Tuesday, December 4, 2007

New kitchen design

Once we got a good look at the place after the demolition process began, we knew we wanted to open up the space between the kitchen an the dining room. So instead of rebuilding the wall the was it was, (see 2nd picture of 1st floor demo picture below- this sketch here is of of the other side of that wall) we want to widen the space of the door way to increase the flow. So far, it's just on paper, and as we know by now, anything can happen.

Predatory Lending Laws- a HORRIBLE idea

After months of deliberating over what, if anything, to do about the large number of defaults in the subprime industry and the lax lending and borrowing standards that led to them--the House has passed its answer: The Mortgage Reform and Anti-Predatory Lending Act of 2007. But while this bill purports to foster a well-functioning mortgage-market in which borrowers get affordable loans, it attempts to do so by making life impossible for lenders.

The bill tells lenders they may not engage in the undefined practice of "predatory lending"--examples of which include vague offenses such as offering loans that are not "solely in the best interest of the consumer" or offering loans that a borrower does not have a "reasonable ability to repay."

Since the bill offers no clear standard of a "reasonable ability to repay" or the "best interest of the consumer," if it is passed, lenders could be held liable for any loan a borrower fails to pay off. All an irresponsible borrower or unscrupulous lawyer needs to do is convince a jury in hindsight that the lender should have known better--and he can cash in at the lender's expense. To compound the injustice, the new law would apply, not only to those who initiate loans that fail, but to any financial institution that buys and pools loans made by others (a practice that makes possible better risk management and lower mortgage rates).

If you were a mortgage lender facing this sword of Damocles for any loan that goes bad, what would you do? Exactly what mortgage lenders will do if this legislation passes: jack up rates to account for the high risk of lawsuits--and likely avoid lending to higher-risk candidates altogether. Is this going to protect the lower-income home-buyers that "predatory lending" opponents claim to treasure? Is this going to yield a well-functioning mortgage market?

This bill is so bad that even many of the congressmen who voted for it acknowledge that it has problems. But, in the words of Rep. Spencer Bachus, R-Ala., they believe "we need not let the perfect get in the way of the good"--"the good" here being some kind of government crackdown on mortgage lenders to prevent the lending and borrowing practices that have caused lenders to lose billions and borrowers to lose their homes.

But no government crackdown is needed to promote borrowing and lending that allows lenders to make a profit and borrowers to keep their homes. If the market is left free to function, participants learn from their mistakes and adjust. By the nature of the mortgage market, it is both in lenders' long-term interest and borrowers' long-term interest for loans to be paid off. That's how lenders profit and borrowers keep their homes.

When bad loans are made, both borrowers and lenders are punished--and must correct course. Observe that Wall Street financial firms and direct lenders who engaged in lax lending are suffering huge losses (such as Merrill Lynch's $8 billion loss) and internal upheaval--and have changed their practices accordingly. The number of subprime, adjustable-rate mortgages has declined by 50% this year. As for the middlemen who tried to make (and often succeeded in doing so) a quick buck on dubious loans, their reputations are sullied and their business has dried up.


Monday, December 3, 2007

OT: Foodie Alert

We spend a lot of time in the kitchen, when we're not working. As such, we tend to be hip to food and seasonality. Folks, the Pacific Northwest truffles are in and they are the best I've seen in years. Madison's produce at Findlay Market carries them all season long. If you've never had the black truffles, they are utterly amazing. I didn't even know we had them in this country until 9 years ago.

I bought two fairly large truffles on Friday for abut $17 bucks. That's enough for 3 meals, but we'll only use them in two. wink.gif. So, $8.5 per is pretty reasonable.

I have to tell you, a truffled hen (or better yet, a capon) is something to experience. What I do is start with an unglazed roasting pot (romertopf), but you could probably use any covered roasting pot. I then get the best quality bird I can find. Fresh and Amish is my preference, but free range is a good call too. I season the cavity and stuff it with a couple shallots, a little garlic, fresh sage, and a few bits of truffle, usually end slices. Then I tuck two cloves of garlic under the breast skin and four slices of truffle. I'll also tuck a little truffle under the leg skin. You should have a half truffle left. Reserve this for later. Brush the bird with oil or melted butter, and season with kosher salt and pepper. Place the bird in the pot.

