Monthly Archives: September 2006

Everything is Starting to Get Surreal

2 months ago, as we are finalizing everything, as things would break around the house, we’d say “Oh well, I guess we need to knockdown the house.”  As in, “The hinge to the back gate has come undone.” or “The screen door is starting to rip.”  No matter what, “Oh well, I guess we need to knock down the house and build a new one.”  Ha, ha.  It was very funny.

Then our bathroom, our only bathroom, started to back up.  For some reason, I think the result of kids stuffing toilet paper into the bathroom sink drain, the sink, shower & bathtub started to back up.  Then a different thought.  Oh shit (figuratively, not literally), I am not going to spend a dime on this bathroom in the coming days before we move out.  I’ll rent a porta-john before I pay a plumber $100 an hour to come out here and tell us that we need a new bathroom.  Fortunately, a little Zep fixed everything and life has been good since.

But since this incident, combined with the timing, knowing that in 4 weeks we will begin demolition, things have gotten a little surreal.  This weekend, I need to cut down some trees.  Trees that have probably been there for 40 or 50 years (or more). I have a friend that is doing his landscaping now and he is coming over to get a bunch of our plants.  The whole look of the house will be changed.

We’ve also been getting rid of a ton of stuff.  We are in the final stretch here and that has been tough.  We’ve got our POD coming in 2 weeks.  Our attitude is that if we aren’t going to need it for 8 months, we are never going to need it (big furniture aside) and it is going in the garbage.  It is tough to get rid of stuff that you hold a sentimental attachment to, but it is a good purge.

When I moved to California 11 years ago, I packed up all of my belongings, gave them to a total stranger and trusted that they would be in California within a week or so.  That was surreal for me and I didn’t own much but a bunch of CD’s and a crappy car.  Again, I am trusting someone who is, for all intents, a stranger to demolish my house and build our dream home.  It is very surreal.

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Somehow, We’ve Got to Pay For This Project

FHH

Wow, that is an ugly image, but you get the idea.  We’ve got our financing lined up now and are going through the document signing process.

I probably called a dozen or so banks during this process and have a very detailed understanding of the types of loan products that are available through all of them.  The decision to go home equity versus construction loan, when you actually ran the numbers, wasn’t much of a decision at all.

Equity lines are still fairly expensive unless you only get 80% loan to value financing.  Unfortunately, for what we want to do, we would have had to go 100% loan to value and even then, it would have been tight.  We opted to go with a construction loan and went with First Horizon.

First, we’ve worked with FHHL in the past and have a great relationship with Chris Mohammed, our agent.  Chris is extremely smart and understands this business better than anyone I’ve ever spoken with.  It is a pleasure to work with her, too.  Second, FHHL has an incredible construction loan product right now.

One of the things that we really liked about a lot of the construction loans that we looked at was that there was no payment due while construction was going on.  Essentially, we get an interest reserve where the interest from the money that we use goes into a pot and after the construction is finished, we roll everything into a traditional mortgage.  Most of the products that we looked at had rates of 8 – 10% for the construction loan (Moose and Rocco come break your fingers if you miss a payment) and something more manageable for the traditional loan.

FHHL’s product puts the construction rate at the same rate of traditional mortgage.  Essentially what you are getting is a 31 year loan (or 6 year loan) and not having to pay anything for the first 12 months or until your construction is finished.  It is a great deal and the most aggressive that we saw out there.

If you’re interested in talking with Chris, you can reach her at her site.

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It’s Official

We are now officially building a house. Let me rephrase, we are almost officially building a house. We have our contractor lined up and we are signing our loan docs, so we are 90% officially building a house.

We chose to go with Craig Rogers Construction. If you aren’t in the San Jose area (or even if you are), this probably means nothing to you. Unfortunately, as I’ve complained about in the past, none of these guys have websites, so I can’t show work either. Arrgh.

But we went with Craig for a number of reasons:

1.) He reminds me of my dad. My old man runs a small tool and die shop and has done the same thing all of his life. He is one of the few people that I know that truly loves his job. If you told my dad that his expenses would be taken care of and he didn’t have to work, he’d probably show up at the shop at 7 am the next morning to design molds. Craig, I get the impression, is the same way. Sure, he could charge more for the work, but he’d rather be selective about the jobs, do them really well and do them for a fair price.

2.) I don’t get the impression that he is going to shaft us for $1,000 worth of towel racks. If we want to spend that, it’s fine, but that will be our call. Craig builds really high end houses. In looking at the other homes he has built, I get the impression that this will be a fairly simple project for him and his crew. However, I have confidence that he isn’t going to put ugly towel racks in.

