Whaddya think of this plan? (Long)

In My Humble Opinion
21

To reply to a couple of things:

A pretty substantial part of my wife’s and my “deal” has her dealing with the lion’s share of “home” issues while I’m at work. Plus, I’m generally a lot more willing to accede to her preferences/choices with limited input than she is to mine. Finally, she finds that every once in a while she needs a break from bon-bons in front of the soaps! :stuck_out_tongue:

Re: a 2000 sq ft bungalow. It seems bungalow means many different things to many different people - whether they are in India, the bungalow belt of Chicago, the Pacific NW, or southern California. And I’ve read numerous books chronicalling “bungalows” far larger than 2000 sq ft.

I was using the term primarily to describe a style/appearance - low slung, one and 1/3 stories, front porch, wide eaves and exposed structure/detail. My wife’s and my favorite house styles are craftsman bungalows and 4-squares. Toss in some elements of cottages and farmhouses - we aren’t slaves to any particular syle.

You probably don’t know my town as well as I, but I assure you a 2000 sq ft home would be just about the smallest new construction the town has seen in a decade. Our current home has 5 beds, 2.5 baths, LR, DR, kitchen and FR, and is under 2k sq ft. We absolutely do not need any more room, tho we would configure it differently. We’re thinking 4 beds, 2.5 baths, unfinished basement.

Also, my understanding is that there are certain economies that come into play when building. I.e., if you are building larger than a certain size, it is incrementaly very inexpensive to add space up to the next point at which costs jump. But I don’t know the specific numbers.

If you think 2000 sq ft is too large to be considered a bungalow, then feel free to describe my plans as bungaloid! :cool:

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FWIW These homes exhibit many exterior details that appeal to my wife and me. They also have a “small home collection”.

23

Personally, I’d find the lot too small (it’s only about 1/3 of an acre!), but I’ve had dinky houses and big lots. Having the cemetary and forest preserve would help make up for that. I think the biggest concern would be getting your wife on board with it. After all, you have to live with her. Money will resolve itself somehow (although I wouldn’t start building until you’ve sold your old house).

How much trouble would it be to do some renovations on your existing house, making the kitchen bigger and adding a front porch?

StG

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Biggest issue is we are on a busier street than we’d like - which would be tough to fix!

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One issue that would be a cause of concern is that your wife isn’t completely on board and that a massive undertaking like this will put a huge strain on your marriage because of all the stress, especially with her not being 100% on board, and being the one who will do the lion’s share of dealing with contractors.

Part of me thinks that this would be awesome to do. You get the house of your choice custom built to your specifications with the trim that you want in a location that you want.

Have your run the construction cost numbers?

26

I agree with all you say.

NO WAY am I going to try to push my wife into something she doesn’t fully support. But, I think this is at least an opportunity that needs to be examined closely before rejecting. If it turns out that we assess this situation very differently, that may suggest something about our ability to agree on any move in the future (barring winning the lottery, which is not likely as we do not buy tickets!)

Numbers look doable to me. I’m not sure how much of her disagreement is due to her anxiety over the current economy/markets. Bottom-line is we would most likely end up carrying some amount of debt. Which is something we have generally tried (and succedded) to avoid.

I guess I don’t see a couple hundred $K mortgage as the worst thing in the world, given my salary ($100k+), job security, and all. And I think an insistence upon avoiding all debt unnecessarily limits our flexibility/options.

Very rough numbers:

Current home owned free and clear - should net $500k.

Take home equity line for $150k to buy lot. Maybe $160K to cover taxes and interest on loan for a year. Tear down existing home on lot to reduce taxes on vacant land.

Put current home on market. When it sells, pay off equity line on lot, reducing net to $340k.

Rent apt $1500/month - $18k/yr - reduces net to $320k.

Green light construction. Assume construx costs of $500k (2000 sq ft at $225 per).

Should be able to end up in new house financing < $200k.
-if we apply entire $320k from sale, mtg = 180k. -could hold back some for college costs.
-builder roughly estimated building costs of $200/ft. 2000 at $200 = $400k, which would reduce mtge to $80k.

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  1. You’ve talked about how you want to live in other parts of the country, like Boston or the Pacific Northwest. Are you sure that you want to buy land in Illinois rather than waiting to see if you might want to move when you retire? I’d probably take a vacation with your wife to see if these areas still interest you rather than jumping into the IL market just because you like the forest preserve. If you like Boston, it wouldn’t be too hard to settle in lower New Hampshire, unless you have a deep desire to be very close to the city. There is ample forest in other parts of the country.

  2. I don’t really think the financial part is that bad, it just seems far riskier than you and your wife are used to, which combined with the crappy economic news seems to be stressing the both of you out, or maybe just her.

Maybe this is not the way you want to go-but have you considered keeping your kids’ college funds in the market, waiting for the market to come back (keep in mind your youngest has 4 years and I think your son still has a couple, right?) having them take the max in federal loans, then paying the amount you want to give them after your portfolio bounces back?

