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cutielulu593

First time Homebuyer/Homebuilder...

cutielulu593
9 years ago

Hi there,

I just found this site today and have gotten a lot of great information, but I'm in need of some specific advice. I'm 26 years old and have always been interested in home ownership. I've saved some, but don't have a great deal to put down on a new purchase. My parents gifted me 2.5 acre parcel of land adjacent to their property. It assesses for about 20 to 25K. I'm lucky that my parents were able to parcel their land. This is really my only opportunity at home ownership in the near future! My understanding is that I will be able to use the land as collateral on a construction loan to build a place.

Since I'm single and don't need a great deal of space, my plan was to build a garage with an apartment over it. However, I'm wondering if this would be the most inexpensive option? From my research, I believe it is. My other thought is to build a small house/cabin with a small footprint. But if I went that route I would eventually want to build a 24x24 garage anyway, so I'm leaning towards the garage apartment.

My budget is around 100K for the total project. I've gotten advice from a builder friend about some features to shy away from in order to keep costs low. I'm not looking to do anything high end and am willing to bargain hunt for finishes. I've also got a friend who would do the foundation (slab) and septic at cost. The site is all but completely clear and there's already a driveway.

To you seasoned home builders out there, Does my plan and budget sound doable?

Comments (15)

  • dekeoboe
    9 years ago

    Have you visiting your local (county/town) building department to see if there are any restrictions that would impact your plan?

    Have you visited your local bank to see what type of loan you are eligible for?

  • fireballsocal
    9 years ago

    You're single now, but look forward a few years towards a family and how your current plan fits in with them. Sure, you can sell but your parents won't want strangers living next door I'd imagine. Is a mobile home with free standing garage now possible? You could sell the mobile home at a later date and build on to the garage till you get the house that you want.

  • jdez
    9 years ago

    Sounds like a good plan to me. If you have a family in the future, you can add a house to the garage.

  • JenBL
    9 years ago

    I think that sounds like a good, affordable plan. Build for what you need now, then add the house onto the garage when you are ready. I'd be sure to size your septic for a larger home so that doesn't need to be redone later.

    Your biggest obstacle may be getting the zoning and a loan. But it sounds like it's worth trying!

  • mushcreek
    9 years ago

    I agree- the zoning and financing could be a problem. Better check on that before you get too excited. I love the idea, though.

    A good forum for you would be the one at countryplans (dot) com. Lots of folks building small houses and other buildings, and they sell very affordable plans for small houses.

    Another good site is barnplans (dot) com. I built one of their barns, and they have a wide range of sizes. All but the smallest ones have large usable lofts that would make a good apartment.

    Are you going to do any of the work yourself? Even just painting will save you some money.

  • patriceny
    9 years ago

    You sound just like my current husband did, before he met me. :) Apparently he wanted to do the exact same thing, right down to having the parcel of land gifted to him by his parents.

    Zoning wasn't an issue (in our area), but finding a bank to lend him any money was. None of the local banks in our area would lend him the money for a garage with an "apartment" over it. The issue wasn't his credit worthiness nor his ability to pay - they preapproved him for a mortgage - but wouldn't lend money on a construction loan for a project like this.

    Fast forward a few years and he was glad he didn't go through with it anyway. Obviously your mileage may vary. ;)

  • jkliveng
    9 years ago

    Similarly, I couldn't get a loan on a 1 bedroom home on 20 acres because there were no comps. It was 1 bed, 1 bath, kitchen and loft. Cost around $100,000 to build also, and had a nice new barn on site.

    Like patriceny said, I imagine the same issue would come into play with building one.

    You could try a small home (there are many options now), and use it as a guest house later if needed. Once again however, it will come down to codes for the area.

    What part of the country are you in? (sorry if this was mentioned already)

  • ILoveRed
    9 years ago

    If you even think there is a possibility of marriage and a family, why not just rent for awhile and save like crazy. You are only 26.

    If this is family land that you don't ever want to sell do you really want to compromise on the type of structure you build on it?

    Good luck on your decision.

  • zippity1
    9 years ago

    i think it's worth going to banks and inquiring into what they require
    keep in mind that preparing the land, driveway, etch will eat into your funds will you need a well? septic?
    around here even small older apartment is a thousand dollars a month --that would be a driver for seeing a banker asap..

