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Old 02-09-2010, 09:23 AM
 
3,257 posts, read 6,844,463 times
Reputation: 1311
Quote:
Originally Posted by nicantsam View Post
Hello-I am in the same boat. I have a home under construction, but I ran out of money to complete my home. Because of the way the market is, property does not have equity. How can I get money to complete the construction of this home?? My credit is not good at all. I had other homes that I had to short sell and also have several collection accounts. What can I do?
So do you currently have a construction loan? Who holds that paper? They should have an interest in getting the property completed. How did you run short...upgrades or cost over runs or what?
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Old 02-09-2010, 10:05 AM
 
Location: State of Superior
7,930 posts, read 7,542,390 times
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Construction loans are very hard to get these days...even if you have good credit. Most banks will not give you a construction loan unless you have an " approved general contractor" , that they can give draws too as the construction progresses. The Banks only wnat to float the loan for a short time, as they are mostly interested in you getting a CO...then a Mortagage...which the Banker will quickly sell off...to limit his exposure... This is one of the reasons Home building is slow now. It costs more to build new ( unless you are a huge general contractor building tract dwellings ) , than buying a completed home, which the market is over run with .
I am having the same problem as the other two guys. I am building as my on GC , with cash , and it is taking 3 -4 years to complete , but , I will get there...hopefully. I moved in without a CO , am living in construction, its uncomfortable , but atlest , I have a roof, walls, heat , and major untiities. It is nice knowing there is no Banker looking over my sholder...its not for everyone ...but it is working ...so far.
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Old 02-09-2010, 11:07 AM
 
3,257 posts, read 6,844,463 times
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Quote:
Originally Posted by darstar View Post
Construction loans are very hard to get these days...even if you have good credit. Most banks will not give you a construction loan unless you have an " approved general contractor" , that they can give draws too as the construction progresses. The Banks only wnat to float the loan for a short time, as they are mostly interested in you getting a CO...then a Mortagage...which the Banker will quickly sell off...to limit his exposure... This is one of the reasons Home building is slow now. It costs more to build new ( unless you are a huge general contractor building tract dwellings ) , than buying a completed home, which the market is over run with .
I am having the same problem as the other two guys. I am building as my on GC , with cash , and it is taking 3 -4 years to complete , but , I will get there...hopefully. I moved in without a CO , am living in construction, its uncomfortable , but atlest , I have a roof, walls, heat , and major untiities. It is nice knowing there is no Banker looking over my sholder...its not for everyone ...but it is working ...so far.
Sounds like a very risky way to go unless you actually have enough cash on hand to get 'er done.
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Old 02-09-2010, 12:00 PM
 
Location: State of Superior
7,930 posts, read 7,542,390 times
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Quote:
Originally Posted by TimtheGuy View Post
Sounds like a very risky way to go unless you actually have enough cash on hand to get 'er done.
You do not need to have a lot " of cash on hand" to make it work. A lot of sweat equity by doing the finishing yourself , savings by not paying rent , all add up . Enough if you are frugal , to fund the ongoing building.
What I do advise however , is one should have enough funding saved up at the start to get the major construction done. About 50 per cent of building a completed home , is the interior finish work, which a couple can do most of themselves. You do not need to be all that experienced , but it helps to have basic knowledge. DIY is very popular these days , for home improvements...its just a little more effort to direct this toward new construction , and finishing your home. The biggest problem always comes when you are in need of major items or trade services that you have not budgeted for....this is why I am going on 3 years. ( no credit cards used ever , if I do not have the cash , I wait until I do ). I will complete by this fall ,...and , this is not a starter home , but a modest 3,000 sq ft. retirement dwelling , very modern, very high end , 10 acres on a mountain top. If I did not have challenging site work at the start I could have cut a year off the building time.

I think this method will catch on more and more as funding gets more difficult for the masses. You can have in the end a home you own free and clear , that is twice or three times the home otherwise affordable. Not all that uncommon in other Countries , where people have had to be creative , in order to get what they want , that they could afford. For me its not having payments , and a comfortable retirement. Not being able to get a construction loan may have been a blessing in disguise , as , I have saved a considerable amount in markup costs, and interest , about 100,000 at this point. However , Like I said , its not for everyone , especially what I have done , but could work for a lot of folks , that could settle for a simpler site , and design..... Get out the tool belt , and say to hell with the Banker !
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Old 02-09-2010, 02:43 PM
 
3,257 posts, read 6,844,463 times
Reputation: 1311
Quote:
Originally Posted by darstar View Post
You do not need to have a lot " of cash on hand" to make it work. A lot of sweat equity by doing the finishing yourself , savings by not paying rent , all add up . Enough if you are frugal , to fund the ongoing building.
What I do advise however , is one should have enough funding saved up at the start to get the major construction done. About 50 per cent of building a completed home , is the interior finish work, which a couple can do most of themselves. You do not need to be all that experienced , but it helps to have basic knowledge. DIY is very popular these days , for home improvements...its just a little more effort to direct this toward new construction , and finishing your home. The biggest problem always comes when you are in need of major items or trade services that you have not budgeted for....this is why I am going on 3 years. ( no credit cards used ever , if I do not have the cash , I wait until I do ). I will complete by this fall ,...and , this is not a starter home , but a modest 3,000 sq ft. retirement dwelling , very modern, very high end , 10 acres on a mountain top. If I did not have challenging site work at the start I could have cut a year off the building time.

