Thursday, March 17, 2011

Hope Rises

Well, the dream house fell through earlier this week when the owners raised the price $25,000. But there are five acres of fertile ground overlooking the river that just opened up 5 minutes from the farm. Forgive the italics, but I'm trying really hard to restrain my excitement and went for italics instead of exclamation points.

The price for the land is perfect.

But it has no well, no septic, and... well.. no house.

Anybody here ever built a house before? How do you afford a mortgage for your new place while still living somewhere while the house is under construction? What is the bare bones price you can build a tiny house? (including well, septic, permits, closing costs, etc.) We're already sold on investing sweat equity, but with limited knowledge and no homebuilding experience, we're kind of limited as to how much we can do there, too.

Even if you just have secondhand knowledge, any advice or tips at this point would be really nice.


Katherine said...

My parents are building a house. They signed a contract and put down a downpayment on the new house. It is only after the house is built though, after it is inspected, etc., and at the closing that my parents will pay them and then take on the new mortgage. They are going to try to time the selling of the old house such that they don't have 2 mortgages for more than 1 month. I don't know if all builders/banks would work that way, but that is how my parents are doing it. The downpayment was money from the bank and it was about 10% of the cost of the house.

My brother-in-law built a steel building house which is cheaper per square foot since it is a pre-set model you choose from. My husband thinks traditional frame homes nowadays run about $125 - $150 per finished square foot but he isn't sure. (my husband is a theologian but his dad and brother have worked in construction for decades....he just isn't sure if the price would be the same now as his last information.)

Kathryn said...

Well I've never done it myself, but our friends who did it lived with his parents until the new house was habitable. They put almost everything in storage and I know they couldn't start building until after they'd closed on the sale of their old home. Their blog of the whole thing is I hope it works out for you!

Molly said...

Hmmm. St Joseph perhaps? (I think I mentioned him earlier...) I'm not sure if you've been to our blog at all, but most of it is dedicated to our home building process. We haven't updated in a while because we've been living here almost a year now. :) When you're building a home, you take out a construction loan until the house is completely built. You take out amounts as they are needed, so it isn't like you're paying two mortgages (or a full mortgage and rent or whatever). We sold our previous home, moved in with my in-laws (God bless us, every one) and built our home. We could not have secured a construction loan in this market without first selling our house. I think you mentioned there isn't as much of a crisis where you live so I don't know how it would apply to you. It's pretty risky, even if the bank allows it. We do have friends who built recently who sold their old house and rented a town home while their new home was under construction. My husband is the expert on all the finances and I'm sure he'd have more to say. As for cost savings, sweat equity really can pay off. (See the blog for the projects we did ourselves.) We also had to have a well and septic dug. Our house is by no means tiny, but I think we cut every cost that was possible and practical for our situation and our design (which was done by an architect rather than a drafter). We had four children and the recent death of our fifth child when we put our previous home on the market. We now have five living children. You might be able to cut some corners that just were not practical for us in our situation. For example, we saved probably around 65% on our kitchen by installing an Ikea kitchen (appliances and everything). Oh my. I think I could go on forever about this so if you'd like to correspond privately, feel free to contact me. Do browse our blog. It might be helpful to you. Prayers. :)

Emma said...

I'm sure you'll know the right situation for your family when you find it! It's exciting to see another option open up so quickly though! We're excited for your futures.

One thing we've considered in the past is building a Lowe's Katrina Cottage. They're smaller, basic homes that range in size from 300 - 1800 sq foot. The plans are $700. When doing our research, we were getting information that it would likely cost around $20-25000 to build one about 1000 sq ft. Of course each situation is different, but the simple floor plan and straight forward building plans make it much easier to do a significant amount of the work yourselves, which would also save you money.

Here's the link off Lowe's website for the floor plans and FAQ.

If you're interested in doing some / a lot of the work yourselves, this might be a great, economical option with quite a bit of flexibility in floor plan sizes for your needs.

Also, if you're near a larger city right now, you might look into volunteering for Habitat for Humanity. You can get some great basic building skills from a few weekends of volunteering and learn the basics of framing and construction. That's one of our tentative plans for learning how to do work ourselves. And honestly, if you watch how most homes are slapped together these days, it's not a complicated process (though not easy of course) and doing a lot of it yourself will yield a much higher quality than in-town contractors building these spec houses day after day.

Good luck!

City Roots, Country Life

Jenna St. Hilaire said...

