck) is everything. Johnny, on the other hand, marches to the beat of a different drummer. I admire his gumption for doing it his way. Donatella: All real estate appraisals in Hawaii have lava flow assessments, that’s just the way of life there. I live both in GA and KY and March came in like a lion a couple of days ago and killed lots of people and wiped out complete small towns. No place is safe from mother nature nor man; what if Johnny lives a little closer to mother nature, he is a little further from man, at least in large numbers. If he considers his place a little paradise, then it is. Many people consider frogs to be the canary in the mine shaft and they are dying all over the world EXCEPT Hawaii. Maybe the frogs know something we don’t. The conqui used to be treasured by Puerto Ricans but they are dying out there. Some people enjoy the sound they make. True the state government has declared them an “invasive species,” and now has an eradication program going on, but we all know how that goes. Personally, I would test to see how their legs tasted if sauteed in garlic butter. I know they’re small, but there are lots of them. Why does the rain water in Hawaii have to be treated? I filter the water from my water catchment at my bug out place but that is because all the coal burning plants which pollute the air and the water but then I also have to limit the amount of fresh water fish I eat for the same reason. Does Hawaii have that problem? Lisa said it best: Bravo Johnny! And not having a mortgage hanging over his head may add years to his life. I know I was relieved when I paid mine off. Still am!

    Reply
    1. Josh

      Lighten up Josh. A lot of people who lost their houses had nothing to do with living beyond their means or poor planning.

      I absolutely realize that. And I’ve tried to express that, from a tiny house building standpoint, I think it’s a fantastic story. I guess I just wanted to give my perspective on the situation because I get this feeling that this guy is saying, “I don’t really want to work very hard, so I’ll just clean people’s houses and build a tiny home.” Now, that’s much better than the, “I don’t want to work hard so I’ll use welfare and food stamps to pay for necessities and use what little money I earn to buy junk food and cigarettes.”

      As Suzanne points out, even people with health insurance sometimes go bankrupt because of gaps in insurance that don’t cover medical bills, and, as you point out, people lose their homes because of circumstances out of their control even though they do a good job of planning ahead and living within their means. But I would offer that even a health insurance plan offered by a big-box retail store, even one with gaps in it, is infinitely better than no plan at all. And the fact that people lost their homes or go bankrupt despite planning for the future is not an excuse not to plan. That’s like saying, “People die in car accidents even when they’re wearing a seat belt, so it doesn’t make sense for me to wear one.”

      I can’t say enough that it’s a great story about the building of a tiny house – I think I could live there comfortably (by myself anyway – but I’d might need some storage space, and maybe a tiny addition to be used as an office) – but I guess the overall story isn’t so appealing to me. He built this house because of seemingly no other options – he tried to get a regular mortgage, but couldn’t.

      I love seeing the ideas presented on this blog because I often envy the idea of reducing the amount of stuff I have and having a more simple home. I was an 11B2V in the Army and served overseas in the early part of the Global War on Terrorism, and that helped me realize that I don’t need most of the stuff that I have. That being said, I have a lot of things that I don’t use often, but I use sometimes, and I’m hesitant to give away. I guess I really love seeing the stories about someone who makes that realization that they can do with less because it seems right, not because it’s necessary because they’re not willing to work hard enough to afford something better.

      I won’t argue that it wouldn’t hurt me to lighten up a bit; but I’ll counter that many others need to be a little more realistic.

      Reply
      1. Carolyn MVaussies

        The bottom line on this….. As I did the same back in 1982. Started a 840 sq ft (1 1/2 stories)house, I designed & hand built, with 75% cash(I had owner financed land at 10%, The Mortgage rate at that point in time was at 18=20%!!!!). Lived in a tent in the summers, etc. (I did put a mortgage on it, at 5 yrs, for 25K. For the whole Kitchen (finally), paid off the land, a get fullsized Van, & build a large Garage/Shop/Barn, to start my own business) The whole Idea is. IF you do get strapped ……….. You ARE NOT CARRYING THE HUGE OVER HEAD!!!!!! (mortgage, utilities, taxes, etc.) & hopefully get through it. And by the time you reach retirement, hopefully by then you DO have the money to do so, & saved easier. People don’t HAVE to go into assist living? If they set up their home for it, one floor like Johnny’s is. He can stay there with the Meals on Wheels & Visiting Nurses, & such checkins. Plus sorry, I’m of the thinking, If I need assisted living that bad?………. I don’t need to be here, in THAT STATE.

