OT Home Owners: Threadpocalypse

[WhiteH2O]

Originally Posted by ShadowIMg

Those of you who built houses - could you share kind of a rough overview of how it went down?

I'm envisioning in a few years time wanting to find more than a standard suburb lot to build on with some space. It seems incredibly complex in coordination of building a new place though. Did you buy the land ahead of time and then go from there? How long did you have to float two places to live, etc? Any significant unforeseen costs involved?

I'm just in the first phases of building my 4th house. I think most of your questions have been answered, but here is the quick rundown on the current one, as it seems most like what you are thinking about.

Found the land and got the land loan from a bank that also does construction loans (to make it easier later). Then we found a builder that does everything with the foundation up. All land, septic, water, power, and dirt work is on me. We chose one of their houses, changed some stuff around, and got engineered plans. Got a biologist and an engineer to draw up site plans and everything that is needed for my county to apply for building permits. Once we got everything together (nearly a year, but we are on waterfront in a very restrictive county), we applied for permit. They ask for changes and additions on the plans and permits for a while, then, after about 9 months. We got our permits.

With permits, I started site prep and getting the construction loan started. I pretty much got the site ready (using cash) and the construction loan finalized at the same time, so that I can now start building. I'm scheduled to have the foundation start on the 8th of this month. The schedule shows us moving in late September or early October. In the mean time, we will continue living in a 5th wheel that the OT so strongly recommended against doing.

We found our land by searching Redfin and other real estate sites. Once we found a few we liked, we drove around and visited a bunch of them. If we found one we really liked after visiting it, we would call our agent and get more info, and maybe put in an offer (with feasibility and other contingencies). Honestly, this is probably my favorite part.

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[constantinus]

Originally Posted by 340Duster

This is a rental, so probably the cheapest builder grade possible. They put on one of those spring loaded faucets that bends the back of the sink when you try and move it around

The disposal also sounds like it's on its way out, and the vibration made a soap holder fall and break

My house has a cast iron sink, and an occasional wipe down with bleach keeps it nice and white.

I'd be willing to bet that's a 22ga sink. No amount of sound deadening spray/pads will help for that quality of steel. Minimum thickness should be 18ga, even if it's a drop in.


Also, use bar keeper friend liquid soap for any stubborn stains on the cast iron enameled sink. works fantastic.

[BlackBeastie]

I am venturing back into home ownership in a couple of months and I am hoping there is someone who can help me with a finance question. If I break my mortgage payment into two half payments per month, would I effectively end up paying less interest in the long run?

Does this make sense?

[ShadowIMg]

Originally Posted by BlackBeastie

I am venturing back into home ownership in a couple of months and I am hoping there is someone who can help me with a finance question. If I break my mortgage payment into two half payments per month, would I effectively end up paying less interest in the long run?

Does this make sense?

The details matter, but probably no. If they do interest based on principal per month it would make no difference. If they do it on some sort of average daily principal it should end up slightly higher. There's amortization calculators you can put the details in though and find out exactly. You need to find out how the interest is calculated though.

[f4phantomii]

Originally Posted by BlackBeastie

I am venturing back into home ownership in a couple of months and I am hoping there is someone who can help me with a finance question. If I break my mortgage payment into two half payments per month, would I effectively end up paying less interest in the long run?

Does this make sense?

Agreed with what Shadow said.

Depends on the terms of your mortgage and how the company does things.

If you make a payment halfway thru the month it may just sit in escrow until the actual payment is due. So that didn't help you any.

I've also had the experience where if you make an extra payment or round up your payment, they play games where it doesn't get applied to the principle and just ends up sitting in escrow until the end of the year when they issue you a "refund" for overpayment. Yeah, that really pissed me off.

So no matter how you decide to save some interest, make sure what you are doing is having the intended effect on your balance.

[BlackBeastie]

Originally Posted by ShadowIMg

The details matter, but probably no. If they do interest based on principal per month it would make no difference. If they do it on some sort of average daily principal it should end up slightly higher. There's amortization calculators you can put the details in though and find out exactly. You need to find out how the interest is calculated though.

Originally Posted by f4phantomii

Agreed with what Shadow said.

Depends on the terms of your mortgage and how the company does things.

If you make a payment halfway thru the month it may just sit in escrow until the actual payment is due. So that didn't help you any.

I've also had the experience where if you make an extra payment or round up your payment, they play games where it doesn't get applied to the principle and just ends up sitting in escrow until the end of the year when they issue you a "refund" for overpayment. Yeah, that really pissed me off.

So no matter how you decide to save some interest, make sure what you are doing is having the intended effect on your balance.

Thank

Very helpful. I will run it through a calculator.

[orndog]

To save money, you're best bet is to pay an additional amount, say $100, every month. Many calculators will let you punch that in to see. But as phantom mentioned, make sure it actually gets applied to principal. There's usually a check box or extra line to say you want the money to go to principal.