My family lived in a 25x8 RV through a Montana winter while we built our house, having hitched it up to well water pipes on the land and newly dug septic tank. We used pole construction instead of a foundation for the house, which I think was cheaper--at least at the time (this would've been about fifteen years ago), and dug the post holes ourselves, by hand. My little sister dug a 9x9x9 mechanical room with a shovel, almost single-handedly. (There were no rocks in that ground, thank God.) Mom went to the library for architecture books and drew up the plans herself. It also helped that Dad is an electrician. :)

Of course, one of the first things to happen in our first winter-in-the-new-house was two weeks of 40-below-zero-plus-windchill. The house wasn't fully sealed, and the pipes froze underground near their entry into the aforesaid mechanical room. It's one of the reasons we moved to a temperate zone the following summer.

It's possible, if admittedly a heck of a lot of work. You may be able to manage with a little more outlay of funds and a little less pain. :)

Annie said...

If you have a nearby Amish or Mennonite community you should get a quote from them. We built a simple house for very little by working with a 25 yr old Mennonite man and his 17 yr old apprentice. My whole family pitched in when needed. You never know until you ask!

Farmer's City Wife said...

Ooh... I like the route your parents are taking. That seems really really do-able. I'll have to look into that at our banks up here. Thank you for the info!

Farmer's City Wife said...

The in-law quarters are a definite (although last resort) possibility. It's good to know it can work, though :).

Karlab71 said...

I helped to design our friends from church a home 3 years ago and would LOVE to help you in any way I can. They lived with inlaws while building it themselves. They needed a design to accomodate 8 children at the time (they now are expecting #10!) and growing. The company that supplied the materials turned my design into the actual floorplans. They love it and are really happy with the design (30x60 ft with same sq ft in basement + 30x30 attached garage) They said that they would not change a thing, it works really well for their large family. If you WOULD like to talk, email me and I will give you my phone #. God bless, this is SO exciting! God never closes a door without opening a window! Pax Christi!

Molly said...

I sent a long comment last night and I don't see it here so I'm wondering if maybe it didn't get to you. Or maybe it was so ridiculously long that you decided not to post it here. :) Anyway, I see Kathryn linked to our blog. Let me know if you didn't get my comment and I can resend some of the information so you can see how we managed the payment situation, specifically regarding a "construction loan" and how it works. I just don't want to re-type if you already got the info. -Molly

Farmer's City Wife said...

Woah!! What a cool (in hindsight, but not in lived reality, I'm sure) story! That was some hole your little sister dug!
An RV hooked up to a well and septic for a while is a distinct possibility, if we could somehow loan one.

Farmer's City Wife said...

As a college student I helped (minimally) a family who was building a house, and they hired a lot of the work out to Mennonites. It was awesome. Sadly we're pretty far away from any such community :(.

Farmer's City Wife said...

Woaaah... that's a huge house! Well, our budget right now is about enough to rent us a studio apartment in NY for a week. :) Can you design a mega cheap little house? If so, let's be in touch!

Farmer's City Wife said...

My goodness! My husband and I spent hours perusing your blog last night :). What a dream house!!! It's gorgeous! I was drooling over your kitchen -- what a cheerful beautiful chic design.
I think our budget could probably build us a house the size of your garage :-D.
Good to know about construction loans. That gives us some hope of being able to stay here while the place is built.
I'm intrigued, sincerely, by the Ikea kitchen. I've only ever bought a rug at Ikea before (back when I lived in the city) and the place looked so huge and daunting -- it was scarily exciting. Does their stuff stand the test of time? I mean, will their kitchen cabinets still look chic and amazing 30 years from now?

Farmer's City Wife said...

Emma, I think you might be on to something huge. My mom actually e-mailed me last night to say that her sister and some of her friends were thinking about retiring into a Katrina Cottage. I'd never heard of them before.
My husband and I are going to Lowes tonight :-D.
And Habitat for Humanity -- what a GENIUS you are! That's EXACTLY what I need to do!
Thank you, thank you!

Molly said...

I think you'd be surprised how far you could stretch your budget. We are very blessed, but the most important thing to us was choosing a design that functions well for our family, our Domestic Church. We really love it here. As for the Ikea kitchen, their cabinets have a 15 year warranty. Some of their stuff is really funky. We like clean lines and simple design so I hope that many years from now our stuff doesn't look dated, but who knows? :) The appliances are made by Whirlpool for Ikea, so they're well made appliances. They cut cost by keeping the options very basic. There are no fancy features on my oven, for example. I've found that I don't even use the fancy features, so it wouldn't be worth paying extra for them. We have an Ikea in a neighboring suburb so we were able to do some shopping there (lots of our stuff is from there, actually). They do, obviously, have a website and you can actually design your entire kitchen from their site. Good luck. And do feel free to be in touch if you decide to move on this. :)

Farmer's City Wife said...