Peel and quarter a small onion and place around the bird in the pot. Peel and roughly chop a carrot and arrange around the bird. Add 4 peeled cloves of garlic, and 6-8 small, peeled, oiled and seasoned new potatoes. A few peeled shallots and extra sage leaves are nice too. Add enough DRY sherry or white wine to the pot to bring it up to 3/4" above the bottom. Cover and place in a cold oven. Set the temperature at 475 and roast for 1 1/2 -2 hours (depending upon your oven and the size of the bird). You may want to uncover at 90 minutes to brown the skin and potatoes more. If you do, check it after 15 minutes.

When the bird is tender and brown, pull it and let it rest only 5 minutes. Keep the pan juices hot. Preheat plates and add potatoes, whatever carrots and garlic you might want from the pot. Carve the chicken, then thinly shave truffle slices over the top of the meat. Spoon the hot pan juices over the truffled meat. The room should become infused with the perfume. You can serve this with buttered and dilled green beans. If you want to go over the top, an endive gratin works really well with a capon for Christmas dinner.

A fine red wine is called for here. I like a good, velvety (not tannic or acidic) Rosso. I'm thinking that a Corbieres might work well too.

If this isn't one of the finest dinners you've had, I'll be amazed.


Endive Gratin

Wash and trim endives. Halve, length-wise. Place in acidulated water while you work. Blanche the endives in lemoned and salted water (2 per peson, I think) for 2 mintues. Gently drain and dry. Wrap each endive half in a thin slice of prosciutto. Arrange in a buttered gratin dish or lasagna pan as they are just touching. Sprinkle fresh chopped thyme (about a teaspoon) over and around. Top with a little grated Gruyeres cheese, a little (1 Tb) parm, heavy whipping cream to cover 1/2" of the endives, and top with bread crumbs and dot with butter. Bake it in a 350 oven until golden, the cheese is melted and the cream is bubbling, about an hour, but check it often.

You'll probably want a crisp frissee' or bitter greens salad to finish this meal off and cleanse the palate. Maybe some pears and St. Andre cheese for dessert with a Moscato d'Asti.

Thursday, November 29, 2007

Demolition Underway

Well, I think most people think this is the scariest part of the project. I know for a fact that if my Mother-in-law saw the house at this stage she would have a seizure. For this very reason, we are not allowing her to see the house. No way, Jose. She would have nightmares. And then call us about them just to make sure they weren't true. The problem is that what she might consider a nightmare, I call progress.

I am loving this stage. This is not scary, this is exciting. This is where we get to see what we're really in for. Peeling back the layers of what others have put up before us, seeing where someone put some love into their home and where others just threw duct tape up to fix a problem. It's a history lesson, one family or generation at a time and going back 121 years.

I took pictures. I couldn't make it up to the third floor as the debris was too thick in the stairwell, but I managed to climb over the plaster, drywall and lathe to get to the second floor. M, who keeps reminding me and everyone at Home Depot that he is a LEAD CERTIFIED blah blah person, made me even wash my shoes when we left the house. There is a LOT of dust, a lot of it leaded. So no kids on premises, no food, no cigarettes, no dusty little fingers putting dain bramage in this skull, thank you very much.

Anyway, the dumpster is showing up this week. We wanted to put it in the backyard so as not to block the sidewalk and mess with traffic, (and to ensure that anyone with a broken toaster or carpet scraps didn't dump their free garbage in our paid-for dumpster) but there was concern that the backyard would get muddy and they'd have trouble getting it back out, so we're setting it on the street in front of the house. We'll have to be on watch to make sure it doesn't fill up before we actually get the demo debris out of the house into it, but when it arrives, the piles of debris will move their way outside, but until then... it kinda looks like this:

First Floor:


Second Floor:

Tuesday, November 27, 2007

Credit Where Credit is Due

When this project got going, it had all the earmarks of a potential disaster. First, you have a conservative bank, negotiating with a city bureaucracy, mix in a non-standard loan requirement and a set of riskier rehab loans, and then top it all off with the worst mortgage crisis that this country has seen since the depression.

What do you call it? Fiasco Flambe'?

As a matter of fact, no. Every step of the way, our banker, Mark Koenig and our contacts at the City, Roger, Rhonda, Archie, Tom, and Ashley have managed to be responsive and flexible. I would have bet you dollars to dough nuts that given what problems arose, we'd have failed to put this deal together.

I would have lost that bet.

We are now owners of a rehab project.

It was simply amazing, to my mind. If you have a rehab project that you want to get funded in Covington, call Mark Koenig at Advantage Bank at: 859-363-2820.