3.) We have a budget. Craig was about 5% more expensive than the lowest bid and about 15% less expensive than the highest. He was right in line with the mid-end of our budget. I have it built into my mind that we will spend an additional 15 – 20% during the building phase of this project based on unforeseen expenses. I think that our most expensive contractor would have done an amazing job, but I also think that we could have gotten into trouble if we decided to make some changes along the way.

4.) His references were impecable. We love the houses that houses that he has built in the area and the owners of these homes had amazing things to say about how great it was to work with Craig. How he came in at or below budget (unless people changed things) and finished on time.

Taking all of this into consideration, the choice became a no-brainer for us. We’ve signed the contract and cut the retainer check. His crew is scheduled to show up on 11/1 to set up the fences, turn off the water, move the electrical and begin demolition. Now the fun really begins.

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Where Are You Going To Live?

When you tell people that you are going to knock down 90% of your house and move out for 7 months, you’d expect them to say something like ‘Wow, that sounds really exciting!’ or ‘Boy, that is going to suck.’  Invariably, the first question that anyone asks is ‘Where are you going to live?’ Like there is a universal 1:1 ratio for housing or something.  I’ve always found this a bit odd and have had fun coming up with pithy answers like ‘Oh, there are some nice boxes under the bridge at the creek’ or ‘We are renting an RV’ or ‘Oh snap, we didn’t think of that!’.

But now, I have an answer!  As of yesterday, we are going to be apartment dwellers for the first time in a long time.  It was actually a bit weird filling out a rental application, but we are going to be residents of Archstone Apartments in Willow Glen.

I’ll put it on the record that I’m not crazy about this place, but for 7 – 8 months, I think that we can live with it.  We have had four sets of friends of have lived or are living here while they do their homes and if they can manage, so can I.  In fact, one of my friends is perhaps the most particular person I know and if he can deal, we can too.

At the end of the day, the place is cheap (compared to our second choice which was going to be Santana Row).  It is clean, there are a bunch of kids.  It is close to parks and they allow dogs.  The stars lined up for us.  I’ve read mixed reviews on the place, but it is short term.  Oddly, the place is bigger than our current home, so we will love the additional space.

Like I mentioned in a previous post, plan ahead.  Had we waited until the last minute to find a place to live, we would have delayed the start of our construction by at least 2 months, probably more as that would have put us in the middle of the rainy season.

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Many Tiny Steps Adds Up To A Marathon

Undergoing a project like this is akin, I suspect (because I’m lazy and don’t really know), to running a marathon.  There is tons of preparation, often there are setbacks and ultimately each step adds up to 26.2 miles.

Like a lot of sales people, I’ve married way out of my league.  My wife has been awesome about breaking this project up into many tiny steps.  This includes delegating a bunch of these tiny steps off to me and making sure that these are completed well in advance of our actual date that we need things done.

In speaking with friends who have undergone this process, they have all stated that you want to be sure that you know what you want and that you have your stuff picked out very far in advance.  Any delays in construction are typically a result of the owner debating between dark gray granite or light black granite or windows with panes or without panes or stuff like that.  We are lucky in the regard that a.) she has great taste and I take a back seat to decorating ideas and b.) we are both very decisive.  We don’t spend a ton of time trying to debate over these decisions.  We’ve hit some roadblocks, but usually, unless I feel insanely strong about it, I defer to her taste.  No marriage is worth arguing over window coverings though.

While the process thus far has been about a 6 or so on the stress-o-meter, I can see how people become totally unglued.  I’m starting a new category today titled ‘Unasked for Advice’.  These will be bits of knowledge that we’ve learned either the hard way or the fun way.  Our first bit is to break everything out into very, very small menial steps.  Don’t take on anything too big at once.  It sounds like common sense, but I suspect that most people would wait until the very last minute to make some of these decisions.  Don’t.  Figure out what your next steps are and plan on having them completed at least 2 weeks prior to the deadline because life will crop up and show its face and you won’t get things done.

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Plans Out of the City

Yeaaaaay!!!!

Except it came about 4 weeks early.  We have been kind of caught with our pants down a bit since we don’t have financing lined up yet nor have we finalized on a contractor.  But our plans are ready to be picked up.

Probably this week, we will resolve the above.  We’ve narrowed our contractor down and now need to finalize that.  We’ve also found two really great loan products from IndyMac and First Horizon.  I’ll be doing the spread sheet later this weekend and letting everyone know what we found.

We also discovered Lamps Plus, which has every single lamp ever manufactured.  I don’t know anything about their quality, however, they do have selection down pat.

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