Page 1 of 2
#1
Been conflicted on how to proceed with living situation for many months and think I've finally reached the perfect idea!!! But know too little about the subject to know if it's feasible or not and all the logistics...

Background: I really like the idea of a decent apartment but can't reconcile with the fact that it would cost almost as much as a mortgage with no possibility of return on that use of money. At the same time, I hate the average house....old, bland designs, too much space that's underutilized, 1-car or no garage, exceedingly expensive around here (avg ~$500,000).

So I was talking to one of my closest friends who already owns a few houses. There's one that's fully paid off, in a good area but downtrodden neighborhood. We never thought much of this place because the house itself is a POS that he's renting out.

But just yesterday I remembered...this house has a huge backyard, like much bigger than the house itself....

What if I just bought partial ownership of the property from him, and then built a separate house in the empty space?! This is where every box could be ticketed: much cheaper than traditional property, will be fully new and how I want it (2 car garage, sleek modern design, relatively small and not that many rooms).

He liked the idea so much that he's offering to split the property ownership at no cost on the condition that I pay 100% of the building cost, saying that it would raise his property value. And down the line, if I decide to move out/sell, I would be getting a return on my portion of the ownership.

So now that I don't even have to pay for the property itself, that just leaves the problem of actually building another house. This is where my knowledge breaks down...

1. how much would it cost to contract out a build for a new house? I'm vaguely aware that there are "pre-designed" plans with aspects of customization which might be cheaper. Is 60k-100k a realistic range? How would financing work...because I assume this doesn't fall under mortgage category.

2. does zoning laws usually allow this?

3. anything else I should consider?? What do you think of this idea


calling all arbys

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
Last edited by Xiaoxi at Sep 30, 2016,
#2
Well based on what I've seen from the late night infomercials...
Voted UG User of the Year 2015 & 2016
Last edited by Joshua Garcia at Sep 30, 2016,
#3
Anyone familiar with real estate?

I know of it.
She was born in 1898 in a barn. She died on the thirty-seventh floor of a skyscraper. She's an astronaut.
#4
“Just to sum up: I would do various things very quickly.” - Donald Trump
#5
Quote by Mr E Meat
this is your brain

this is your brain on RT

Quote by Standard_A440
Given that you reside in the shade of the natural light of reason, I will defer doing your homework to you.
#6
Quote by Xiaoxi
Been conflicted on how to proceed with living situation for many months and think I've finally reached the perfect idea!!! But know too little about the subject to know if it's feasible or not and all the logistics...

Background: I really like the idea of a decent apartment but can't reconcile with the fact that it would cost almost as much as a mortgage with no possibility of return on that use of money. At the same time, I hate the average house....old, bland designs, too much space that's underutilized, 1-car or no garage, exceedingly expensive around here (avg ~$500,000).

So I was talking to one of my closest friends who already owns a few houses. There's one that's fully paid off, in a good area but downtrodden neighborhood. We never thought much of this place because the house itself is a POS that he's renting out.

But just yesterday I remembered...this house has a huge backyard, like much bigger than the house itself....

What if I just bought partial ownership of the property from him, and then built a separate house in the empty space?! This is where every box could be ticketed: much cheaper than traditional property, will be fully new and how I want it (2 car garage, sleek modern design, relatively small and not that many rooms).

He liked the idea so much that he's offering to split the property ownership at no cost on the condition that I pay 100% of the building cost, saying that it would raise his property value. And down the line, if I decide to move out/sell, I would be getting a return on my portion of the ownership.

So now that I don't even have to pay for the property itself, that just leaves the problem of actually building another house. This is where my knowledge breaks down...

1. how much would it cost to contract out a build for a new house? I'm vaguely aware that there are "pre-designed" plans with aspects of customization which might be cheaper. Is 60k-100k a realistic range? How would financing work...because I assume this doesn't fall under mortgage category.

2. does zoning laws usually allow this?

3. anything else I should consider?? What do you think of this idea


calling all arbys


Sounds like one of your closest friends would know best. Questions you must ask yourself before pulling the trigger:

1.What do you mean by "downtrodden area".

...

2. Why are you making this real estate investment into a partnership.

"What if I just bought partial ownership of the property from him,"

2a. Why is he selling it.
2b. Know the buyer, and do not settle for "too lazy to put the work into the investment" as a reason for selling.