[TheViking85]

Originally Posted by BlackBeastie

I am venturing back into home ownership in a couple of months and I am hoping there is someone who can help me with a finance question. If I break my mortgage payment into two half payments per month, would I effectively end up paying less interest in the long run?

Does this make sense?

Depends on the bank and terms of your mortgage.

But in most mortgage banks don't take partial payments, ie: the mid payment will sit in escrow and apply once you make the second payment to make up 1 full monthly payment.

On almost all car loans however you would save money because they apply payments immediately.

[hooziewhatsit]

I've also seen ads for a mortgage that you pay every two weeks, touting that it saves you $$$$ over the life of the term.

52 weeks a year = 26 half payments = 13 full payments. It's just a sneaky way to get one extra payment a year.

Like mentioned, if you can add enough a month to do an extra payment a year, and make sure it goes to principal, it does knock several years off the loan.

[TheViking85]

Originally Posted by hooziewhatsit

I've also seen ads for a mortgage that you pay every two weeks, touting that it saves you $$$$ over the life of the term.

52 weeks a year = 26 half payments = 13 full payments. It's just a sneaky way to get one extra payment a year.

Like mentioned, if you can add enough a month to do an extra payment a year, and make sure it goes to principal, it does knock several years off the loan.

The OP referred to two payments per month though IE semi-monthly, not bi-weekly.

Bi-weekly payments, can, if allowed do double duty; add an extra payment, but also, if payments are applied when received, save you money through more rapidly reducing the principal balance.

[ShadowIMg]

Originally Posted by TheViking85

The OP referred to two payments per month though IE semi-monthly, not bi-weekly.

Bi-weekly payments, can, if allowed do double duty; add an extra payment, but also, if payments are applied when received, save you money through more rapidly reducing the principal balance.

Assuming that you are overall early by 2 weeks, rather than late by 2 weeks, which flips it the opposite direction. Knowing lenders, that is the direction I'd expect them to try to get you to go.

[mla163]

Bi-weekly payments will let you get ahead and they are usually easy to set up. Basically 13 payments a year. Wells Fargo let me do it easily. It does add up. It can save you years off a mortgage. i.e. 26y vs 30y.

If they don't let you set it up easily (Mr. Cooper / Nationstar), then you can always make and extra half payment twice a year and get the same thing. e.g. if you get a bonus, pay it towards your principal.

You can always pay more towards a mortgage (bi weekly payments on a 30 year). You can't pay less (15 year mortgage when you miss a paycheck).

[LostAndFound]

Anyone have input on in stock kitchen cabinets from home depot or lowes. I may need cabinets for a rental kitchen if the price is right. They're cheap and low quality, but is it worth the money? I understand if they get wet they'll likely just blow up.

How do they compare to ikeas entry level kitchen.

[Grap]

Originally Posted by LostAndFound

Anyone have input on in stock kitchen cabinets from home depot or lowes. I may need cabinets for a rental kitchen if the price is right. They're cheap and low quality, but is it worth the money? I understand if they get wet they'll likely just blow up.

How do they compare to ikeas entry level kitchen.

I looked at them years ago when re-doing my kitchen.

Over-priced crap.

The 'nice' ones that they have in their showroom are pressboard crap and cost nearly the same as true custom cabinets.

The real basic-bitch cabinets aren't bad price-wise, but not suitable for anything more than garage/workshop cabinets and may last a year or two in normal use. At that point, you'd be better served to find used ones out of a recent remodel.

I was looking at Ikea and the pricepoint wasn't bad, but the style wasn't what I wanted. But in all, this may be the way to go if you're handy and can install them yourself.

There's some decent RTA cabinets out there that will save you some money, but then you need to spend the time to put them all together.

I also looked at getting new doors and refacing services. That was nearly as much as brand new cabinets.

I ended up refinishing all my existing cabinets (maple/plywood carcass) and my buddy made new doors.

[constantinus]

Originally Posted by LostAndFound

Anyone have input on in stock kitchen cabinets from home depot or lowes. I may need cabinets for a rental kitchen if the price is right. They're cheap and low quality, but is it worth the money? I understand if they get wet they'll likely just blow up.

How do they compare to ikeas entry level kitchen.

Off the shelf HD cabinets are decent enough but I’ve done many a job replacing with RTA cabinets. I see you’re in NJ/NYC area so If you’re close to J&K Cabinetry in Westbury NY I would suggest checking them out. I use J&K cabinets on most of my project, quality is some of the best for RTA and I put them on par with a lot of the finished to order from Waypoint/Thomasville. Plywood boxes/shelves, solid wood doors/drawers, soft close standard, etc.

[mla163]

I've got no problems with cheap cabinets as long as the finish is nice. Plywood or particle board is fine for me.

I have fancy pants plywood cabs in my kitchen. My laundry room has assemble yourself cabs that look fine. You can't tell the difference on the outside.

