Practice the payment: where we are after September
Founder ask (iMessage 2026-09-30 20:24 ET): scenarios for down payment, loan amount, interest rate and monthly payment, in a table to show Michelle; a second table of square footage vs build cost; how far off we are; low-hanging fruit.
Bottom line
- September (Monarch): +$1,047 (income $13,506, expenses $12,459). Matches the founder's "a tad over $1k".
- At today's rates and realistic South Tampa build costs, the new all-in payment for ~3,200 sq ft is about $14-16K/month, a gap of ~$9.5-11.5K over today's $4,527. The tracker's +$5,500 target assumed $300/sq ft and ~6.6% rates (June); both have moved against us. The target needs resetting once a builder quote exists.
- The bigger wall may be the lender, not the practice test. Lenders limit housing to ~36% of gross ($9,750 on $325K) and all debt to ~43% ($10,611 after the $1,035 car). The 36% limit binds: max loan ~$1.0M at 7-7.5%. Qualifying for 3,200 / $400 needs ~$0.80-0.98M down. (The June brief's $1,155/month "Loan Repayment" line was $70 in September.)
Table 1: financing (base case: 3,200 sq ft at $400/sq ft → ~$1.56M project)
Loan = project + $414K payoff of today's mortgage − cash down. The lot (~$900K, estimate) is the main equity; cash down is on top of it.
| Cash down | Loan | Rate | Principal + interest | Tax + insurance | All-in / month | vs today ($4,527) |
|---|---|---|---|---|---|---|
| $100K | $1.87M | 7.0% | $12,454 | $2,836 | $15,291 | +$10,764 |
| $100K | $1.87M | 7.5% | $13,089 | $2,836 | $15,926 | +$11,399 |
| $100K | $1.87M | 8.0% | $13,736 | $2,836 | $16,573 | +$12,046 |
| $200K | $1.77M | 7.0% | $11,789 | $2,836 | $14,626 | +$10,099 |
| $200K | $1.77M | 7.5% | $12,390 | $2,836 | $15,227 | +$10,700 |
| $200K | $1.77M | 8.0% | $13,002 | $2,836 | $15,839 | +$11,312 |
| $300K | $1.67M | 7.0% | $11,124 | $2,836 | $13,960 | +$9,433 |
| $300K | $1.67M | 7.5% | $11,691 | $2,836 | $14,527 | +$10,000 |
| $300K | $1.67M | 8.0% | $12,269 | $2,836 | $15,105 | +$10,578 |
Rule of thumb: every $100K more down ≈ −$665/month; every 0.5% of rate ≈ ±$600/month.
Table 2: square footage vs build cost
Project = hard cost × 1.10 (contingency) + ~$150K soft/site (Ray estimate, unsourced; replace with the builder's number) (demo, architect + engineering, permits, AE flood-zone elevation, utilities). $/sq ft is hard cost; 33629 custom runs $400+ (June brief).
| Heated sq ft | $350/sq ft | $400/sq ft | $450/sq ft |
|---|---|---|---|
| 3,000 | $1.31M | $1.47M | $1.64M |
| 3,200 | $1.38M | $1.56M | $1.73M |
| 3,500 | $1.50M | $1.69M | $1.88M |
Reference points: 3,000 sq ft at $350 with $300K down at 7% → all-in ~$12.0K (gap ~$7.5K). 3,200 at $400 with $800K down (cash + investments) at 7% → ~$10.6K (gap ~$6.1K).
How far off, and the levers
Gap for the base case ≈ $10K/month; September delivered ~$1K.
| Lever | Monthly | Notes |
|---|---|---|
| September baseline | +$1,047 | Car payment landed late in the month (Mercedes $1,035 in Sept). |
| Pause 529 + Trump account | +$1,250 | Founder raised it. He dislikes it but called it worth the conversation. It moves college money to the house, so the pause must last as long as the payment. Check Florida Prepaid's skipped-installment rules. Our view: pull it last. |
| Cut RDCO-era tool subscriptions | ~+$1,300-1,500 | Sept: Kit $429, OpenAI $415, Grok $300, 37signals $179, Google $129, Snowflake $46. RDCO is dormant. Anthropic $200 runs Ray (keep). Line-by-line call is the founder's. |
| Third-paycheck months + bonus, counted as savings | ~+$2,250 avg | Already the plan (2026-09-23); lumpy, not monthly. |
| Cert raise | ~+$300 | Snowflake GenAI passed 2026-09-28. |
| Subtotal | ~+$6,150-6,350 averaged | ~+$3,900-4,100 in a month with no third paycheck or bonus; $1,250 less without the 529/Trump pause. Still ~$3.5-5K short of the base case. |
| Smaller / simpler build | −$1,900-2,100 off the payment | 3,000 sq ft at $350 vs 3,200 at $400, same down payment and rate. |
| Rate | ±$600 per 0.5% | Jumbo rates rose ~33 bp last week (7.0-7.6% quoted 2026-09-30). |
| More cash down from investments | −$665 per $100K | Costs capital gains and growth; the only lever that brings the loan toward lender limits. |
Read: the subscription cut + 529/Trump pause + sweeps + raise gets to about +$6K/month averaged, on one month of evidence. That comes within ~$1.2-1.4K of a 3,000 sq ft / $350 build with $300K down, but the $1.42M loan fails lender limits; qualifying needs ~$520-700K down. The 3,200 / $400 base case is further off on both tests. A real builder quote and a lender pre-qualification are now the two inputs that decide which table row is real.
What could make this worse
- Qualifying for 3,200 / $400 needs ~$0.8-1.0M down: about all of the ~$0.8M cash + taxable investments (June brief). That leaves nothing for rent during the build or the 6-month reserve.
- Savings ranged from +$6.5K to -$8.5K, Feb-Aug. The clock needs six straight passes.
- The bonus is not guaranteed.
- Lot + project is ~$2.46M; area new builds sell for $2.0-2.3M (founder, August). The appraisal may come in below cost.
- Stop line: a pre-qualification under ~$1.2M means 3,200 / $400 needs ~$0.8M+ down.
Assumptions (all estimates; replace with quotes)
- Lot value $900K (no appraisal). Today's mortgage payoff $414K (Aug 2026). Today's payment $4,527 (Rocket Mortgage, Sept Monarch).
- Rates 7.0 / 7.5 / 8.0%, 30-yr fixed. Sources: Fortune 30-yr jumbo 7.603% (2026-09-30), Bankrate jumbo 7.04% (2026-09-30). Construction-to-perm usually prices at or above jumbo.
- Property tax 1.1% of (lot + project) ≈ $2,253/month; insurance $7K/yr (≈$5K new-build homeowners per founder 2026-06-04 + ~$2K flood, AE zone, estimate).
- Michelle's income excluded from the practice test (founder ruling 2026-08-30). Lender qualification math uses household gross $325K because lenders will.
- Not included: 12-18 months of rent during the build, interest-only carry on the construction draw, moving costs.