3. How will you be getting a return on your ownership. You already mentioned it was a shitty area, (so who's buying?)
.
#10
^ Real property differs from non-tangible property (assets you cant feel in your hand, like options or whatnot. That's where the term real property comes from (not abstract secret-formula-of-Coca-Cola property))

Quote by M00NAGEDAYDREAM
[video="youtufW69PKpsPI[/video"]


.
#11
Quote by Fat Lard
1.What do you mean by "downtrodden area".
2. Why are you making this real estate investment into a partnership.

"What if I just bought partial ownership of the property from him,"

2a. Why is he selling it.
2b. Know the buyer, and do not settle for "too lazy to put the work into the investment" as a reason for selling.

3. How will you be getting a return on your ownership. You already mentioned it was a shitty area, (so who's buying?)
1. The neighborhood is not in the greatest shape, probably slightly lower income people. However property values are still rising and it is at the center of a fairly wealthy city that will suck on the teats of the federal gubmint for eternity (ie there's a lot of middle class people here employed by the many arms of the federal gubmint).

2. I'm not sure I understand. If it's not a partnership, how would I be legally entitled to any portion of the investment?

3. I think this is covered by 1 and 2

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
#12
2. Come on now, think honestly


With real estate investment comes long-tern equity profits. The gov't hasn't yellow-taped it so far, but we know they're a little slow.


BIG ONEv


...


What is the property you're buying? Will you be landlord? Or whoops happens bad gamble
Are you going to be living there? Do you personally envision that location going on to Greatness. How long are you willing to wait on this property to see a non-negative financial statement.
.
#13
Don't know where you live so can't answer your question.

Usually what you would do is:
Go to a couple of banks and see who will give you the best mortgage.
Then you'll have to contact the local town council/authorities and check out that zones planning policies, water, electrics, sewage etc.

After checking all that you need plans for your house to send in for planning permission and to give to building companies to see where you get the best price from the most reliable company. The size/design of your house is gonna greatly impact the cost of building.

Then, if you do decide to go ahead and build, you need to write up a contract with your friend about that land ownership deal.
People can turn real nasty when it comes to property regardless how close they are.

Also, what ever price you get, you can count on it being a bit higher, it's pretty common due to complications/plan changes.

And finally, what you really need is a new amp.
#14
Quote by Fat Lard

With real estate investment comes long-tern equity profits. The gov't hasn't yellow-taped it so far, but we know they're a little slow.
I don't think we're on the same page. I don't mean partnership as in a partnership business entity. That's why I didn't use the term partnership. I'm talking about personal, non-business co-ownership. Don't think that's very uncommon.

Maybe you assumed that because I mentioned renting out the primary house, but I'm not sure that you'd have to declare yourself as a business entity to receive rental income. Furthermore there are rental management companies that can do the legwork. I would certainly not be the landlord.

What is the property you're buying? Will you be landlord? Or whoops happens bad gamble
Are you going to be living there? Do you personally envision that location going on to Greatness. How long are you willing to wait on this property to see a non-negative financial statement.
The property is a single house.

I will live there, and the ownership will primarily be for the purpose of residence, not investment. Regarding value speculation, this isn't my primary concern. My main gripe is that renting an apartment around here would offer NO return on the money paid as well as too little difference from mortgage to effectively invest in stocks, so might as well build or at least recover equity with an owned property.

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
#15
Thanks UltimateGuizar!

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
#16
Quote by Xiaoxi
I don't think we're on the same page. I don't mean partnership as in a partnership business entity. That's why I didn't use the term partnership. I'm talking about personal, non-business co-ownership. Don't think that's very uncommon.

Maybe you assumed that because I mentioned renting out the primary house, but I'm not sure that you'd have to declare yourself as a business entity to receive rental income. Furthermore there are rental management companies that can do the legwork. I would certainly not be the landlord.

The property is a single house.

I will live there, and the ownership will primarily be for the purpose of residence, not investment. Regarding value speculation, this isn't my primary concern. My main gripe is that renting an apartment around here would offer NO return on the money paid as well as too little difference from mortgage to effectively invest in stocks, so might as well build or at least recover equity with an owned property.


oh


hell yeah dude
.
#18
Quote by UltimateGuizar
Don't know where you live so can't answer your question.

Usually what you would do is:
Go to a couple of banks and see who will give you the best mortgage.
Then you'll have to contact the local town council/authorities and check out that zones planning policies, water, electrics, sewage etc.

After checking all that you need plans for your house to send in for planning permission and to give to building companies to see where you get the best price from the most reliable company. The size/design of your house is gonna greatly impact the cost of building.

Then, if you do decide to go ahead and build, you need to write up a contract with your friend about that land ownership deal.
People can turn real nasty when it comes to property regardless how close they are.