I don't think you'll find a nicer, more ethical, more thorough guy. No smoke up your skirt from that guy, and nothing but the straight dope. Advantage Bank, too, is very committed to redevelopment in Covington. They've priced their loans and fees very competitively. They also hold much of their own paper, which at this point is a major advantage given the banking and lending mess.

Thursday, November 15, 2007

Get the Lead Out!

We mentioned this concept earlier, but there's another FREE seminar coming up, so we'll reiterate.

Folks, people get hysterical about lead or they totally ignore the serious risks of exposure to deteriorated lead paint. Both things are bad. There's no need to panic and there's also no need to remove every bit of lead paint from your home or building, in my opinion. You do need to address deteriorated surfaces, however, and do proper clean up. You also need to use proper practices when stripping paint and working with windows and doors (for example).

As I was telling a (well-liked) contractor today, I'm not particularly worried about two adults being exposed to a little bit of lead dust. We've likely been exposed to much much worse. What I am worried about is someone bringing lead dust home on their clothes and exposing a young child, or pregnant wife to it...or leaving lead dust in their car or truck for the family to be exposed to every time they ride with him... The effects can be tragic.

So, get educated. It's not a big deal, and it could save you incredible heart ache.

Lead Safe Work Practices Class

Offered on two dates (pick one date or the other; you are not required to take both)

Dates: Saturday 12/1/2007 and Saturday 1/12/2008

Time: 8:45 am to 5 pm

Northern Kentucky Health Department
Lower Level
610 Medical Village Drive
Edgewood, KY 41017

Northern Kentucky Health Department is located at the corner of South Loop and Medical Village Drive Edgewood, Near St. Elizabeth South.

NOTE: Mapquest places our address near but not exactly correct. Just remember it is at the corner of South Loop and Medical Village Drive. Look for the Health Department sign.

Who is the class for?

· Homeowners doing renovation, repainting, or remodeling work where lead-based paint may be encountered

· Building supervisors and landlords

· Contractors undertaking projects with requirements for performing interim controls in Federally assisted and owned properties

· Homeowners and property owners associations

· Community and social service organizations

· Home (or code) inspectors

· Maintenance workers

· State and local municipal agencies

What will be covered?

This class will teach attendees lead-safe work practices and the strategies for implementing them. Many homes built before 1978 contain lead-based paint, so it is important that renovation, remodeling and repair activities use methods that reduce and control dust and debris created during work. Even a small amount of dust can pose a serious health risk to children and families.

Is there a cost involved?

Class is free of charge

Is there a deadline for registration?

Friday 11/30/07 and Friday 1/11/08

To register call Tony Powell at 859.363.2049
or register online HERE

More Here

Saturday, November 10, 2007

Rehab As it Should Be

Last night, we took a perusal of "The Brooklyn Townhomes". This is a set of recently renovated town homes, here in Covington. One block from The Ascent at Roebling.

These are sexy and they honor the history of the buildings. They're also BIG. 3,000 square feet. Big foot prints. Rooms that a man can move around in. Wonderful wood. Also a lot less than high-end housing elsewhere.

Check out the listing here:

The Brooklyn Townhomes

If you're looking for low maintenance, high sex-appeal living, walking distance from Cincinnati, and with a $1,000,000 view from the roof, this is IT.


Friday, October 26, 2007

Buy This House?

This house is a perfect candidate for a rehab.

It's cheap. It's in a "happenin'" area that has already "turned the corner". It's set up as a two family so you can live in one part while you work on the other. There could be some help from the city, if you qualify.

I suspect that you could finagle an off-street parking easement too.

Plus you'd have some really cool neighbors.

Take a peek.


Join us in the adventure!

Thursday, October 25, 2007

The Toughest Job in Town

I've been speaking with the city's historic preservation officer, Ashley recently. Ashley is nice, dedicated, and very smart (recently competed on Jeopardy!--I think she wuz robbed). I also think that Ashley has to have one of the toughest jobs in town.

"Huh? How hard can being the historic preservation officer be?"

Well, think about this: Ashley's job is to PRESERVE the historic integrity of this wonderful city. How does one do that?

By saying, "No"

That means when people get a permit to "improve" their home in a historic district with glass block windows, she has to tell them that they can't. As it turns out, in a historic district, there's a lot that one can't do. Basically, if you are replacing something, you have to do it with original materials in most contexts. That can be expensive, sometimes prohibitively expensive. Also, it may well be counter to what the homeowner envisioned.

