fish and CHIPS

In an earlier post, Weekend Work 3.9, I talked about how B and I worked on chipping up about 1/3+ of the brush pile that resulted in about 15-20 yards of mulch.  Well, that pile hasn't moved and I needed to get it  completed because that area would need to be clear when I start the build.  The weather has been so awesome with lots of dry days so I talked John & Bef to come up and help us ... Sasquatch (aka S) also surprised us by coming out which turned out to be so beneficial.  

With all of us working, we accomplished more in three hours than B and I did in eight hours.  Two people were always feeding the beast and all the others were pulling branches and piling right beside the chipper.

Always has to have the camera on her, Bef

The place I rented the chipper from last time wasn't available so I had to get it from Home Depot.  Not only does it chip, or rather shred into larger pieces, they wouldn't match coupons or discounts.  I ended up paying about $50 more and the quality of the chips are much worse.

We'll end up using this pile more on the pathways and in the landscaped areas in the trees that isn't right beside the house.

The pictures don't do it justice.  The pile is over 6' tall and 30'+ wide with probably 40-50 yds of mulch.  Amazing this whole area in the picture surrounding the mulch pile was a massive pile of branches and is now gone.

Want to Spall

You probably remember seeing those 4"-8" angular rock on driveway entrances to new construction.  Those are required as a means to knocking off dirt/debris from vehicles before they leave the property.  These rocks are called quarry spalls (crushed basalt)

 My site plan calls for having an entrance a minimum of 15' wide, 20' long, and 12" deep of quarry spalls (4"-6").  I think I brought in at least 20 yards to cover the area and ended up going a little longer on the drive anyway.

 I used the excavator with the 3' bucket to scrap down about 12" and then used the blade to level everything out.

I tried using the mini-ex to grab the spalls and spread out but it made it tough to grab without pushing the bottom layer into the ground.  So I ended up using the dingo to scoop up buckets and then I could control the dumping as well.  After I was done, jumped on the mini-ex and rolled back and forth until pretty flat and level.

Construction driveway entrance completed

The Appraisal Arrives

Sorry it's been awhile since I've posted but have very busy with work and working all the details on the house build.   I will start posting updates tonight but will start with the appraisal.

I told the bank to just give me a phrase "the eagle has landed" if it is good news when they hear.  Well, they sent an email with the appraisal and it said "you better sit down for this one" .... so you can guess where this is headed.  I was already sitting so I opened the email and the appraisal was like 30 pages long so I scanned quickly toward the bottom (thinking the value would be listed there) and couldn't find it.  Went back to the top and started reading - the value was $3,000 over what we wanted and everyone including the bank truly expected it to come in $30-$50k undervalue.

All I could say was Thank you Lord.  I was trembling inside because it was a miracle it came in so high.  God is great!!

Evidently the bank has internal appraisers that also review it to make sure it is legit and can stand up to any scrutiny by upper management - they said the guy did a professional job and the lengthy report was because he had some much supporting evidence.

Now that hurdle is behind us and the bank wants updated financials of everything to finalize the construction loan.  I also tweaked the numbers as I had to put the provide the last budget to the bank.  For each line item (there are about 50), I had to state the total amount, the amount I am paying in cash, the amount the bank is funding, the amount the bank isn't funding.

For example, under the landscaping line item:

$30,000 budget
$5,000 I'm paying out of pocket (counts toward my overall down payment at the end)
$15,000 Bank is funding
$10,000 Not being funded (sweat equity I am doing)

I think putting the budget together (my detail one has over 400 lines) and the detail list of materials probably took me at least 40 hours to put together.  So glad it is done and hopefully all my work will keep us on track.  I've already found about $20k that I will be able to save by negotiating and bundling.

Initial Appraisal Meeting

Well, the bank submitted all the info the appraisal group who then requests an appraisal ... from a group that they (my lender) aren't allowed to talk with directly because of all the new regs.  It was submitted on the Mar 29 and it got assigned to someone the following Monday - given the day (April's Fool), I was hoping the joke wasn't going to be on me.  On Tue, I was notified who the person was and he should be contacting me soon.  Looked him up online and it says he has been doing it for 20 years so hopefully that's a good thing.

He calls me on Wed and wants to schedule a time to look at the property.  I try and push to meet immediately because every day of no action is a day missed of build.  He says he can't meet until Monday, Apr 8.  I'm bummed that nothing else will get done this week and it means that I wont have the appraisal until probably Apr 12 at the earliest :-(

I meet with him at 10:00 and he was on time - I don't like it when people don't show up or are late (without calling).  He takes a couple pics of the road and we walk down the access drive and stop near the corner of where the workshop is going to go.  He asks a couple questions about the landscaping I'm doing since it is quite extensive - $5k in trees/plants, 100' pondless waterfeature, koi pond, 30tons of weathered limestone boulders and ledgestone (shipped from MO),

 


Here is a picture of the limestone in a water feature:

and 7tons Montana slate flagstone (Here is a picture of the stone I put in at our current house)

He asked about the well and septic location and then about the workshop.  That was it -13 minutes on site.

To be honest, I was a little concerned because he was there for such a short time and everytime I tried to ask about the process, he didn't really respond.  Perhaps he can't say but whatever.  Before he left he asked how long I would take to build ... I said "well it depends on the appraisal.  If I get a high enough one then 4-6 months, if I get a low one then perhaps 12 months or so"

Because there are no comps anywhere around the area, especially for a custom house they are expanding the range to include most of the county and the eastern part of the neighboring county.  I hope there are some good custom house prices out there.