Good heavens, your kitchen will still be "in" for the next 100 years -- it's classically beautiful! I was just wondering, given the low prices, if the doors would still be hanging on in 100 years :). But I've done a ton of research now (as much as you can do in a morning) and by all appearances they're good and sturdy. I definitely think we'll try to go the Ikea kitchen route (if we actually build a house)! Thank you so much for tipping us onto this!
It's all still in such a hypothetical stage, right now, but as the novenas progress and this comes closer to reality, we'll definitely be in touch :).
Thank you, Molly!

Masha said...

Well, we're living on the completely undeveloped land we bought last year, in a 24' yurt, without electric, plumbing, can be done, and it's a lot of fun (for us, not necessarily for everyone). Land loans can get a bit more expensive than a normal mortgage, they usually have a higher interest rate and a shorter payback period. Sometimes, depending on the seller, you can get an "owner-financed mortgage" where you owe the seller directly and can work out easier terms.

There are a lot of "little things" that can add up: building a road, permits, testing, etc. But you also learn pretty quickly what is essential and what isn't - which is totally personal: we thought at first that a well would be first on our list, but here we are a year later and still not desperate to dig one..but then we have a stream and a nearby spring. Don't feel like you have to build a typical house right off the bat, if you can handle something more primative, go for it and then you have years and years to add on "luxuries". :)

Of course, this is just me, good luck with everything though!

Karlab71 said...

Seriously...I LOVE home design , it has been my hobby for YEARS. Though I am not trained, I know a lot about how to save $ in design and I can visualize how things will work together. When we bought our current home ( 5 acre dream hobby farm with a dairy barn on it...we fell in LOVE) anyway, it had a completely unfinished basement that I designed to finish it before we moved BIL sold it to us, and as he also owns a construction company, he finished our basement for us.

This past summer I designed an additon for my mom and brother ( he has schizophrenia) to move in with us whenever they wanted...they decided the time was right and the addition was built and they moved in in October...they love it and so doe we. The space is connected by a mudroom entry. So, seriously, email me with a list of your needs AND wants, along with some information about the land for orientation, and I will see what I can come up with. Our friends that built used a company that used SIPS, Structural Insulated Panels, and pre built rafters, which helped them considerably in the building process. Basement space and/or second floor is cheap sq can always build with the idea of finishing the extra space in the future.
Hope to talk to you soon!

Farmer's City Wife said...

Masha, I'm a city gal! I consider living without a good symphony to be a trial... I'm not sure how I'd do without electricity ;).
But I do enjoy reading about how you're doing it :-D.

Farmer's City Wife said...

I'll be e-mailing you soon :).

patty said...

We are in a very similar position as yourselves currently in that we are planning to buy 15 acres close by and build our "dream house" there. Here's what we're contemplating...

We will use half of our "nest egg" to put a down payment on the land, and the other half to have electricity run to the property, a lagoon put in, a gravel driveway laid, and build a steel shed that will be our temporary home/future garage. Then next spring we will sell our house (best time to sell, here anyways), pay for the rest of the land, move into the "shed house", and start building our home debt-free! God-willing.

A LOT of thought and time and seeking that peace that comes from only God has gone into figuring this out. Happy to share more details if it would help!

Farmer's City Wife said...

Our nest egg is more like a goose egg :-D.
Congrats on having such a great doable plan!! That's really exciting!

Eclare said...

i second the RV thing. i know, i know, trailer trash, but we picked one up for $2000 and lived in it for 10 months (with 2 small children) while traveling, then buying and renovating an old hunting cabin on ten acres. we saved thousands of $$ on rent, and have a plan to be debt free on our own land in 5 years. very liberating! and totally worth being trailer trash for less than a year! we will be selling the camper this summer, if you are interested. :)

secondly, have you heard of cob cottages? the book The Hand Sculpted House is a good place to start.

even if you aren't into cobbing, the book has great ideas for inexpensive (or even free!) building, avoiding buildings that require permits (under 200 sq ft), using natural materials, choosing the ideal building site, and avoiding debt.

and i just wanted to say that i'm so glad i found your blog last week! i "liked" you on FB, too. i hope we can meet in real life-- we are Catholics living in the NW (about an hour north of PDX), trying to do the natural life on our new homestead.

Farmer's City Wife said...

Debt free on your own land in 5 years? That's awesome! What an incredible blessing.

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