An Upstairs with a View!

Well, we officially have an upstairs! That was a fun to actually get to walk up the stairs and look out where the windows will be during our meeting with our contractor yesterday.

Let me tell you. I thought this was going to be the fun part. I knew there would be a lot of decisions. Decisions I didn’t even realize I would need to think about it, but this is so much more than that.

I feel like so many of the ideas we had for this house were lost when working with Dunwoody fell through, and that’s disappointing.

Living in a tiny house, as we keep saying, is all about having multi-functional, smartly-built spaces. Yet yesterday, we were so excited to see the upstairs that, until I was laying in bed trying not to stress, I didn’t even realize that there was no space under the stairs for the drawers we had reminded them about so recently.

I take part of the blame. We let our architect draw up fake interior plans (sort of) because we wanted the students to be able to have so much freedom to create ideas that we couldn’t find on google. We didn’t want their brains to automatically go in a certain direction. Yet when things fell apart, it didn’t occur to us that we needed to lock everything down on paper. That was our mistake. 

So now I am focusing on letting go on what might have been, and instead focusing on getting the house done so we can move in by the end of the year. It won’t be perfect. There might very well be a remodel in our future, but at this moment, I have to be okay with that, because we’re out of time (due to how long everything took) and money (because of how much we’ve already paid out of pocket) and patience (I just can’t repeat myself any more).

It’ll be a good house. It’ll be unique. One of a kind. The first of the tiny houses in Minneapolis’ tiniest neighborhood. But it won’t really be our dream house, but it’s as close as we're going to get right now.

 

The Next (of hopefully many more) Miracles

Well friends, this update has been a long time coming (strap in, it's a long one). I last posted that we had a clean title. Honestly, that was a great news. However, we were a little doubtful as to what would come next (you could probably round that up to a lot doubtful). We pretty much told no one what we were working on because having to follow-up with bad news was something we just couldn't go through again.

The biggest hurdle has been the money piece. Over the year, we have talked to 13 banks. Yes, you read that right, THIRTEEN. We had a new bank in place for the construction loan. When things fell apart at Bell Mortgage last spring, Dave Hill (who I still highly recommend to anyone buying a traditional home or just looking to access your situation for future buying) reached out to his contact at Star Bank in Eden Prairie. They said they would be willing to do our construction loan if we could find an end loan provider. If only we knew then what we know now, we might have realized that what we were asked to do was NOT an easy task. This is where the 13 banks come in.

Each of those 13 banks was unwilling to sign the end loan on our tiny house because it "wouldn't hold it's value on the secondary market." That's code for when you two (who have excellent credit) default on your loan and foreclose on your house, we won't be able to resell it. Don't even get me started on this - why do we even HAVE credit then?! I digress.

We were ready to quit. We emailed our fabulous contractor and architect team and broke the bad news. We had run out of options and were pushing pause on the project, maybe indefinitely. But John replied and asked if we had tried Stonebridge Bank. That was, miraculously, not one of the banks we had contacted so he provided a name, and I sent an email. I'll admit, we weren't optimistic. We maybe weren't even that nice to the person who emailed us back. We didn't want to fill out yet another credit application (and get yet another notice in the mail saying that we had too may credit inquiries over the last 18 months) unless we knew that the type of house we were building was an option for their underwriters. Eventually, we received a pre-approval letter from them stating they would take over our loan once construction was finished. To say we were filled with disbelief may be an understatement, but after a little bit more back and forth and some work to get last year's appraisal re-assigned, there we were - ready to set a closing date for the construction loan. Then the date was set for April 18th. April 18th arrived, no emails about pushing it back. Felt unreal. We were waiting for the bottom to fall out...again. It didn't. We signed the loan one week ago today, which if you follow either of us on Twitter, you may have known already.

So today we gathered our fearless team together again. Contractor and his Project Manager, Architect and us. Talking about our plan but for real this time. I feel as though the next few weeks will seem slow as we wait for the permit process to be completed (because let's be real, anytime this house has needed someone else's approval there has been a hang up), but then all of a sudden we'll be picking out windows and doors and all those other things.

Now I guess you could call us cautiously optimistic because we really are. It's been a long, long road but perhaps this story will actually have a happy ending after all. Thanks for sticking with us!

The End

After talking with a lot of banks over the last few weeks, we've come to the end of the road. No more tiny house. At least not now. Unless we win the lottery. Or know someone who wins the lottery who wants to give us a personal loan.

The short version is this. After the housing collapse, banks were no longer allowed to give in-house loans for mortgages unless they (they bank) were grandfathered in. Those that were grandfathered in still have to adhere to much more strict policies (we're talking 30+% down). 

Our house doesn't qualify under Fannie Mae and Freddie Mac. As we all know, the banking industry (along with most things that are regulated by the government) are a little out of touch with reality so they don't see our house as having any resale value, which is what is required to sell a mortgage on the "secondary market" so to speak (more on that in the last post). 

Which leaves us in a tough spot. Either way pay more money to the architect in hopes that he can make the house more "traditional" (which isn't what we want) or cut costs significantly so that we can take a loan out on my mom's paid for town house. Both seem like highly unlikely options. 

