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Discussion Starter · #1 ·
So we own a house (well, we have a mortgage on a house). I'd like more space for a variety of reasons. I have my eye on two options but do not know how either of these scenarios would actually work and am curious if anyone knows or has an educated guess regarding our options for financing.<br><br>
Option 1. House that is in really, really rough shape for sale on acreage. The house is not livable and is smaller than our current house. The land is adjacent to a national park and sits right between my husband's office and my children's school. I'd like to buy the place, gut the house, convert the house into three bedrooms with a bathroom and tack on a timber frame barn converted into common space for a kitchen/living area. We'd need to buy the place, do rehab work on the existing house, buy a barn, and rehab/convert/finish it. Yikes!<br><br>
Option 2. Just around the corner from our house, in a small town, residential area, there's an 11,000 sqft light manufacturing building. Weird place for it because everything else is completely residential. It's not for sale but completely empty. I'd can figure out the owner through tax records. We'd need to see if they'd sell it, potentially tear down at least half the building to create a yard (the building currently takes up the entire lot - literally), clean the building, gut it, put up some interior walls, replace the windows, and get the zoning changed to residential.<br><br>
So does anyone have any idea of how we'd go about financing either option? Our mortgage payment on our current house is crazy low and we've got great credit. I, obviously, have not contacted a bank to talk options but am interested in knowing more about what sorts of things I should research before I go in.<br><br>
Thanks!
 

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A few things you will need to think about<br>
1. How much do you want to spend TOTAL on the new house? This is the top number, purchase of the land and building PLUS renovation?<br>
2. Do you know any contractors? Before doing anything, get some plans drawn up, talk to PROFESSIONALS.<br>
3. Renovations generally cost 2-3x the initial quote<br>
4. Talk to the bank, see if you can get approved, if i remember correctly there is a different type of loan for 'working capital' vs 'living places' Sorta like a contruction loan type of thing<br>
5. Does either set up have the necessary plumbing on property that you would need to run a house/family along with electric, (cable, internet, phone, plus whatever else is coming in the future)<br>
6. Keep in mind just because you 'love' the idea, someday you will need to sell it<br><br>
I'm sure others will chime in with lots more ideas.
 

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With option #2, the light manufacturing buildin, are there any known safety issues? IE, were chemicals or other hazerdous substances used on the premesis? Are there any waste safety issues that you know of?
 

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Discussion Starter · #4 ·
I don't know exacty what they did at the facility in option #2 but I think they may have worked on engines or something. It's just listed as "light manufacturing" in the property tax database... We definitely have concerns about what may have gone on there but would figure that out before we attempted to buy it.
 

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With option #2 I would make sure to check the zoning BEFORE closing on the property. This would be worth hiring a lawyer for. Once you buy it, it is yours - and if you can't change the zoning that would really really suck.
 

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Discussion Starter · #6 ·
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<div>Originally Posted by <strong>ChristyMarie</strong> <a href="/community/forum/post/15384452"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">With option #2 I would make sure to check the zoning BEFORE closing on the property. This would be worth hiring a lawyer for. Once you buy it, it is yours - and if you can't change the zoning that would really really suck.</div>
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Yeah, I was just thinking about this on the way home. But what order?<br><br>
Find out if they'll sell?<br>
Check the zoning?<br>
Hire an architect to sketch some preliminary plans?<br>
Have it inspected for soundness of the roof and mechanical systems, which would likely need to be changed anyway? Residential inspector?<br><br>
The more I look at this second building, the more excited I get about the possibility. It's so close to our house that we could continue to live where we are while we work on it. We love our neighborhood so staying would be a total bonus. We thought that this building has a flat roof (not so keen on) but from an angle I caught of it today, it looks like the back half that I want to rip off is actually an addition and that the front portion of the building has a pitched roof - it's not a steep pitch, but it's pitched.<br><br>
Any other thoughts on how to proceed?
 

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I have a couple of thoughts:<br><br>
Will you be doing any of this renovation yourselves? Do you have the time and the skills? If it turns out you have neither, can you afford to hire the work done?<br><br>
How long can you afford to pay for two places?<br><br>
Is your current house in sellable condition, and what's the market like in your area? You could get stuck with two houses for a long time.<br><br>
Now for a different train of thought: is there any possibility at all that you can add on to your current house to give you the extra space you want? It seems to me that this would be the least expensive option, even if you put in a nice addition, because you aren't paying for two lots or two sets of property taxes.<br><br>
Have fun!
 