So, Ashley, all too often gets to be the "spoiler". She has to be the bad guy. What kind of fun is that?

In every other business, if you do a good job, for the most part people will be happy with you. Maybe folks will even praise you. Probably not Ashley, though. I imagine that she gets mostly resistance, anger, frustration, outright obstruction, and accusations of bias and unfairness.

And I understand how folks must feel. It's their property, after all, and one usually buys property because one wants all the rights of ownership--not to be told what they can and can't do. Also, folks have to often think it's terribly unfair to be picking nits over the muntins on the windows, when the neighbor is an ugly pre-fabricated pawn shop or a nasty crack house with no gutters at all, let alone wooden box-gutters.

The thing is, the historic preservation officer only gets to "preserve" in certain instances. New construction in historic zones, major renovations in historic zones, and when city or HUD money is being used on a historic property (and probably one or two other instances that I'm not aware of). They have to use every window of opportunity to try to save the history and integrity of the wonderful architecture of this town, and there aren't that many chances.

The good news is that longer-term, those seemingly horrific intrusions into your property rights have some nice pay-offs. I've seen what happens when the history is preserved in a neighborhood. Drive up and down the Licking Riverside district. In my memory, this area was once pretty scary and it had to have seemed crazy to expend much effort to preserve the history back then. But now, it's still here and mostly restored, and it's a draw. It's beautiful, and it's tougher and longer lasting than many realized. Folks come here just to see the history. Property values are "robust" and that rewards the long suffering home owner. Additionally, often the quality and wisdom of the original materials and design are far superior to anything it might be replaced with.

Also of note, home owners and prospective home owners and rehabbers would be well advised to research their property's status. Is the property in a Historic Overlay Zone? Are there restrictions? Will there be any city or HUD money used? If so, it will make a lot of sense to get in touch with the historic preservation officer. Find out what can be done and what can't be done FIRST, before commitments and plans are made. When you know what you're getting into, it's a lot easier to work with the preservation officer instead of feeling like you're at odds.

And Ashley, there will be legions of future homeowners who will be eternally grateful that the 120 year old, old growth, irreplaceable windows and sashes were saved and preserved. They will have heard their neighbors cursing the cheap vinyl windows that are failing after 10 years and be glad you were here, fighting the good fight. I know I am.

Friday, September 28, 2007


If you're contemplating doing something like what we're doing be prepared. Yes, do your homework-- you knew that already. Be intellectually and emotionally prepared.

Buying a home is about as stressful a thing as a person does besides losing a family member or getting divorced. The emotions run high and there's a whole lot of emotional investment that can take place...and that can cause problems. Emotions make people make irrational decisions. All of this heightens stress which can cause even more irrational decisions.

Now some of this is absolutely unavoidable no matter what you do. It does help to understand that there are going to be tons of emotional whipsaws and to cut yourself (and your partner) some slack. It also really helps to view the project as simply a business venture. If you can, be willing to walk if it doesn't feel right. That gives you power and power reduces the stress and a clear mind is much more likely to get you through the process successfully and with all portions of your anatomy attached.

If that fails, I've also found that red wine helps quite a bit too. :)

Time to recycle Amy


Tuesday, September 25, 2007

Covington Rocks

Actually, not just Covington, but much of the rest of Northern Ky, too.

To start, the DMV Rocks! I know, you think I'm nuts. I'm a former Ohioan. I would have thought I was nuts too. But let me tell you, the folks at the Kenton Co. Clerk's office are wonderful. First, they are thorough. When you call and ask what is needed to transfer a title or get new plates, or whatever, they tell you EVERYTHING. Secondly, they are efficient. I never wait for more than a minute or two to get my tags. Not in 7 years. Thirdly, they are all about "customer service". They're polite, nice, willing to go out of their way, and they have such niceties as a phone with every major auto insurance company AND a public fax so that you can have your proof of insurance faxed to them. And never a frown. I don't like paying tax and the various license fees, but they never add insult to that injury. Those folks are everything civic servants should be. BTW, they're pretty great to work with when you get a marriage license too.

Next up is the City of Covington. Now, these folks are bound by the same silly politics that every other city has to deal with, which is unavoidable, but I have to say that they really try hard to get out of the way of businesses and to make Covington a great place to locate. Things get DONE here. Cincinnati is still talking about the Banks after years and a billion dollars, but the Ascent went from a concept, to ground breaking in a matter of months and is now virtually done--and it's amazing (http://www.yourascent.com/ ).

