Investor · PA · Member since 2013 · 1k+ posts · 602 votes
9y
I would look at paying less than 150k. That would be 250/sqft when the national average is 125/sqft. Getting a prefab cottage or metal building might only be 10-35/sqft.
Is there room in the yard for a pre-fab? There are lots of very cool ones these days and you would just have to lay a foundation and could get financing on it (but probably only 50%).
If you're going for the carriage house over garage and can't cut the cost on it: You should be able to get a personal line of credit or another personal loan to cover the addition of the house, then refi into a new mortgage if it increases the value of the home (which it should). The rate might not be great but you'd be out of it quickly. If you don't want to do that because the loan on the current home is low then I think trying to get a higher HELOC is a good idea. Maybe have the house reappraised so you can up it? Maybe talk to a different bank that can offer a higher LTV HELOC?
Fort Collins, CO · Member since 2015 · 24 posts · 15 votes
9y
Thanks for all the advice. To answer everyone questions, the cost of the project is absolutely the best cost around, finding anything cheaper is unrealistic. I know this from getting three different bids from outside contractors, and getting two bids from contractor buddies of mine. Permit fees and utilities is what's really driving up costs.
Prefab is something I haven't considered, but remember this is a built above a two car garage, I don't think that's realistic!
The price of construction in the front range is a whole new animal.
Also, I'm a finish carpenter that's done similar projects. So I have a pretty good handle on costs. Costs have the potential to go down significantly as I will be doing the finish work, but I'm making my assumptions as if I subbed out everything.
Estimating costs by straight square footage is not a good tool for a project of this type, as it really doesn't account for tying in utilities, permit fees, raw water fees, or possibly adding a water tap.
But the good news is that the numbers still work for the project, so I'm still motivated to go forward.
So for financing, I guess the biggest issue is finding a HELOC that offers 90% LTV, which I haven't been able to find. If anyone has any advice there, I'd appreciate it, thanks.
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y
@Devan Johnson sorry I'm late to this as I was on spring break. Westerra Credit union will do 100% financing on a HELOC of your primary but I won't tell them exactly what you are doing as it might mess up their process. They also have low fees and costs. Sometimes you qualify for desk top underwriting (saves the cost of appraisal). This is for loans less than $100K. After you are done with your project. Convert the HELOC to a fixed rate 2nd position loan which is a standard animal that you can shop around.