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Personally, I wouldn't mess with Option 2. Between not knowing what the building was used for/materials used in the building, and the zoning issue, it's not worth it. Around here, changing zoning is extremely expensive and requires going before the board and inviting community comment. Not to mention the issue of ripping out half the building to create a yard - you may be biting off a bit more than you think. Here foundations may be 2 feet of concrete, and you'd have to rip all of that out and then rebuild the soil. That's a huge expense.<br><br>
Option 1 sounds much more reasonable, but I definitely think about budget and consult some contractors before going that route.
 

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Discussion Starter · #9 ·
Thanks for all the thoughts, everyone.<br><br>
We do have the skills to complete all of this work. Time, on the other hand, is the much more difficult piece of the puzzle.<br><br>
I have three sets of friends who have managed to sell houses in less than a week over the past six months and our house would probably sell for a bit less than any of them. Fortunately, we're also in a position to be able to float two mortgages for a bit since our current mortgage is so low.<br><br>
Option 1 is probably much more feasible. The building in option 2 was a machine shop so there's lots of sticky oily mess on the floor but other than that, not much mess. I would like to think, but I have *no* idea, that the zoning change would not be a big deal because this building is literally in a residential neighborhood. It's a weird arrangement, to say the least!<br><br>
I'd be happy to hear other thoughts on how to muddle through a process like this. Oh! We've been considering an addition for a few years now. We're worried that adding it to our house (which is about 1200 sqft) would outsize us for our neighborhood and take up too much of our lot.<br><br>
I feel like we need a realtor, attorney, and contractor all at once!
 

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<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>gmvh</strong> <a href="/community/forum/post/15385272"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Yeah, I was just thinking about this on the way home. But what order?<br><br>
Find out if they'll sell?<br>
Check the zoning?<br>
Hire an architect to sketch some preliminary plans?<br>
Have it inspected for soundness of the roof and mechanical systems, which would likely need to be changed anyway? Residential inspector?<br><br>
...<br><br>
Any other thoughts on how to proceed?</div>
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Well, yes you do them all at the same time. A contract for a commercial property does not work the same as residential. You don't put in a bid, have one inspection and close in 30 days. You'll have a due diligence period to attack inspections, zoning, financing, etc. This can be anywhere from 30 days to....6 months, a year, it just depends.<br><br><div style="margin:20px;margin-top:5px;">
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<div>Originally Posted by <strong>cristeen</strong> <a href="/community/forum/post/15385506"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Personally, I wouldn't mess with Option 2. Between not knowing what the building was used for/materials used in the building, and the zoning issue, it's not worth it. Around here, changing zoning is extremely expensive and requires going before the board and inviting community comment. ...</div>
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Zoning is not necessarily a huge issue. It depends on the local gov't and what the zoning laws are and how open the city officials are to changing it. If it is an eyesore in the middle of a residential neighborhood it may have originally been residential, the previous owners may have gotten that changed and now it might not be that big of a deal to change it back. Yes, you do have to go before the board but for a real estate attorney this is just not that big of a deal under normal conditions.<br><br>
Now, if there's hazardous waste on the property or other factors you don't know about the zoning may be more complicated. It just depends.<br><br>
You'll also need a lawyer to write the contract so finding a good one - who does commercial real estate and zoning - is the first step.
 

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Yeah, the thing about option 2 is that there is all sorts of due diligence to deal with. Since it used to be a machinery shop, you should have an environmental inspection done to make sure that the site is not contaminated (and it probably is-- most of them are).
 

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When was the building constructed?<br><br>
My job is as the director of an arts community, and it's in a building built in 1854. I only came in on the end of the reno project, but it's a major process. We're not even converting to modern or living space, and it's been expensive to make the building work to pass current inspection processes. Plus we're a historic building, so we have some leniency.<br><br>
The base-level cost to modernize was $1 million. The building is 40,000 sq ft total. In the end, the proprietor has spent about $300,000 on it. That gets us through initial approval to lease the space to artists on one floor (of 3), but more will need to be done on the other floors.<br><br>
My point is that converting an old building is an immense project - time & money-wise. If we were to make it living space, the building inspector ran through a loooong list of additional things we'd have to do. We don't live in a particularly onerous, bureaucratic place either, so factoring in the climate on those issues where you live will matter, too. While I would love the idea of living in a building like that, I would be leery of undertaking too much. (Plus, as someone else said, if you ever want to sell it, that could prove difficult.)
 
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