28

Move toTennessee. Buy this house for the same money and have 5 acres and a huge porch. It’s probably near a Civil War battlefield, for the re-enactors in your family.

Or this one.Look at those views. And how can you resist living on “Dismal Hollow Road”?

Hmm…this house is in my town. Although I’m using the word “town” somewhat liberally. There’s a blinking light at one crossroad!

StG

29

Thinking of Building a House – Am I Nuts?
**
Jodi**, if you’re reading this, did you buy the lot?
[/QUOTE]

No, but thanks for asking. :slight_smile: I was persuaded that it would be more work that I really wanted to sign up for. Funny you should mention it, though: I made an offer on a house yesterday. Realizing that this might well be a mistake with a capital “M” in this economy, I made a low offer. The realtor does not think they’ll take it, and I’m not willing to move up much, so I’m assuming it won’t work out though I haven’t heard back yet. I’m in an apartment so it’s not like I have to move anyway.

30

Yeah - I’ve considered it. Of course you’re presuming the market WILL bounce back … :stuck_out_tongue:

Eldest has 1 year, 2d 3, and youngest 4. We’ve told them that while we’d always like to be able to help them out we are not guaranteeing anything towards grad school. Hell, then we’ll undoubtedly have at least a wedding or 2 …

Actually, if we wanted to borrow for college, we could get a line of credit on our house far cheaper than the kids could borrow. So the question is, do we borrow the money now, before spending down the “depressed” stock, and gamble that the stocks will at some point increase in value sufficiently to make up for the loan costs?

Right now - presuming we stay in our house - the plan is to try to cut expenses and save as much as possible over the next 4 years to pay straight to college. Then we’ll sell stock/bonds as needed as college costs come due. And when/if they run out, we can borrow on our house at that point.

Regarding moving - most of those thoughts hinged on job relocations, none of which came through. I could pursue a couple more if I wanted, but neither of us are too terribly motivated to do so. Yeah - our current town sucks, but we’re pessimistic eough to presume everyplace else would suck too - tho perhaps in different and novel ways. :wink:

More seriously, any relocation would likely be influenced on wherever our kids ended up.

31

Does your wife want to be on a forest preserve? That kinda sounds like it’s more your thing, so you can go down to the preserve and walk the dogs. You don’t have to back up to unoccupied land to get peace and quiet, maybe you want to be on a street with large lots and attracts folks with the same mindset. Here you’re not even getting the big lot that you want. She wants a big kitchen but she can get that almost anywhere.

I guess I’m not seeing why this is indicative of any sort of inability to agree. There’s lots of middle ground here, you could live on a preserve but drive to the train in the morning. Or just give up on the preserve and get a big lot, etc.

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By net, I’m thinking you mean net of sales expenses, commissions, encumbrances and taxes. If you’re basing the taxes on the current capital gains rate, you might want to inquire about the potential that the capital gains rate might change to ensure that you’re applying the correct capital gains rate to the taxes in your calculation.

Since you’re starting with the $500K figure as the start of the calculation, it could be important to get it as close to the actual figure as is reasonably possible.

As far as the rest of the project, I think I share a lot of other people’s concern in this thread that your wife’s input and level of excitement over this could be the deciding factor.

33

Thanks everyone for your thoughts.

If I were a betting man (and I am) I’d give long odds that this is not going to happen - at least not right now. But I still wonder if this isn’t a time to be moderately aggressive in this respect. I think we agree that we want to be somewhere other than in this house 5 years from now. I quess the question is whether it will be vastly more convenient/affordable to do it later rather than sooner. And there is no way to know the answer to that question for sure.

I may have said things to suggest more difference between my wife and I on this particular topic than I believe exist. I think we would agree that 5 years from now we would love to be in a home built by this one builder. Of all the things we disagree on, they fdon’t include the decoration, arrangment, and maintenance of our home. And I’m sure we would agree that we would like to live on a quieter street than we currently do, where I can walk to the train and we can walk/bike to at least some things. We very much like nature and walking our dogs - so the idea of a larger lot, open space nearby, and such appeals to both of us. Really, the only 2 issues with this particular lot are whether it is too narrow (our last 2 homes have been on 50x150 and 50x200 lots) and possibly whether the area has drainage issues.

I think the bigger concern right now is financial. If we had the savings we had last fall, I believe we’d be all over this lot - or perhaps even buying a pricier one. A couple of years ago, a buildale lot in town cost $300K. This lot at this price is purely a reflection of the economy. If we wait until the market picks up, I am confident we will not be ale to buy a lot like this anywhere near the current price. But if we are more comfortable waiting a few years and then paying a significant premium for that comfort, so be it. It’s only money, and I can always make more!

It is interesting, tho, with the kids all heading off to college how it really frees me/us up to think about how we want to style our future. It is weird, after 20+ years of being a parent during which we’ve striven not to be “selfish” it cost to our kids’ development. Now we feel as tho we are on the brink of having the pendulum swing back, where our lives will be more about what we want, instead of primarily preparing our kids for life. (I know I’m not phrasing this too well, so I’d be happy if folks refrained from seizing on this paragraph to explain how fucked up my/our values are.)