I'm not saying this local government is perfect, but I've seen an awful lot of successes and I've personally watched the City Commissioners and Mayor put in long, long hours listening to concerns, dealing with the boring, annoying and unavoidable minutia, and getting important things done, regardless. Now, maybe I'm wrong, but to a man (or woman), regardless of party or politics, they all seem to deeply care. Frankly, one look at this town and it shows. And, by the way, it's not just the big guys--the folks that are "on the ground" clearly care quite a bit. They seem to be coordinated around the shared vision of a vibrant community. Without going into too much detail, I just want to say that there are some typically under-appreciated folks working for the city who ought to be very proud of their work. I'm impressed.

But wait, there's more!

The folks at the Northern Ky. Area Planning Commission have managed to get almost everything a builder, business person, or homeowner might need under one roof. In fact, you can even get a permit on-line! On-line! http://www.nkapc.org/ Not only that, but from our experience so far, the folks down there ALSO share the same responsive attitude.

It just seems like all the things that local governments seem to screw up for folks in other areas, don't get screwed up over here. The necessary functions of government seem to occur with a minimum of inconvenience to the citizen. In fact, it sure seems like the only times that there are hassles, it's where the state or federal government regulation interferes with the local operation.

So, maybe these guys aren't perfect, but they're very, very good and they deserve a serious "atta" from us. They kick the stuffing out of anywhere else that we've ever lived and they are succeeding in turning this area into a place that anyone would want to live, work, and play.


Sunday, September 23, 2007

Can we or can't we?

OK, follow up on a long absence: The bank extended out 45 day deadline to get the loan with no points attached. We now have an additional 30 days to secure the loan at the same rate, even though Mr. Bernanke just dropped the interest rate .5%. Gee, that ought to make things work better (yeah, right).

Final floorplans are still MIA, but our plumber, HVAC guy, and electrician are working off of the plans I made myself from our own measurements. I'm sure I'm missing a lot of the uber-technical stuff, but hopefully, by the time we need to submit the final plans to the City, we'll have something worthy of approval. We got new estimates for the roof & boxg utters, as well as for the demolition, so it looks like we can shave off a few thousand off of the budget, which is what makes the deal work for the Bank, it seems. Our banker is earning his keep on this loan. A lot of tough sells to us in a tough environment with a lot of barriers thanks to the complexity city loan(s).

Frankly, the hubby and I sat down and had another serious talk about financing this project. The Bank seems to want to lock up a lot of our cash in order to secure a larger (potentially unnecessary) loan. Their main concern is that we have enough funding to finish the project so that if anything goes seriously wrong, they won't lose on the deal. Understandable, they're in the business of making money-- aren't we all?--and they are more risk averse in this environment, too. The problem arises when and how the bank and the City disburse the loan amounts. If you thought the City just hands you a Rehab Loan check for $25K, you'd be wrong. Same goes for the Bank. They only get you the funds (limited by the estimates of the work yet to be done) as they see fit as you need it, and as certain goals are met.

And they won't be giving us anything to get things started. That's apparently on our shoulders.

The Bank wants to disperse funds only after the City lends us the Rehab loan. They also want us to use out funds first. The City won't give us any funds directly but only to the contractors who are doing the work for us. Which of course make me wonder, what if we're doing the work ourselves? How do we get the money then?

Especially when the Bank has required that we keep $XXK (significant sum) in a CD at the Bank that we can't use even if we absolutely need it.

If we get into a cash crunch during the first month of the project, how are we supposed to meet the goals set by the Bank and the City? I'm just starting to feel that someone's trying to push us into a corner financially so that we are completely dependent on the good graces of others. (late addendum by M: Evidently the way to make the project work is to let your conscientious banker and your amazingly responsive city folks figure it out with each other, as they did)

I don't like corners.

If this project doesn't start making me feel like it's going to benefit us and not just the Bank and the City (not that either hasn't been trying very hard to get this project done), after the conversation I had with my husband, I am fully prepared to walk away.

I HAVE to be prepared to do that. Everyone does. Real estate and homeownership aren't "can't lose" propositions. There are risk risks that folks are only beginning to grasp. You can't get into the mindset of "oh, everything will work out just fine" because sometimes it really doesn't. Remember, if it's not in YOUR best interests, walk away. A.k.A.: "If you find yourself in a hole, the first thing to do is stop digging."

And now for the entertainment part of the post.

