Housing conundrum....

[TheSilverBuick]

After reading the posts so far, if it were me in your shoes, I would have a question and an action that needed to be done:

Question- can I afford to live on half of my take home pay and live the way I want? i.e. continue to play with cars, eat, drink and be merry like I have been? I only have to live on ~half my take home pay if I am covering the mortgage for BOTH residences, if I sell or rent my current house I'm back to ~20% after tax income going to mortgage, plenty to be happy with either way.

Action- contact your realtor (if you haven't) and ask about the benefit of a shop on your existing land. Can you get your investment back? I just bought a house- the appraiser told me it depends on location as to the benefit of an outbuilding. Just looking at existing places with two car plus garages up for sale and only one I know of that actually had a steel out building, I would definately price myself out of what I can realistically sell the place for, IMO of course.

What would I do? Build where you are. Sure, you may be able to rent your current house, but then you have to deal with tenants. I have never met anyone that has rented to others that doesn't have a horror story to tell. If you buy house #1, you have to build a shop and you will not have as much $$ to work with since you are paying two house notes. House #2 carries a larger house note and since it has been on the market for about 2 years, is either in a non desirable location or is priced too high. If you buy it, you will face the same issues when you sell it. I agree with you on the tenant story. I already have at least two people ready and willing to rent my place, both college educated, plan to be here a while and work here at the mine with me. I'm certainly comfortable with them, if they chose to move out I'll consider selling versus renting again at that point. House #2 I think has two stigma's against it, one is compared to the homes built around it, it's the one bringing down the market. The homes around it are fancy and the two others for sale there are fancy looking Log Cabin Modulars. I really think it's the home on the property killing it's appeal. The recent price drop to $199,500 I think puts it in a more realistic price range. I think it started out at almost $300k which certainly was too much. The location is fine, it's actually a better "neighborhood" than house #1. I think it was one of the first lots sold in the area, and even today it's cheaper to get one of the remaining 5 acre lots and build their own house with a two car garage, for those not interested in a giant garage/shop. It's definitely in an odd place marketwise. I rather be upside down on a loan on ten acres and giant shop than upside down on my 12,000 sqft lot and a dinky shop =P Because if I built a shop the negative equity would likely be about the same.

Another option- look for low cost warehouse area to rent for your shop. Could be cheaper in the long run! True, but then I run into the problem Milner351 has, and even though it's close, it sucks having to drive across town to where your projects are.

Wish the dang realitor would call me back already =P

[Old Dog]

Randall in your original post you stated "I really like the location". If this is so why would you move? So a nice garage won't pay for itself if you do sell. If you really like it where you are at and don't plan on moving for say 10 years it might pay for itself in the long term but in the meantime you have a nice house in a location you really like with a great garage to make you happy. Just a thought.

[TheSilverBuick]

I do like the location, but I'm starting to feel like I'm up against the limits of my space, the house is small (850sqft) on a 12,000sqft lot, and the space is limited for building a shop the size I'd be happy with, namely getting all my cars indoors and still have room to work, but only a gear head would really appreciate that kind of land usage at my current location, where as there are places ten minutes away (option #1 and #2 here) that offer more room to work with.

[TheSilverBuick]

Got a call from the realitor. Going to go see both places tomorrow at 2pm. Option#1 has someone who just keeps an eye on places staying there and Option #2 has a renter in there currently. The Realitor said that Option #2 is a trailer with no foundation under it, typically even manufactured homes get some kind of foundation from what I've read.

[BBR]

build living quarters in big red barn + sell manufactured home = WIN!

haha

[Grumpy]

build living quarters in big red barn + sell manufactured home = WIN!

haha

I've seen that done before in the form of a Loft Apartment, they can turn out as nice as you want them to, if I bring one more car home I may be living in one!

[DanStokes]

When we sold the house in Ann Arbor the shop was appraised as a "Hyper-Adequacy" - I chuckle every time I think about that. I think it's Realtor speak for "Over the top". So we got no higher appraisal value than if it had been a plain old 3 car garage. Still, given inflation and the other MAJOR improvements we made to the house and property (we went up a floor) we did fine when we sold. Your experience, of course, may differ.