Another interesting aspect is the shift between complacency/inertia and urgency/activity. In many respects I tend to be the laziest sack of shit you know. Pretty content with a “comfortable” life. Don’t challenge myself to accomplish and grow. My wife tends to like her comfort as well, tho perhaps is more motivated than I. But then when I convince myself to consider a change, I tend to get all “Let’s do THIS, NOW. Why even TALK about it if we aren’t going to DO it!” I guess I tend to not enjoy the process of deciding too much, and just want to get to the next stage of contentment. And I tend to be coplacent that if we assume manageable risks things will work out somehow.

Whereas my wife perhaps tosses out “ideas,” with less thought of acting on them immediately. And when action is imminent, she may tend to become more hesitant to pull the trigger than I.

I think I’m exaggerating the difference between us in this respect. We both realize that we have it very well right now, and a large part of us resists the effort involved in making a major change - even if we can intellectually see that it might get us to another very comfortable place.

Like I said, thanks for all the thoughts I’ll let you know if anything significant happens.

34

Just got word from our possible builder. He checked out the area and said he knows the adjoining house has water issues, so he wouldn’t recommend that lot.
We have a history of concern over water in our past 2 houses, so that is mst likely sufficient to put the kibosh on this particular plan. Oh well, as I said, inertia is generally my preferred path! :smiley:

35

Being someone who has looked at a lot of lots I have to say your experience is not unusual. Some people drive up to a lot and are sold on it before even stepping out of their car, but there are a number of factors to consider before purchasing a piece of land. If you have the luxury of time (and money) you can do a lot of testing, such as the water issue you mentioned, to see what it means to the overall cost of the project. In my case I had to spend money investigating seismic issues for a lot I was buying in California.

Sure prices are down right now, but you have to do the same due diligence you would do no matter what the price is. A lot may only be ~33% of the cost of the entire project, but a bad decision can really cost you down the line. We ended up in a lawsuit that took years to get resolved. Fortunately we won, but it cost us $100K to litigate.

So talk to a knowledgeable agent who is experienced with land purchases to really understand the pros and cons of any particular lot. There is no perfect lot, but there is probably one out there that will suit your purposes and fall within your budget. Take the time to investigate as much as you can before you make the offer. Once the offer has been accepted and escrow closes it’s very hard to unwind things if you find an issue down the road. Trust me on that…

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Good advice. Thanks.

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I will tell you that as an Architect—building your own house is one of the most stressful things you can do, especially to a marriage. Unless you and your wife are 100% in line in decision making, you will cost yourself a lot of money.

You said you wife would bear the lions share of dealing with the contractor—IF she is excellent at making decisions AND sticking with them that could work. But if she wants/needs time to think it over, or won’t make the time to be there when the contractor needs a decision, it will cost you lots of money.

I will say I have seen many couples build their dream home, fight the entire time and then get divorced once the house is done :smack: Just something to keep in mind, I really can’t stress the amount of pressure this will bring to your marriage.

Well my wife and I are/were in a similar position and are roughly the same age a as you and your wife. We live in a nice home that she had when we first got together on a little over an acre. Purchased a 5 acre lot nearby to build a house on. I even went so far as to draw up the plans (I am an Architect) and then last fall—got cold feet. Damn glad I did too :slight_smile: I would be in the middle of it right now and I don’t think I would be that happy right now, given the current market for Architectural services! Let’s just say things are a little slow right now for me :slight_smile: So we are just going to hold onto to the land and sell it later.

edit–ah–I see you have water issues. Enough reason there to pass on the lot

Another big factor for us–we both really hoping to retire within 10 years or so. And having a mortgage isn’t something we want in our future. We have some good friends who just built a house (2 years ago) and now are both retirement age and frankly can’t retire. They can’t afford to, something to keep in mind.

38

I’m a wage slave - and tho I couldn’t care less about my job, it isn’t really unpleasant on a daily basis, it brings in good coin, and it is very flexible. So while I’m not going to hang around longer than I need, I’m not is a rush to retire. Already able to hit the golf course more frequently than most of my buddies.

My wife and I are - um - displeased with so much else we see going on in society - both locally and on most progressively widening scales. But we seem to agree an many/most aspects of what we consider a comfortable home. I guess the question is whether we wait a few more years until we retire to achieve that (whether we have to move to Tennesee! :p) or whether we try to swing it in the nearer future.

Every year we wait will probably make it an easier decision, as we will have less need for room to fit kids coming and going from school and such. But then we will have that much less time to live in our new home…

And the finances really toss a wrench. Trying to buy and sell at the same time. What I can imagine us doing is just putting our house on the market in maybe 3 years. Then when it sells, just rent somewhere for however long it takes to either find just the right house or building site.