All Forum Posts by: Shane Johnson

A "farmhouse shower" sounds like it would be the perfect place to wash the dog. And around here you could probably charge a premium for a "doggie shower"!

Oh it is. It works amazingly. I LOVE IT for that, as I own an 80lb doberman. And we all know how many pet owners there are these days. I definitely think if I finish the basement, that I am going to leave it in place, tile it as a utility/dog shower, and add a second shower tub in a separate bathroom area, as this one is located next to the laundry.

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Originally posted by K. Marie Poe:

A real bathroom would have to be vented as well. In an upper level bathroom, a window to the exterior is considered a vent. But I doubt you can get away with that in a basement, so you're looking at some kind of fan/vent to the exterior.

Yes, I agree, although it would be the least of my concerns. Vent fans are easy in comparison to moving any plumbing in the basement floor, and/or routing electrical, HVAC and plumbing to the attic. :)

The attic/pitch thing concern is real. You can't finish an attic and expect the appraiser to count it as additional square feet if you can only stand in the center of it.

I agree. I personally think it will not be that bad, and will be accepted by most around here as a nice large bedroom, 34Lx12W is a big bed room in the under 200k market here. Also, just shy of 5' wide is over 7', and roughly 6' wide is over 6' tall. Additionally, the dormer to the side would be used as a walk in closet, however it only is 7' at the peak, so yes, you basically could only walk in the center.

Finish or improve the spaces because you want it that way or have a need for it, or because it would rent for more.

I am also doing it for this reason, I plan to move upstairs to have a larger room, a walk in closet, and potentially create an office space for my business, or place another renter/roomate in one of the bedrooms on main floor. With two renters in here, my cost of living here would remain the same, my bedroom size would increase substantially, and my 2nd renter would pay off the renovations, with an ROI of 2-3 years, depending on amount spent on renovations.

I wouldn't do it for refinancing. Too many variables and you may not get the appraisal you are looking for after spending the money and time.

This would just be a bonus, and really motivate me to get the renovations done immediately. It also would be nice to know that if I dumped 10-15k in the upstairs, that I could pull it back out of the HELOC if needed. What I am really hoping for, is based on my assessment of local comps, and if I finished the upstairs into a 3rd bedroom, that it would comp out around 140-150k, with 80-85% LTV would give me a HELOC of 35,000-50,000. (my first payoff is 77K)

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Originally posted by Jon Holdman:

My copy of the IRC is at home, and your jurisdiction may use a different code. But IIRC the minimum area for a bedroom is 70 sq.ft., 7' x 10'. Of that, at least 50% has to be 7' or more in ceiling height. None of it can be lower than 5'.

Ok, so after reading what you wrote, and reading here, (http://www.ncrec.gov/bulletin/vol29-4bulletin/squarefootage.htm)
they only count areas that are 5 feet in height and above, as long as 50%+ is over 7 feet, regardless if my knee walls are at 3-4 feet, anything below 5 does not matter.

According to my measurements, my attic would have an interior finished height of 8 feet at the peak. With 5' walls, my overall dimensions would be 10'W by 34' L, or 340 sq feet (not sure if i need to subtract the stairwell at one end of room). At 7' height, I only have a finished width of 4.5', which equates to 153 sq feet. So technically, an appraiser would only consider double that as finished living area? 306 feet?

When an appraisal is done, the bulk of the value is in the ground floor. This may be different in your area, but around here, upper floors are worth maybe half the value of the ground floor and basements only 10-20% even if finished.

If market comps are listing and selling at $100 a sq ft recently in my area, an attic roughly would only add value of $50sq ft? (yes I know this is not how the appraisal is done, just looking for rough estimate of finished value.)

Half the value makes perfect sense, as an attic triangle is only half of the volume of a square room.

Further appraisers do not just do a $/sq.ft. Instead, they look at your place and the comps and adjust for the difference. That adjustment is a $/sq.ft. factor based on the difference. But that factor is only a third to a half of the $/sq.ft.

Yes, I understand how the basic appraisal process works, adding and subtracting positives and negatives in relation to comps.

These are pretty significant changes. You getting permits?

Would probably be a good idea I suppose :)

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Originally posted by JOAN DICKIE:

This is a good question for an appraiser to answer. In Wisconsin it would be considered a bathroom for the MLS description. If this is for a refi all that matters is the appraisers opinion.

Great info @Joan , it actually is in Wisconsin. Hudson. I have 1 year seasoning on my first this month, so when full appraisal time comes, I will be asking the appraiser about it.

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Originally posted by Dawn A.:

I have a "farmhouse shower" in my basement too. Way in the corner, a concrete shower next to the washer/dryer. I never use it!

I call it my man bathroom. I hung a curtain around the shower. My basement isnt too bad, the girlfriend likes it for her "business" when we are home. Shes polite like that, lol. I like it for the same reason, and it came in very very handy when it took me 2-3 weeks to gut my main floor bath to the studs and renovate :)

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Thank you very much for your input Michael, I have responded below.

Originally posted by Michael Siekerka:
So are you adding a bedroom in the attic and a bathroom in the basement in hopes that it will comp out with other functional 3/2's in the area? Are you going to be adding HVAC venting to the attic space as well? Putting insulation in?