So for now we'll focus on cleaning up the title (read: spend more money and pay more fees to the government that screwed us over in the first place by not transferring said title to us). We'll hire someone to plow for us this winter. Maybe tear down the fence next spring. And hope that we can sell the lot and recoup at least some of our money. 

In the meantime, we'll start looking at condos or other small houses (both options that have a lot of problems and neither of us really like). However, staying any longer at our terrible apartment complex isn't an option (never rent from a property managed by Village Green!). 

What we've learned is that the things we want aren't the American Way. In a place where bigger is better it should come as no surprise that the systems that are in place aren't designed to help us live in a life of having less. And unfortunately we don't have the financial resources to fight the system to make changes.

It's a sad day. We thank you for hanging in there with us over the last couple years. Sorry there isn't fun news at the end of this road. 

And More Bad News

Well the tiny house dreams seem to be going up in flames.

First, on the title front. We have hired a real estate lawyer. He's working on it. The good news is, the person with the contract we have to get voided is NOT a murdered. He just happens to have the same name as a murderer. However, he is deceased. So you know, there's that. At least we aren't suing a murdered.

However, even when we get the title cleaned up, we are back to square one because the bank is refusing to fund our project because of the "uniqueness" of the property and the "undesirable" location (near train tracks and a busy street). I'm not sure where we will go from here. I suspect once we get the title cleaned up, we will have to look to local banks or programs affiliated with the revitalization of the city in hopes of getting funding. The house appraises over what we want to borrow. Our credit is stellar. But we can't get funding. Two hard-working, employed people who pay their taxes and have excellent credit can't get funding to build a house when people are defaulting on mortgages constantly? It's mind-boggling really.

Please send us your positive vibes. We need them.

Still Waiting

I wish I had good news. But we're still waiting on the loan. The end of June came and went. Every deadline they gave us has come and gone without progress but plenty of problems. Last Thursday was supposed to be the day we could set our close date. No call Thursday... or Friday. Today we finally hear and there's a problem with the title. How is that possible since we bought the property from the county? I have no idea.

I am ready to walk and away. Maybe try again this year. My heart is just over it right now. I said this kind of build wasn't for the faint of heart, but it's been even more difficult than I ever could have imagined and we have nothing to show for it. Clearly we should have enlisted the help of a team who has experience with non-traditional builds because right now we are constantly nagging people for information and it is painful. Apparently there's confusion about who the paying customer is.

Brent still thinks it'll all be fine.

If he's right, the soonest we'll be breaking ground now is late August.

Sign and Date

Last night we had another meeting with the lender and signed a whole heap of documents. The short version is they have to approve the construction loan and end loan at the same time since one rolls into the other, which means they have to do appraisals based on the specs of what the finished property will look like, etc. Since there are so many unknowns about our house, I'm a little nervous about how this is going to play out in terms of value.

Regardless, the person we met with last night thought that we should be able to close on the construction loan portion by the end of June, which would be great! Any time that we can "make up" is fantastic.

That's sort of all the news for now. Next step is to work with our contractor to find out what he needs to come out of the first draw from the construction loan, and we'll go from there.

Fingers crossed!

Rollercoaster

Let me tell you, this project is not for the lazy or weak. There are a lot of ups and downs.

First, let's start with the highlight of the week. Wednesday I had the pleasure of going to speak to some staff at Walden University about our tiny house. My good friend and college roommate was part of their Green Week committee and asked if I would be willing to come in over lunch one day to do a little Q&A about our house and the process. The good news is, they caught me on a good day. It seemed to me that the stars were finally aligning. The final documents needed for the loan had been notarized on Monday. I thought we were all set to meet with the loan guy next Tuesday. I was a little nervous no one would come out to hear about our tiny house. However, I'd say we had about 15 people been the Minneapolis campus and the folks who joined via webinar (which I consider a major win!). Of course, I'm not a tiny house expert, and I know very little about building - so there was only so much to learn about me. But going back through the journey was a welcome reminder of why we've been attempting to jump through all these hoops for the last ten months (and counting).

Of course, the tiny house high could only last so long. By the time I got home from work that evening, Brent had gotten all sorts of frustrating news from our bank lender (who is impossible to track down, by the way - it's as if he doesn't understand who the client is in this equation). First, "sweat equity" is not allowed in construction loans so we will not be able to participate in the building of our tiny house without being subcontracted through someone else. Secondly (and most importantly), even if we sign the paperwork on Tuesday for the loan, we won't be able to "close" on it for 30-45 days, which means we likely won't have access to the funds until mid-July. This was a big one. Since according to the time line our architect drafted, we were supposed to be applying for permits in March/April so we could break ground in June. Now we won't be applying for permits until mid-July.

Luckily, our general contractor and the Dunwoody team seem to think they can still work with this schedule and still be done by December. We'll have more details on Tuesday after the meeting, but the way it stands currently, it sounds like we've averted the crisis.