        Many places DO have small homes, bungalows, etc. so it is NOT new, but thankfully “The Market” & (banks will HAVE TO FOLLOW)are heading back to downsizing, as the Baby Boom retires. By the way, I sold my small house 28 yrs later, two weeks BEFORE it even was to hit “The Market”. I’m designing my last house to AGE in PLACE “Gracefully”. I figure at my age…a 5 yr project.

        Reply
        1. Josh

          People don’t HAVE to go into assist living?

          That’s a question?

          If they set up their home for it, one floor like Johnny’s is. He can stay there with the Meals on Wheels & Visiting Nurses, & such checkins.

          My grandparents are in their mid-eighties and live in an assisted living facility. They have an apartment there, that’s larger than many of the small homes featured here. My grandfather had a stroke a couple of years ago and his mind is not what it once was. It would be disastrous if he ever tried to cook for himself or was allowed to try to take his medication by himself. My grandmother has had Parkinson’s for several years. It’s almost always a struggle for her just to get out of bed, or get up to make it to the dining facility for meals. To be at home would require full-time supervision from a qualified caretaker. Their two children, my father and aunt, could certainly afford to support them in this facility if that was necessary, but luckily my grandfather never felt it necessary to only scrimp by. He worked hard and saved and invested. Just the cash rent that my father pays him on the farm land he owns makes for more than $250,000 a year in income, and that doesn’t require dipping into savings, bonds, other investments, or selling their home.

          If you want to roll over and die when you’re too old to take care of yourself, that’s your prerogative. I think that’s often easier said than done; I think the will to keep living is often stronger than most people imagine. I know my grandparents don’t want to miss out on anything in the lives of their grandchildren and great-grandchildren that they don’t have to.

          I sold my small house 28 yrs later, two weeks BEFORE it even was to hit “The Market”.

          Congratulations to you, but your house, although small, isn’t really tiny, especially considering it was built 30 years ago. But location would be a major factor also. It appears that the tiny house in this story is in a less-than-appealing area. If you’ve got a “small,” not “tiny,” house within reasonable distance of jobs, schools, etc., I’m sure it would be a totally different story.

          I’m designing my last house to AGE in PLACE “Gracefully”. I figure at my age…a 5 yr project.

          I absolutely and sincerely wish you the best of luck in those endeavors.

          I love the alternative ideas presented on this forum; otherwise I wouldn’t be interested in reading these stories. I just sometimes see a bit too much romanticism about it without enough reality. I’ve been guilty of it. My buddies and I a decade ago used to talk about how great it would be to live out in a cabin in the woods when we were stuck in Afghanistan, or out in the woods of Fort Bragg. Even as a bunch of young men, barely old enough to drink, who got paid for jumping out of airplanes, working out, and practicing the art of war, we had enough sense of reality to realize that we would need to win the lottery, inherit a great sum of money, or be some sort of well-paid freelance writer or internet stockbroker or something that could be done remotely that would allow a person to live their wilderness cabin dream and still be able to provide for our immediate needs and retirement, insurance, and other such needs.

          Reply
    2. molly

      You are right; sometimes you can do everything “right” and plan, but life still happens and you fall flat on your rear.

      However, how often do you stay on your feet when you do not plan? Where would you be if you had not done everything “right?” Probably in a worse place.

      One third of my income goes to my health insurance premium; it has for over a decade. I refused to cancel it though, even when I could only afford a closet size room to live in. I’m glad I didn’t. Two years of medical bills, where I still pay 20%, has wiped out over $40,000 in savings I had to build my own home and I still owe more. Those bills on are my credit and have caused me to be turned down for jobs. Had I not had insurance though, it would have been much worse. I would not have been “allowed” to get the care I did, if I could not prove I could pay, which has allowed me to keep walking.

      Planning for reasonable events in life never hurt anyone. Not planning has.