I updated my budget to include the workshop (and some of the contractor bids for framing/foundation were higher than originally estimated) and the appraiser wanted copies of those as well.

It's out of my hands at this point.

Construction Loan Ordeal

Well, it's been a while since we have done any work out at the property but I have been crazy busy working on the financials.

Since we are doing an owner-builder (OB) build, it severely limits our options for obtaining constructions loans (CL).  Several months ago, I pretty much called every bank around ) so I thought and while many do give CLs, most don't allow OB ... meaning we have to hire a general contractor.  Since we are going to be doing a lot of the work to save money, we don't want to have to hire a GC and pay the 15-20% fee.  Well, there is one local bank that is OB friendly and have been talking with them over the past three months to work out the details. 

They only lend 80% but the cool thing is that they give credit for sweat equity.  So, we only have to pay 5% out of pocket cash and then 15% can either be cash or labor equivalent - so cool!  From the initial budget I started back in Jan, it has grown significantly ($$$) as I get more refined on the numbers.  Currently the house is definitely above the amount we wanted to borrow and is on the very upper end of what I wanted to pay monthly ... but can squeak it out knowing (hoping) that our current house nets us about $25k extra after the sell.

The original plan was to submit for permit mid-late Feb and it would take about 6 weeks to get through the process.  Then I would submit for CL and be able to break ground mid May with framing starting early Jun.  Well, that plan is blown.  The final construction docs and engineering took longer than they thought so I  knew I my timelines would be getting crunched.

Three weeks ago, I went in to meet with the bank to see about having the permit and CL process run in parallel.  Our credit reports came back over 800, we only have one monthly payment, all the construction docs looked great so we were ready to pull the trigger .... but the bank changed their CL package slightly.  Due to the size of the loan, the permanent conversion (and interest only calcs during the construction phase) is 5% at 25 years and I estimated my budget on a 4% / 30 yr.  They will give the money but my monthly would be hundreds more, not good.

I started scrambling and found two other small local banks (about 40m away) from searching other people's build blogs.  Called them and thought I had a much better solution.  They use internal appraisers (1/2 price), rate is set at beginning with one closing costs - currently 4.25% / 30yr, and lend only at 80%.  I downloaded the application, get all the paperwork required, and am really excited.  That didn't last long though :-)  I asked them about the 20% that I have to pony up and they require me to put that much in cash into an account during the entire build.  That means they don't give credit for sweat equity and when we are going to be doing electrical, plumbing, flooring, .... that is alot of money. 

Trying to be creative, I asked if I put up the cash and at the end, I had cash left over, can I get it back.  In essence, that would mean they would be giving credit for sweat equity without officially allowing it.  The bank manager said I could make a pitch to the underwriter and have a really good case give our current financial state (almost no debt, credit rating, etc).  Well, the only way I could get enough cash is tap into my 403 account (which is something you never want to do).  I was only willing to go this route if I would get the cash back and I could put back into the 403 account.  Turns out I can pull the money out and while it qualifies (for house purchase), I'm still penalized by the government.  They used to allow a 'loan' with minimal penalty if paid back in 2 years but no longer allow.

Now, I'm back to original bank and will go through their CL process.  However, at the end I will have to go with another bank to get a lower rate BUT means another set of closing costs.  This really bites but unless you have lots of liquid assets sitting around, kinda limited. 

During these past few weeks, the bank recommended that I get the initial appraisal first before submitting for permits.  Again, another setback on my timelines.  The market is still recovering so appraisals for custom homes have been hit and miss; especially when they are out in the 'boonies' and no real comps in the area.  I'm waiting on an appraisal and don't expect it completed until next week.  If it comes in high enough then I can submit for permit asap but if it doesn't, then I'm really not sure what we're going to do.  I can either walk away, pay the difference, or I can make a pitch to the underwriter for a second appraisal (not typical).

Hopefully it will work out and then I will have to decide - submit permit for normal 6 week process or pay $100/hr for expedited service (except they wont say how many hours would be needed).

Weekend Work 3.9

I was excited to get back in town after being gone for nine days.  Missed the family as my travels are starting back up so hate being away.  This weekend I planned to get the chipper and knock the massive pile of branches that we have been stacking up.  I thought we could easily knock it out in four hours so only rented for 1/2 day.  The morning was a little chilly but it turned out to be a beautiful day.  B and started out making quick head way.

My deal with B was that he had to work at the property every weekend I'm out there (when appropriate) for at least four hours.  I think it is important for the kiddos to have a good work ethic and it starts from an early age.  I grew up on the farm and worked hard (maybe my parents think differently :-) but my kids have all kinds of screen time distractions.  

Well, after about two hours I quickly realized that the pile of branches equated to more hours .... called the rental place and said I need to extend to a full day.  B and I ended up working for seven hours and with the exception of a couple minor complaints, he was a trooper and worked hard.  It was great to see, he really helped me out.

Here is B conquering mulch pile #3.   We have about 15-20 yards of mulch and only used about 1/2 the branch pile so I guess we will have at least 40 yards of mulch to use.  Awesome.

S is limited in what she can do but she wants to paint.  However, she was able to help out on the dump trailer with all the quarry spalls I have to put down for the construction entrance.

The four legged neighbors were out when we were packing up so I grabbed a picture out the window before leaving.

Finalized Blueprints

It's been a couple weeks since updates but I was travelling out of town ... so a couple updates.

Right before I left, we received our finalized blueprints and sent them off to the engineer.  Here are the elevations:

They were supposed to be back by Monday but here it is going on Wed and no call from the engineer.  They billed me for 16 hours but I did not expect it to take over ten business days ... hopefully they will be done soon.