Have you ever felt that someone was trying to get your goat-- trying to get you to say or do something in order to catch you making a mistake? I've been feeling that a lot lately...

I've always wanted to respond to silly questions like the Senator in the clip below. I couldn't stop laughing. I've watched it 3 times today already.......

I can see it now...
Bank: "So what are you going to build the walls with in your rehab project?"
Me: "With the finest construction materials available that fit the code requirements in the state of Kentucky."
Bank: "Like what?"
Me: "Well cardboard's out."

Watch and enjoy.

In my case, I just hope the front doesn't fall off of the house.

Friday, September 7, 2007

Lead Safety vs. Lead Hysteria

I'm one of those sorts who views any "health epidemic" with a seriously jaundiced eye. Most times, the louder the drum beats, the less I should be concerned and the more it's going to cost me. I had been viewing the lead paint issue the same way.

Due to the undertaking of this project, however, and the fact that the missus is still of child bearing age, I decided to take the Lead Safe Work Practices course on my birthday. It was sponsored by National Paint and Coatings Association and was hosted by the Northern Kentucky Health Department (more info at www.leadsafetraining.org).

I have to say, it was worth while. I had a few take-away notions:

  • Lead is both far more dangerous in some contexts than most folks realize, and yet less dangerous in other contexts than many think.
  • Don't ignore serious lead risks, but don't panic, either. It's not that big a deal to deal with lead paint hazards in a safe manner, and it can be extremely dangerous to do a "quick and dirty" removal of a lead hazard.
  • Lead paint is not nuclear waste
  • Even very small amounts of lead can be a very serious threat to children and pregnant women.

I urge anyone who is going to be undertaking a rehab or who does work in older buildings to take a Lead Safe Work practices course. Those dusty work clothes that you come home in, or that bathroom remodel you're doing could be causing neurological and developmental problems in your children. It won't take a whole lot to dramatically decrease the health risks to your family, but you have to know what they are before you can do anything about them.

The good news is that these courses are often free or very affordable. The Northern Ky. Dept. of Health plans to be offering them quarterly (www.nkyhealth.org) . Cincinnati is also offering these courses.

The University of Cinncinnati and Cincinnati Health Department
Combined Lead Safe Renvoator/Essential Maintenance Courses
For more information or to register, contact:
Barbara Boylan (513) 681-4995

Course Cost: Only $25
2007 Course Dates:
Wednesday, September 5th
Friday, September 28th
Wednesday, October 3rd
Friday, October 26th
Wednesday, November 7th
Friday, November 30th
Wednesday, December 5th
All courses are scheduled from 8 a.m. to 5:15 p.m.
All courses will be held at the Cincinnati Health Department

Work safe folks.

Thursday, September 6, 2007

Post Rehab Appraisal Due today

It's what everyone's waiting for now. Nothing proceeds until the post rehab appraisal comes in and can be verified by both the City and the Bank. To get the City's Rehab Loan, the PRA can't be above a certain value; to get the Bank's Rehab Loan, the PRA can't be less than a certain value. Goldielocks-appraisal.

There's a fine line here and it's all coming down to this. We should get the news today.

Apparently one of the problems is that the Appraiser doesn't have much to go on by means of comparable properties that have been rehabbed in our area. There's a *Historical* area nearby (by 'nearby' I mean we are apparently cut out of the historic district by two homes on our block- nice gerrymandering there, guys... the building across the street-- is In. The Buildings to the North -- are In. We -- are out. Bummer.) So apparently we can't be compared to the homes on the rest of our block or a block away, even though they look about the same, are about the same size, appear to have been built at the same time... Harumpfh. We're just not Historical enough.

Come on appraiser.... baby needs a new pair of rehab loans.

Wednesday, August 22, 2007

Almost there.

Well, we're getting closer, but the bank just called and asked that we deposit $13K at their bank. They are really nervous about the whole mortgage business. Lehman Brothers just closed their sub-prime lending operation today and are laying off 1200 employees. What a time to get a rehab loan!

Friday, August 17, 2007

The Bank and the City

I don't know what our City guy said to the Banker, but I absolutely love him. He spoke a long time on the phone with our banker and made the banker very pleased with the situation. I guess that's all that really matters.

So we can go ahead with the rehab loan as planned.
Bullet dodged.

Now on to the "Post Rehab Appraisal". This is where we tell the bank all of the work we're going to do to the house to increase the value. This part includes figuring out permit fees, material costs, contractor appraisals, and everything we add to increase the value of the (banks') property so that if both of our heads fall off, the bank can reclaim the value of the loan.