I think this method will catch on more and more as funding gets more difficult for the masses. You can have in the end a home you own free and clear , that is twice or three times the home otherwise affordable. Not all that uncommon in other Countries , where people have had to be creative , in order to get what they want , that they could afford. For me its not having payments , and a comfortable retirement. Not being able to get a construction loan may have been a blessing in disguise , as , I have saved a considerable amount in markup costs, and interest , about 100,000 at this point. However , Like I said , its not for everyone , especially what I have done , but could work for a lot of folks , that could settle for a simpler site , and design..... Get out the tool belt , and say to hell with the Banker !
Problem is that most cities won't let you move in without a CO.
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Old 02-09-2010, 02:55 PM
 
Location: State of Superior
7,930 posts, read 7,542,390 times
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Quote:
Originally Posted by TimtheGuy View Post
Problem is that most cities won't let you move in without a CO.
In our area ( UP Michigan ) , the County will issue you a " temporary permit" for an unfinished home , so you can move in. They require all safety and fire codes to be met however. I found that , if you befriend the inspector , he will let you slide on some of it, as long as you do not go overboard. It pays to get to know your inspectors from the beginning, a problem a lot of DIY folks forget about, and , wind up with a problem later. Its not rocket science , the inspections , I spent a lot of boning up on the codes ...before I started building.
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Old 02-10-2010, 08:04 AM
 
3,257 posts, read 6,844,463 times
Reputation: 1311
Quote:
Originally Posted by darstar View Post
In our area ( UP Michigan ) , the County will issue you a " temporary permit" for an unfinished home , so you can move in. They require all safety and fire codes to be met however. I found that , if you befriend the inspector , he will let you slide on some of it, as long as you do not go overboard. It pays to get to know your inspectors from the beginning, a problem a lot of DIY folks forget about, and , wind up with a problem later. Its not rocket science , the inspections , I spent a lot of boning up on the codes ...before I started building.
Here in the metro in the over regulated nanny state of MN you would not have a shot. Out in rural MN where they don't even issue COs it would probably work.

How are the snow totals up in the UP this year? I was up early in the season and trail conditions were ok. I am sure they are sweet by now.
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Old 02-10-2010, 10:53 AM
 
Location: State of Superior
7,930 posts, read 7,542,390 times
Reputation: 2176
Quote:
Originally Posted by TimtheGuy View Post
Here in the metro in the over regulated nanny state of MN you would not have a shot. Out in rural MN where they don't even issue COs it would probably work.

How are the snow totals up in the UP this year? I was up early in the season and trail conditions were ok. I am sure they are sweet by now.
I know , years ago I built in NC MTS., and the word CO was ignored a lot, so were inspections of which their were few. Here in Marquette County they are strict , by the book , especially snow load. Its 70 lbs , while most other places are 50 lbs sq.ft.

We are short on snow this year...so far... 120 inches , last year it was 200 by this time. Trails are perfect. The UP 200 dog sled races are coming up, yet , we will problem still have to haul in some snow downtown anyway. They do not get as much in the city center., warmer also. I am 4 miles out , and we get twice as much , 6 inches last night, just finished plowing....having fun, its dry powder !
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Old 10-14-2013, 04:39 PM
 
1 posts, read 452 times
Reputation: 10
It's Knuckleheads like Balvenie that make this world so unpleasant, the guy is looking for help in troubled times, lets remember we didn't create this situation with economy.God bless you Darstar for your kindness & information, people are not looking for a hand out, they're looking for a hand up! & not a beatdown.
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Old 10-14-2013, 07:36 PM
 
Location: State of Superior
7,930 posts, read 7,542,390 times
Reputation: 2176
Quote:
Originally Posted by omar1092 View Post
It's Knuckleheads like Balvenie that make this world so unpleasant, the guy is looking for help in troubled times, lets remember we didn't create this situation with economy.God bless you Darstar for your kindness & information, people are not looking for a hand out, they're looking for a hand up! & not a beatdown.
Thank you for the caring words. Even tho this thread dates back to 2010 , the fall out remains and is creating problems close to the way they were for new home buyers and builders back then. What could be worse today is the best or worst of both worlds with higher home building material costs, a shortage of choices , and the fact for many out there still are finding credit problems.
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