Hopefully we'll have more good news coming next week! (A girl can dream...) In the meantime, everyone have a wonderful holiday weekend, and thanks for stopping by!

Tiny Dream Woes

The good news is we got the tax assessment on our property from last year and it was valued at double what we paid for it.

The bad news is our “team” doesn’t seem to understand our vision. My fears are coming true and the builder is trying to squish a regular house into our 500 square feet of livable space. The bid came in almost double our ideal budget and doesn’t include the temperature controlled garage, the finishing, the labor of the students… the list goes on.

It is like all the ideas and vision boards we have brought to the table were 100% forgotten or ignored. I cannot even explain my frustration.

I see countless stories of people building 300 square foot tiny houses for under $40k – you’re telling me you can’t build a house that isn’t even double the square footage for more than double the budget?! When you have student labor involved?

I’m sorry. I don’t buy it.

The problem is, I’m not a builder. I don’t have the knowledge to be able to push them. I don’t know the questions to ask. I don’t know where we should cut corners and where we should not. I don’t know what “cutting corners” looks like while still having a presentable house that we like, that is energy efficient and can be comfortable in all the extreme seasons that Minnesota offers us.

Mostly I just feel sad. Like the odds of us getting the house that we actually want are slim to none. And then it’s like, well, what’s the point? 

Here's to the next update being a positive one...

Going once... going twice...

I'm pleased to announce that we have quite the update for you today! But first, let me rewind. The last post I made was that we were on hold. Someone else had submitted a proposal before we were able to. We knew that was always a possibility, and as it turns out, the process was more challenging than we anticipated (definitely designed for builders not regular humans - they wanted an actual list of every material going into the house, where you were buying and how much it cost, which wasn't an ideal for two people who wanted to used a lot of reclaimed and re-purposed items). Anyway, there were tears, and we started looking for other options... privately owned lots or really anything that didn't have to do with the City of Minneapolis.

We knew we were in a bit of a time crunch due to the school trying to plan their curriculum, but certainly this was a big decision that we weren't going to rush into. We weren't willing to compromise the location of our long term home. 

Our builder recommended that we check out the upcoming Hennepin County real estate auction of tax-forfeited properties. There was a cute little lot in the same neighborhood of Minneapolis, not that far from the original lot. I will admit I scoffed initially. City owned? No thank you! Until Brent did some research. We found out that the way the auctions works are pretty simple. You're the highest bidder, you win the lot. Period. Still have to go through normal procedures for building permits and such, but that's it. 

Friday morning Brent headed down to the auction with a cashier check with our earnest money in hand. We all figured emotional, anxiety-ridden me would be of no help at the auction so I went to work. At 8:30am (auction started at 9am) I got a call from Brent. Closing is immediately following the auction for the winning bidder. Two problems. One, the checkbook was at home. Two, I wasn't there to sign. So I hopped in the car and headed back downtown. Grabbed the checkbook and booked it through the streets of Minneapolis, while I got updates from Brent about how crowded the room was getting. By the time I got there, I was a sweaty ball of stress, but I made it before the initial item. 

There were more than 50 properties for sale that day. Ours was in the middle of the list. So we sat and watched. Some properties got no bids, some had bidding wars. It was stressful. That doesn't even sum it up sufficiently. Our hearts were beating out of our chests. 

Finally our lot came on the screen: 

Brent was ready. I was just trying not to pass out. Brent made the initial bid. We heard going once... going twice... and inside our heads for a brief moment we allowed ourselves to think that we would get it for the minimum bid. Then someone from across the room took the next bid. Back and forth, back and forth. Then they passed. And inside we got excited again, and then behind us came the next bid. Back and forth, back and forth. 

At this point I must say we were nearing the dollar amount we had set as our limit. So I could really just hear my heart pounding in my ears. Back and forth. Back and forth. And then they passed, and we heard, "going once... going twice... sold! To bidder number..." and Brent held up his number and that was it. We gathered our things, walked out the door, and dared to breathe. 

Then there we were, signing the papers and writing a big check (and check half as big as the one we would have had to write if we got the original lot). Official land owners in the City of Minneapolis. 

Tiny house dream back on track.

The Money Puzzle

Today we met with a team about our financing options. We knew it was going to be a little more complicated than a traditional build since there are so many oddities to this project. Regardless, the duo we met with (The Dave Hill team with Bell Mortgage) were extremely helpful (and patient!).

I've worked with Dave in the past, as have friends and family of mine, so I already knew he was great to work with. I just didn't know if he was the expert for this kind of project. However, they have the right people in that office and between them - our questions were answered.

I'll admit, we left feeling pretty good about things. We both have credit scores over 800 (woo!). More importantly, if things go as planned, our monthly payment will end up being about 1/2 of our current monthly payment for a 15 year mortgage (double woo!).

We have our list ready for things we'll need from the build team. Hopefully meeting with them next week, and if the contract is signed, I'll be able to tell you all about that element.

Tomorrow Brent is hopefully going to talk to the people at the City to get some questions answered from that end.

Slow and steady. We'll get there.

p.s. If anyone has any leads about incentives related to building green, please send them our way as well!