I want this in our kitchen:

Apparently is costs about $4k.

I need to figure out how to make it/find it at about 25% of that cost. It's the first real project I've got to start on. Wish me luck.

Friday, August 3, 2007

When it rains, it pours.

OK, so it's not really news that the Sub-Prime Lending market is imploding. Yes, we knew that. Hell, we saw it coming a year ago. But COME ON!

We've been talking with a local bank who offered us a decent deal on a rehab loan. There are lots of twists to this loan as we are self employed and well, a bunch of idiosyncrasies. But as of the start of this week, our guy at the bank basically says, "Yes, we've got you a rehab loan." We were happy. Things were working out. We should have KNOWN that was the first sign of the apocalypse.

So after what... 2 days... our rehab banker calls us. "Oh, by the way, we're not doing this rehab loan program anymore. You have 24 hours to complete the loan application to lock it in or we can't help you." --WHAT?!?! OMG,so now we have until the close of business ( I hope) to scurry our little beehinds over to the bank with a check for $xxx to seal the deal.... oh, but wait... we can't do the rehab without the City agreeing in writing to sell us the house and to guarantee the rehab incentive loan from the City. Argh!!!

OK, well that shouldn't be too hard. The City Commissioners voted to sell us the house, we just need it in writing. That's public record, right? And the Rehab Loan Application was sent in on Monday. They already agreed (in principle) to give us a rehab loan... like MONTHS ago. What's the big deal?

The big deal apparently is that the City had an appraiser head over to the house. He estimated the value of the house at $5K over the AGREED to selling price, and apparently the city may not be able to sell us a house for less than the appraised value... even though comparably priced homes are HABITABLE-- and ours is decidedly NOT habitable. And, the application process is more in depth than the bank loan. Looks like trouble. So where does this leave us?

It leaves us with 2 hours to have the City approve the Rehab Loan and get the paperwork to the bank and get the bank to agree to the terms of the City. We have six hours for us to get a check over to the bank, assuming all conditions are met, and IF the City doesn't change their deal to sell us the house at the price we proposed last year.

Hubby is rapidly trying to get the bank and the city to communicate, hopefully to get everything ok'd and approved before the Rehab loan offer goes away. Apparently the bankers are terrified of all these sub-prime loan fiascoes blowing up.

I gotta admit, I understand.


Tuesday, July 31, 2007

Removal of the fireplace?

Novel idea:

You've got a 144 year old home with two fireplaces. One has been used recently (on the West wall) although probably shouldn't have been, and the second is in the center of the home, sealed up for probably 50 years or so, unworkable and unusable. So why keep it?

Very exciting recommendation from our architect: if you're gutting the place, why not take down the fireplace bricks, fix the roof, and use the 144 year old bricks on another project? Since the basement access is currently ONLY from the exterior of the house, could we maybe use this new unused space where the fireplace WAS on the first floor to access the basement from inside the house? Hubby thinks a trap door concept would be cool, and I tend to agree, if it's workable.

It could also open up the second floor quite a bit, (see image) where we plan on having the Master Bed, Bath and office space.

The real question is whether or not this is a structural load bearing wall. If so, plans may be of naught. The green outline in the image is of the original construction. The addition to the North (3 floors of an addition) were added on later on (not sure how much later) but it's clear that the wall that the second fireplace is on was once an exterior wall.

I'd love to clear out the whole area, but not sure if we can do it.

In other news, it looks like we've got a deal on the rehab loan. After many weeks of negotiating with our banker, we've finally come to a meeting of the minds... and wallets. M is thrilled.

Update: We did take down the fireplace... partially, but the design we went with is NOT the one from above. We moved the bathroom from the West side of the house to the East side of the house, so as to have a straight hallway down the west wall, instead of the 'rabbit warren' hallway hubby referred to it as.

It's a minor adjustment I didn;t think we'd be able to make at first due to the plumbing, but our plumber assured us he could do it, so we did.

Thursday, July 26, 2007

Rehab....No no no

It's just TOO appropriate.
Love Amy Winehouse-- wooot!

In other news, we heard back from our HVAC guy and our plumber and it looks like we're still on. If we get the floorplans by Monday we'll get together and start the REAL planning process for routing the ductwork and pvc pipes together.

Then the demo.... but we still need to PAY for the place and get permits for demo before we can start knocking it down. Darn paperwork.