Yes - I will be finishing the Attic as a full master suite, eventually. My initial intention is to just finish the attic into a bedroom, so the house is at least a 3/1. I was hopeful that a few minor improvements could make it a 3/2 on paper.

Eventually, I will add another dormer (above main floor BR), on the opposing side of current large dormer facing front of house, so that I can add a 3/4 bath in the future. This will result in a master suite with 3/4 bath and walk in closet. My priority first, is finish it into livable space, move myself upstairs and rent to a 3rd renter/roomate in the extra bedroom on main. I of course will be adding roof and soffit venting, vent tracks and insulation, running new electrical, HVAC, and eventually plumbing.

If the attic has a pitched roof, you need to make sure the height is tall enough to be counted towards the square footage. I ran into this property on a rental and it cost me at least 40K on the appraisal. I can't recall the requirements for being able to count the space, but you can probably dig it up on google or contact a local appraiser for a quick explanation.

This is a good tip, I had not heard of this. Pitch is probably between 8-10/12 if I had to guess with my limited knowlege and based on google pics. Center height, with flat ceiling will be over 7.5 to 8 feet. Ill research more on that, thank you.

As far as the basement bathroom goes, it sounds like you've got a ways to go for it to be an actual bathroom. Even if you do all the work of slapping up some walls and a door, appraisers are pretty restricted these days and may not add much value to your property for what amounts to a utility water closet.

Just a few things to consider...a 3/2 with 3 functional bedrooms and 2 functional bathrooms is typically worth a lot more than a 3/2ish with an attic bedroom and bathroom in the basement.

Understood, eventually this would be a 3/2 above ground, and potentially a non-conforming/office with walk in closet, utility room, LR and Full bathroom in the basement when it comes time to sell. In my eyes, it would be closer to a 4/3ish with finished entertainment living room, at this point. Until then, as a rental, I prefer to keep the basement unfinished, to avoid any potential waterproofing issues.

I'd try to avoid making valueless updates to your house just so you can borrow more money against it. At the end of the day if you make changes that a buyer would never pay extra for you're not in a good position even if you can dupe an appraiser into giving you some extra value.

My intention here is, instead of selling, to keep the property as a long term BAH, and recycle the HELOC for other properties. I could refund my initial out of pocket rehab costs with some of the loan if possible, as well as use the rental income of a 2nd roomate ( i have one already) to pay back the rehab capital borrowed from the HELOC. My projections put the ROI at 1-2 years depending on how much improvements I do.

Please keep the commentary and suggestions coming!

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My house right now is considered 2 Bedroom, 1 BA , However, in the basement, I have a toilet, shower and utility basin sink all plumbed in.

The shower is what we call in the midwest, a "farmhouse" shower. It is a basic shower head mounted on the concrete foundation, with a floor drain. Right next to that is a two basin cast utility sink, and next to that, a toilet. So what do I have to do to get this qualified as a bathroom? Just throw up some walls and a door? A friend mentioned I may need flooring down as well.

Any input is appreciated. I am looking at finishing my full attic, and doing anything else I can do, out of pocket, to get this thing considered a 3/1.5 or 3/2 , in order to get the highest appraisal possible, and therefore result in the largest HELOC I can get. Just making all the plans right now, and waiting for a few pending comps to close. Thanks in advance!

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ughhh. go figure. ill get my license some day... need a few flips under my belt first. You should start charging a few guys a fractional fee if the login can be used simultaneously, and have your dues covered ;) lol.

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what tool are you using? how are you creating these maps?

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To continue on/counter what Wendell De Guzman was saying....

You wouldn't see 60K profit. Say you sell at the high end of 135k, traditionally, using realtors. Deduct 8% roughly right there. so now your at $124k.

Not sure on your local tax rates, but lets be conservative and assume 40% taxation since you havent owned 2 years.

Here's how it looks in my head - (anyone correct me if off):

Sell at $135k - 8% closing/commissions = $124,200 - $67,000 Mortgage = $57,200 - $22,880 income/cap gains tax = $34,320 Profit.

Unless you can find another property to buy immediately, and 1031 exchange your profit, you are giving ALOT to Uncle Sam.

Here is another scenario that COULD be possible -

House appraises at 135k , and you are able to secure 80% LTV (some banks go 85 or 90% , may have to dig hard to find) HELOC:

$135,000 - 20% = $108,000 - $67,000 mortgage = $41,000 Home equity Line of Credit.

Even at $125k appraisal, you yield $33k Line - which is close to your cash yield on the sale... and you still own the property.

Rent it out for market rents (i would hope is close to 1000-1200 a month) which should be close to covering your original mortgage and your line payment, depending on terms. Use the line of credit to buy flip/rehab a house. pay it off. Rinse and repeat.

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All Forum Posts by: Shane Johnson

Shane Johnson has started 10 posts and replied 182 times.

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: What qualifies as a bathroom?

Post: Is your RE market really hot? Perhaps not.

Post: Is your RE market really hot? Perhaps not.

Post: To sell or not to sell? that is my newbie question....