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Archive for September, 2011

The Beginning…

This is it. We’ve finally made the decision that Amanda, Bryan Paul, Mady, Jamyson, and I are going to move out of our 1500 sqft. house and build our dream house.

I built this blog so we can record our progress toward building our house, and plan to update it frequently with pictures, posts, and videos that will be a way for us to not only communicate the status to our friends and family, but also to be able to show our kids as the grow up what it took to build the house they live in.

We’ve been talking about it for years, but were never in a very good position to pull the trigger. I’ll be honest – I’m quite nervous about this because it is a huge undertaking and there are a lot of unknowns.

First, I want to be the General Contractor. The benefits of being our own GC is plentiful. We have much more control, more options, more creativity, and best of all… it’s cheaper! We can probably save about 30-40% if we are careful, and can build the house the exact way we want it built.

There is one significant drawback to being our own contractor (also called owner-builder). Financing. There are very very few banks that will loan to an owner-builder, and those that do typically require that we own the land free and clear, or have to put something like 30-40% as a down payment in addition to the 6 months PITI and closing costs. We just don’t have that money laying around!

I did find a broker that specializes in owner-builder financing. They require 6% of the building costs upfront, which is very viable. There is one huge condition: you have to have sold your house before the bank will even consider you. Ouch! That means that before I can even break ground I will have to sell our current house and move into a rental with no guarantee that I’ll be approved for the loan or that the program will even exist at that time. That’s a big risk to take.

Regarding the land – most banks won’t loan money to purchase land, either. No wonder the industry is in the toilet! I did find a possibility, and without looking further into the details, it looks like the conditions require a 10% down payment (no problem) with a 5 year balloon. Like I said, I haven’t looked into the details, so I’m not even sure it still exists, or if it’s the remnants of an old website.

This past 2 weeks’ events have really put things into perspective for me. I saw a ton of devastation when helping to respond to Hurricane Irene, and it really made me think: now is the time to put this plan into motion. It may not be the ideal time, and money might be a stretch at some points, especially since we’ll have to put a lot of it down for an upfront payment, but I want to start building our memories in the perfect house both Amanda and I have always dreamed about.