Why rehab and not buy new II

Here's more reasons to rehab and not buy new.

Over the past 15 years, the real estate market has been in an unprecedented boom. Historically, it is very rare for standard residential real estate to appreciate much more than the rate of inflation, plus a little. And that's over time. Yet until last year, even slap-dash subdivision new construction has been appreciating as well as or better than the stock market (depending upon your market).

That wasn't sustainable. Now, the folks who mistook an extremely rare and powerful real estate bull market for genius are learning that "Trump they ain't".

From here into the foreseeable future, the only real estate that is likely to appreciate much more than GDP will be improvable, location-specific, special situation properties. New construction is not "improvable", but rather "improved" and notably NOT special. That's reason number one.

In most cases, one can buy a rehab for less than what it would cost to build something comparable from scratch. That's reason number two.

Reason number 3 for rehabbing vs. buying new is that you cut out the middle men. When you buy things for your rehab, you're getting them at the best possible price that you can find. You are not paying a marked up price. Additionally, you aren't paying for the mark up on subcontractors labor and you aren't paying for a builders profit. All those factors have to be overcome when you buy new before you can make $0.01 one. Those factors also increase your risk when or if you want to refinance--if you don't have enough real equity, you can't refinance.

Reason number 4 for rehabbing vs. buying new is that things get to be the way you want them. Not the way some cookie cutter designer/builder wants them. If we want to have 2 stoves, we can design our kitchen that way. That won't fly in new construction (at least not without major cost).

Reason number 5 for rehabbing vs. buying new is that you KNOW the property is well-built because it has been there for a century and a half. With new construction, they're often experimenting on you. Many new building products fail within the first 10 years. The windows in a rehab might have lasted 100 years and with a little love and care will last another 100 years.

Do I sound like I'm selling myself?

If so, it's probably because we need ongoing validation of this decision. :O

Tuesday, July 24, 2007

Why rehab and not buy new

My In-laws are nervous about us doing a rehab instead of buying a new, or relatively new home. Ahem...they moved into theirs about three years ago and we've already been over to fix their vinyl siding. Oh, yeah, and there's THIS: (Dow Jones Home Builders in the Dumper)

(click to enlarge)

Keeping it real

Click the image to enlarge.

Loan Applications and Lead Paint

The City is pending the sale of *our* home (I guess I can call it that now) on a loan application from the city for the Rehab. Looks pretty straight forward, but you never know. We need to get it to them last Friday, apparently.

Using the estimated value of when it will be completed, we're thinking the value might be significant. Of course, after the roof caves in and the river floods, that number is subject to change. Right now, I can't see it valued at much at all. The stench of kitty makes that seem a little high. More pictures to come.

We were supposed to have the floor plans started today, but there's a hang up with our guy's current employer. We should have those started by Wednesday. Then we need to contact the Plumber, the Electrician and the HVAC guys to make sure they still have time scheduled for us and that the estimates we've gotten over the past year still are applicable. Otherwise, we'll be looking for new contractors.

Oh and does anyone know what a hassle lead paint REALLY is? Apparently, before we can start on demo, we have to make sure our general contractor has taken a lead paint class (Free to the public, but takes 8 hours) so they know about lead removal practices and what your children will look like if they chew on it. How much lead to you really have to ingest before you loose a brain cell.... anyone?...Anyone...? And anyway, the city does a "risk assessment" of the property for $750 and if it looks like there might be lead (and there probably will be) they'll do a lead paint test which will cost about $500. This will tell us what we already know, and that we'll have to be uber-careful and wear masks lest we rot our brains and revert to tick-picking apelike creatures.

Good news: Hubby M agreed to take the lead paint class so I don't.
Bad news; It's on his Birthday.

Wifey H

Thursday, July 19, 2007

It's official.

After first looking at "our" home, I knew I wanted it. None of those carbon-copy-paper-thin walled homes for us. Newer houses give me the Ugh-shivers. I wanted a home that had already stood the test of time, and we found one. A three story ~2400 square foot brick home built between 1865-1868.

We found it a year ago.
Why the delay? Well, the City owns it.

But on July 17th, 2007 the City Council officially agreed to sell it to us in a 5-0 vote. Actually, it probably was an event free vote because of all the time the housing department took to get things right. In any case, it's uninhabitable, needs new plumbing, new electric, a new HVAC system, and maybe a new roof and smells strongly of cat urine. ---What have we done??!?!