  • cutielulu593
    Original Author
    9 years ago

    Thanks for all the answers so far! Sometimes I feel like I've worked every possibility out in my head, but others can be so insightful.

    I haven't yet gone to a bank with any real plans. I've opened a savings account at the bank I hope to get a mortgage from and have picked up an application so I'll know what I need when I'm ready.

    One of my biggest concerns is that I won't be able to get financing for a "garage apartment." Although, looking at countless floor plans online, how does one determine what is a garage and what is a drive under house? How would the bank? I don't imagine that zoning would be an issue as I live in a rural community in Upstate NY. People around here buy property and plop down trailers or even campers. Anyway, this is the reason why I've toyed with the idea of building an actual small "house." If the bank does squash my hopes for the garage apartment, I would go that route.

    Of course as others have brought up, I don't know the future and if I'll always be single. That's why I liked the idea of a garage apartment. Thinking that at any point in the future, if I needed more room (and/or had the finances) I would build a larger house and rent out the apartment. I've already decided that any design that I would consider has to have an outside entrance separate from the garage itself.

    I don't anticipate moving away from this area. I work for my family's business which is two minutes away from my property. If I were to ever move away, I would either rent it out or sell it back to my parents.

    I've toyed with the idea of renting, but inventory is pretty limited and rather expensive. If I could stay within my budget for a build, my mortgage would be cheaper than any apartment I could find around here.

    Thanks again and I look forward to hearing more...

  • dekeoboe
    9 years ago

    That's why I liked the idea of a garage apartment. Thinking that at any point in the future, if I needed more room (and/or had the finances) I would build a larger house and rent out the apartment.

    Whether you can do this or not depends on your zoning. Just because you live in a rural area does not mean there is no zoning. Trailers and campers can be considered temporary structures a garage is not. Different rules can apply. That is why you really need to speak with the building department. In addition, if you are allowed a house and an apartment, you will need to find out if they each need their own septic and well. The location of the septic and well for the garage apartment will also restrict where you would be able to construct the house - certain distances must be maintained.

    And picking up the bank's loan application is not enough. You need to make an appointment to speak with the loan officer. You will gain so much more information from a face to face meeting than you will from just reading over a form.

  • patriceny
    9 years ago

    That's too funny. I'm in upstate NY too.

    I'm sure you know every county/town has different building and zoning requirements - so I'd probably first start by calling your jurisdiction's building office and see what the restrictions are. You'd be surprised what oddball restrictions can be in place that seem to defy common sense.

    Secondly, I'd make an appointment with a loan officer at your preferred bank. Those meetings are free and you will learn a ton.

    If zoning allows it, and if you can get financing - it's not necessarily a bad idea, in my opinion, at least in the short term.

    What I would also suggest you think about is long term stuff though. I did something somewhat similar, in that I built a house on some land my family gave me. It ended up being my "starter house" and I've since moved on. Now I wish I'd waited to build that house on family land until I was older and had more money. That was a very nice plot of land that now belongs to someone else.

    Hindsight is always 20/20 too though.

  • ILoveRed
    9 years ago

    Wish I could hit Like on PatriceNY's words of wisdom.

  • cutielulu593
    Original Author
    9 years ago

    Re:dekeoboe

    I didn't think of that, but that might very well be the case. I'm still in the planning/saving stage, but I'm getting close to being ready to take the plunge. My next step will be calling the building department, for sure.

    A family friend who does some sewer and foundation work on the side did mention that I should plan on installing a sewer that's cleared for a larger house so we wouldn't have to replace it in the future.

  • nostalgicfarm
    9 years ago

    At 26, I wouldn't build on family land unless my future was already planned (spouse and kids in place!).
    What you could do is build a Morton building (I think Morton finances these) , then use the money from your "construction deposit" to build an apartment inside the Morton building. In the future, you could use the building for storage/hobbies with a home on site that better fits your family/spouses tastes. The other easy thing would be a modular home. For around 40-50K (I believe in my area) you can also finance these through that company. Then when you build at a later stage, you can sell the modular on craigslsit foe 20-30K. Figure even if you live there for 8 years, this is pretty cheap rent! Or you may even rent it out then. In the meantime, you can develop the property how you would like....pond, windmill, fruit trees, nut trees, deer stands/plots, fruit bushes, prairie grass....