[Grap]

Originally Posted by mla163

I've got no problems with cheap cabinets as long as the finish is nice. Plywood or particle board is fine for me.

I have fancy pants plywood cabs in my kitchen. My laundry room has assemble yourself cabs that look fine. You can't tell the difference on the outside.

Yeah, but in a rental unit, unless you want to re-hang new doors 1-2X a year and replace them all every two years...

[edkwon]

Listening to some financial investment podcasts and one guy who is talking about investment properties is saying how he owns multiple rentals and puts them all under a business entity (LLC or whatnot) rather than directly under his own name, partly as a barrier to liability.

We currently own two homes we are renting out outside of our primary home (titles are under our names directly) and it has got me thinking.

Anyone here have insight into this?

[orndog]

I'd assume if anything happened that you were found liable for, your tenants could sue your ass off. If they are held by an LLC, your liability would be, well, limited. I'd guess.

[the_saintusa]

Originally Posted by TheViking85

Depends on the bank and terms of your mortgage.

But in most mortgage banks don't take partial payments, ie: the mid payment will sit in escrow and apply once you make the second payment to make up 1 full monthly payment.

On almost all car loans however you would save money because they apply payments immediately.

Check with your bank.

All banks in Canada apply any additional payments (up to the monthly payment as a max) directly to the principle.

Adding $100/month would go a LONG way to saving $$$.

As are all car loans I have had with payments going straight to the principle.

Allowed with no penalty, but I am sure other banks/credit unions will be different.

[edkwon]

Originally Posted by orndog

I'd assume if anything happened that you were found liable for, your tenants could sue your ass off. If they are held by an LLC, your liability would be, well, limited. I'd guess.

Well yeah I get that basic concept already, but I'm hoping to get some insight from any homeowners here who've already gone thru the process and may have tips/pitfalls to share.

I'm actually consulting real estate and CPA professionals as well, but asking you guys in addition to them is a no cost option

[Badler]

Cabinets are really ****ing expensive. That's all I got.

[trevoroni]

We went with IKEA cabinets in our house, for the kitchen, 3 bathrooms, and an entry way storage/bench and they look and function as good as new 6 years later.

For the price I don't think they can be beat, I think we've spent $20k on everything, where as getting a custom cabinet place to do just the kitchen was going to be almost $30k for basically the same specs.

I'm a little disappointed that they changed design from the Akurum to Sektion line since we put them in so if we ever need to get replacement parts or wanted to change up styles with new fronts it won't be as easy, but there are company's that make doors to fit the Akurum line.

[f4phantomii]

Originally Posted by edkwon

Listening to some financial investment podcasts and one guy who is talking about investment properties is saying how he owns multiple rentals and puts them all under a business entity (LLC or whatnot) rather than directly under his own name, partly as a barrier to liability.

We currently own two homes we are renting out outside of our primary home (titles are under our names directly) and it has got me thinking.

Anyone here have insight into this?

You should have an LLC for protection. Not required by any means, but is the reason they exist.

Depending on what state you are in, the process to set it up can be ridiculously simple.

Basically the LLC can limit liability to business assets only and helps protect your personal assets.

It's not a bad idea to get a separate biz insurance policy that would cover some events. If a branch falls off a tree and damages the renter's car, their insurance may come after your biz to recover their payout. If you have an insurance policy, they cover the loss.

It's worth noting that having an LLC complicates your taxes slightly. Again, the idea is to demonstrate a clear firebreak between your personal assets and the biz assets in the event something bad happens.

You won't have employees or payroll taxes (other than your "salary"), no workers comp, etc. So it shouldn't be much other than expenses (repairs, maintenance, etc.) on your taxes.

The good part is it motivates you to keep careful track of your biz expenses, so you can make easier decisions about how much money you are really making (or losing).

[edkwon]

Originally Posted by f4phantomii

You should have an LLC for protection. Not required by any means, but is the reason they exist.

Depending on what state you are in, the process to set it up can be ridiculously simple.

So I consulted my friend who runs a mortgage lender business and he said if I have existing loans on the rental properties then transferring the title to a business entity comes with a lot of obstacles:

Yeah, the problem with a house in the LLC is that the Fannie/Freddie guidelines say the new investor/lender has to "approve" it being in an LLC. But the loan needs to close and get sold before it gets transferred to the new investor/lender, so there's no way to get their authorization upfront. I think it's basically Fannie/Freddie saying, "We don't want loans in an LLC." lol

And you can't just close as an individual (i.e. your name) and then put the title into the LLC after unless you ask the new lender first (because what do you do if they say "no"?). And you can't have the home in the LLC prior to starting the new loan as the chain of title (in the preliminary title report) will show it was once in an LLC and now out of it, so the Underwriter figures you'll just put it back in the LLC after (which may not be allowed). Complicated...

These issues/roadblocks may just be a CA thing or apply nationwide, I'm not sure. But good info to share nonetheless.