I'd say the decision to stay and build or move and eat the bigger mortgage payment has to do with how long you would stay in your current home (someone alluded to this already). If you'll be there long enough appreciation will cover your investment and you'll be OK. Yes, real estate ALWAYS appreciates although there may be dips in the graph. Dad was a realtor and he often remarked that they aren't making any more of it. ALL wealth is based on the control of land.

But do what makes you happy

Dan

[SuperBuickGuy]

pouring concrete strips for the mobile isn't that expensive - really it just looks like 2 or 3 3' sidewalks. To put a parameter foundation, they pour another sidewalk that is the size of the home, block the place up like normal, then build cinder block walls around the outside. Why that makes them more of a home is beyond what I know or really care to know - it's just the rule, and it's easy enough to follow.

Modular homes are put on steel I-beam trailers then a tongue is bolted to those beams and it's hauled to the site (kind of like container shipping trailers) - it is exactly the same as a mobile home style dwelling. The difference is what happens at the site - the foundation is a traditional foundation, and the structure (or piece at a time) is craned into position. Seriously, there are only a couple reasons to ever use a modular 1) you HOA/County/state/regulatory body doesn't allow manufactured, or 2) you're putting in a basement.

If you're putting in a basement, it can be done with a manufactured home, but it's hella more expensive (they either fill the basement or get a large enough crane or cranes to lift the parts onto the foundation).

Once a manufactured home is delivered to a site, the wheels, axles, and tongue are removed (and leave with the siting crew) so it looks just like a modular home. In fact, if you had to move it, you have to rent that equipment to do so.

One advantage to stick built - manufactured and modular homes have to comply with National standards, and those standards are ... hmmm ... how do I say this?.... sometimes a bit of overkill - you don't need 2x6 walls when you can spray in foam on 2x4 walls (2x6 makes the structure more stable for moving), yet it's a good example of the additional (perhaps unnecessary) requirements (presuming your code allows lesser materials).
Another advantage to stick built is it is generally easier to get financing for/refinancing on a stick built home. This has changed a bit, but it still is an issue (check the loan interest rates for manufactured vs. stick built).

And you have a unique situation, they don't really make small manufactured homes, pretty much everything is in the 2000+ square foot with vaulted ceilings

[TheSilverBuick]

As stated, my preference is a modular, and with that would be a basement. Who know's I may be perfectly happy with the trailer/manufactured (until I know in person, two websites on the same place call it two different things) already there, but worse case I'd be looking at replacing it.

I like that Dan, 'hyper-adequacy" That would be my current place if I built a shop I'd want. I see that being the case in a few houses in my neighborhood already.

[Orange65]

build living quarters in big red barn + sell manufactured home = WIN!

haha

Around here, you can't give away a double wide that is set up. The cost to move them is more than they are worth. But I like the way you are thinking with the loft apartment in the shop!

[SuperBuickGuy]

trailer has thin walls (2x2 framing), manufactured has at least 2x4... that one looks manufactured - which is a win, but no basement

[TheSilverBuick]

Stick built may be back on the table. I got a strong recommendation for one of our contracts at the mine doing stick builds. I left a message for them to call me.

[TC]

Here's my take as a person that bought 40 acres and built a house......I would go with property #2, the shop already being built is a major plus........basically instead of dealing with building a shop you can get in there and start enjoying it.......also in the pic it looks like power isn't to far away, with our power company they gave us a credit towards the installation so you might want to check into that....ceptic tank cost us $4000, and that was for a 4 bedroom tank.......we had to go 320 feet for our well, we hit two different aquafers one at 170ft and the other at 270ft, we paided $15 a foot drilled and cased plus the pump which if I remember right is a 1 1/2hp pump.......As for the double wide it looks like it's sitting on a concrete slab which would save you a lot of money if you decided to get rid of the double wide and build a more permanent structure........

[TheSilverBuick]

Both have power already, and it appears the shop also has power.

[milner351]

I think I've mentioned my friend that built a pole barn on agricultural zoned land, then built a "stealth loft" 1600 square foot apartment inside of it, with windows only on one side facing away from any road. Only from an airplane could you tell the building was anything but ag. Nice kitchen, hardwood floors, 3 bedrooms, 2 baths, well and septic, propane heat, and out the back door was stairs leading down into the shop which took up the rest of the building.

I have no idea how much trouble he would get into if he was ever found out - but it sure has been a cheap way to live for many years.... ag taxes are cheap!