      Reply
  21. Amanda

    Love the story, though i do agree with Josh. What I’m wondering, though, is: How many cities/counties in the US would actually let it fly when you get permitted for a house/garage, then build the garage only and live in it? That seems like a risky move that could backfire. I’m glad it hasn’t in his situation (yet), but I would be afraid to do it myself. I love these tiny house stories, and fantasize about doing such a thing myself, but it’s discouraging that there’s really no legal way to live in a tiny house unless you can move to certain areas like the Ozarks. I’ve got a very high paying job that I like, in an area that I love, so moving is definitely not an option in the foreseeable future. After reading a recent post, I looked at the county code and found out that I indeed could not “camp” on my own land in a tiny house on wheels for more than 60 days. And I do not want to live in someone’s backyard. So while I wish I could use more of my money for expenses other than housing, I’ll never be able to do so by building a “tiny” house. Unless maybe someday I retire and move to the Ozarks.

    Reply
  22. barb

    Congratulations Johnny! Your home is beautiful and your story is inspiring. I love your home, but in my opinion, you decision to live a more simple life is even more admirable. Enjoy your lovely home!!

    Reply
  23. Charlie

    Maybe I like this story so much is that I always did the conservative practical thing, scrimped and saved and it worked out for me especially because of good health insurance. I’m a loss leader for Aetna. They’ve shelled out at least a million plus for me and more is expected in the future. Thank God they couldn’t cancel my insurance as some companies used to do. But I think Johnny has enjoyed life more that I did because he did what he wanted and not what was expected. I think it’s great that we live in a free country so that we can pick our way of life. A lot of people work part time cleaning other peoples houses but I doubt that they would refer to it as not working too hard. It’s a crying shame that many people have to work 2 or 3 jobs to break even. That might be admirable, but is it living or existing. I think Johnny is living. And since he owns his own home, no one can call him a bum.

    Reply
    1. molly

      I agree that there is a difference to actually LIVING life. A lot of people do not. I admire him for that. I also love that he looked at the reality of his situation and figured out what he needed to do to achieve his goal (owning a home). Most people in his situation would have said it was impossible and gave up.

      Reply
  24. Vicki

    I really appreciated this story. Years ago, in my home state of Alaska we went through a downturn in the economy…many lost their homes, My personal situation was very difficult with an underwater home. I left that situation determining to never go through that again.
    My husband and I have been doing it the old-fashioned way for the past two years. Found a piece of owner financed property…in our situation we do have a small land payment but will have it paid off in four years. We have been building a cottage out of pocket. It hasn’t been easy and we haven’t always been able to do what we want when we want it. But in two years we have cleared the property (5 acres), built a driveway, landscaped gardens, started with a 12X 16 dry cabin, and expanded to a 520 sq. ft. home. I calculated that with our land payment and the money we spent each month to build our house we spent less than an average two bedroom apartment in our area. We own our house free and clear and will soon start building a log home, the first of three more houses we want to build to eventually provide an income for us through rents.
    My generation can not depend on social security or investments anymore. We have to wake up and learn how to live a self-sufficient and self-sustaining lifestyle. I applaud this story and
    people who see what can be accomplished without a bank’s high interest.

    Reply
  25. Mr Frugal Frank

    Funny two days ago my wife and I went to the Pittsburgh home show ended looking @ “large” shed and then deciding the house we plan on building in a couple of years is going to be way downsized…Had no idea how popular this is….Thank U All

    Reply
  26. Mark Conrad

    This was an amazing and inspirational story. I love small homes for many reason but, watching and learning about the process is fascinating. I applaud your creativity with planning, finances and design. It confirms my belief that or needs are basic and the rest is often motivated by ego. Planning seems to be the key to your success. Congratulations. I only have one question. Did you work with an architect and how does the roof water collection work? Thanks, Mark

    Reply
  27. Joan

    This is what I’m doing, right now. No, it’s not in Hawaii. It’s in a rural area of SC, about 10 miles from a major city. But it’s being done. I’ve been through hardships, loss of a good job, etc. But I’m still doing it. It’s my dream to live simply, comfortably, and without a mortgage. All out of pocket, all being done with a minimum wage job. We aren’t a country where a “one size fits all” stereotype should be placed on any of us. That’s not how this country was founded.

    Reply
    1. Whitworth Deen

      Very well done indeed! I applaud U, Johnny! It is a happy casita and has just enough room to made do. I much enjoyed the film, but a bit of constructive criticism now politely offered: Johnny speaks very quickly, a form of West Coast English spoken by many young Americans. Many of us who are older and not from the West Coast simply cannot understand a good chunk of what is being said. Slow it down, please sir, so that others can appreciate what U are saying. Kindest regards.

      Reply

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