Oh S***!

WE LOST OUR BANK LOAN!

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There are many reasons why I wanted to document this build...

First, and most obvious, is to have something tangible our family can look back on...
End results are always great, but there is a degree of excitement that comes from seeing how all the parts & people came together to make the magic happen. But second, I wanted to create something that others could benefit and learn from.

I knew this process would be full of twists, turns, & obstacles; And by golly, it has done that in SPADES...

FUN FACT: After the housing market crash, major California banks stoped issuing conventional construction loans to owner builders...

Cool fact, but how does it pertain to us?

Well... essentially what this means is that you cannot obtain a bank loan if YOU are acting as the general contractor on YOUR OWN build. 

SECOND FUN FACT: Denny is our general contractor!

If you’ve put 2 & 2 together you can see now that we no longer qualify for a bank loan. 

Ahhhhhhhhhh!!

BUT, before we put the brakes on this entire operation we thoroughly explored our options:

A. Hard money loan. 
Hard money loans have steep terms and high interest rates. For 2 self employed people, financial “consistency” is not always easy, so we were quick to write that option off.

B. Hire another general contractor...
General contractors are NOT cheap, with wages ranging from $50K-$100K or more depending on the job. Nope, not going that route either.

Now, for option C...
i.e. What we ended up doing.

Our initial plan was to build a tiny house to live in during construction.
Originally our construction timeline was only going to be a year, so this seemed totally doable.
Well, subtract the bank loan & now our timeline just got extended... by a lot.
Placer County has strict rules pertaining to the duration of time you can reside in a non-permanent structure (such as an RV or tiny house) so we needed to think fast on how we could create a slightly more long term living solution within our now cash-only budget.

Solution. We could convert the space originally designed for storage over our workshop, into a habitable loft space!

As of now we’re still about $60K short but we’ll have just enough cash to weather in the exterior so we can get the shop back up and running!

We’re still building the tiny house to have a roof over our head while we finish the shop, and the rest of the home build will happen in phases as we earn the money.

Silver lining?

One huge benefit to all of this is that we’ll be living debt free, so all the money we would have been putting toward a mortgage can go straight into savings for the next phase of the build.

Scary... A little... but we signed up for this rollercoaster, and I still wouldn’t have it any other way! As the saying goes... “When life gives you lemons... Make lemonade.” Or in this case... maybe something a bit stronger... 😜

Kimberly Wilson