Also, what ever price you get, you can count on it being a bit higher, it's pretty common due to complications/plan changes.

And finally, what you really need is a new amp.
You'll also need to look at the tenancy/rental agreement with whoever is living in the house. Again, not knowing the details of where this is, I can't say how easy it actually is going to be to just go "hey, we're turning your garden into a building site for 6 months, enjoy".
Quote by Diemon Dave
Don't go ninjerin nobody don't need ninjerin'
#19
Quote by UltimateGuizar
Then, if you do decide to go ahead and build, you need to write up a contract with your friend about that land ownership deal.
People can turn real nasty when it comes to property regardless how close they are.

this
#20


This should help.

Don't let your boat be empty, don't be a sunken dream
Don't let the boat regret thee, for what you could have seen
#21
Shop front rental on Oxford Street, City of Westminster is £2, 000, 000.00per year for a modest sized shop; Shop front rental in Croydon Town Centre on North End, Croydon is £65, 000.00 rental for something a little bigger.

That's all I know about real estate and not keeping it real on the estate blud.
Quote by laid-to-waste
look nigga, if you're chillin with 5 bros and 2 hos, you're gonna wanna pay attention to all of em equally. not moon over the hos forever and laugh at every shitty thing they say and just stare at them all night, like some of my mates do.
#22
Yea, but Oxford Street is £300 in Monopoly. It's not exactly the arse end of London's arse, like Croydon.
Quote by Diemon Dave
Don't go ninjerin nobody don't need ninjerin'
#23
pretty sure that real estate agents would be familiar with real estate
*your ad here*
#24
Do make sure to get the proper permits and contracts. You don't want to tear your house down because you missed some.
Quote by Carmel
I can't believe you are whoring yourself out like that.

ಠ_ಠ
#25
First question is can you legally build there? (Zoning etc. )

If so, builder costs are highly variable, based on location and availability.

If you act as your own general contractor you can save money, but I suspect you don't have enough knowledge to make certain you have all the permits etc. and to avoid getting fucked by your subcontractors.

So...you'll need to find a competent general contractor or 3 and explain what you want to do. They should be able to quote you the build by the square foot and that will give you an idea what it will cost.

If you can make it happen it sounds like a solid idea.
“Ignorance more frequently begets confidence than does knowledge.”
Charles Darwin
#26
I'll build you a log cabin in return for $50,000 and unlimited joyrides in your car and you can't get mad if I wreck it.
Quote by EpiExplorer
I swear this guy in particular writes for the telegraph or some shit.

Quote by Fat Lard
My name can actually be traced back to as early as the 1990s, it means "fuck off data miner"
#27
Quote by Arby911
First question is can you legally build there?


pretty sure the first question is whether the owner of the property prefers Bach or Chopin because that is definitely a deal breaker for xixi
*your ad here*
#29
Quote by Arby911
First question is can you legally build there? (Zoning etc. )

If so, builder costs are highly variable, based on location and availability.

If you act as your own general contractor you can save money, but I suspect you don't have enough knowledge to make certain you have all the permits etc. and to avoid getting fucked by your subcontractors.

So...you'll need to find a competent general contractor or 3 and explain what you want to do. They should be able to quote you the build by the square foot and that will give you an idea what it will cost.

If you can make it happen it sounds like a solid idea.
Woah...an Arby post free of snark

Thanks old broseph.

My friend talked to his realtor and unfortunately, we cannot build anything larger than a shed there. In order to do so, we'd have to petition with the city council to split the land completely as a new address and everything. That sounds like it could get hairy... fucking gubmint.... The realtor also pointed out doing this could decrease the value of both properties since it's unusual and may not have much marketability.

So now I don't know if that's worth pursuing. The other thing we're looking into is buying a foreclosure auction and building on that instead, but it will be more expensive.

Quote by ErikLensherr
I'll build you a log cabin in return for $50,000 and unlimited joyrides in your car and you can't get mad if I wreck it.
So basically a dollar for dollar trade with my car. Fuck naw. Besides you couldn't even start it > : ]

Quote by Ippon
Xiaoxi
If I remember correctly, you live in the Bay Area, yea?

If you don't mind, what zip code is the property?
Not sure what gave you that idea. It would be goddamn fantastic if I lived in CA and not shitty ass MD, but such is life for now... Zip code... let's keep it to a 15mi radius of 20850.

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
#30
Quote by Xiaoxi
Besides you couldn't even start it


so you drive a bicycle
*your ad here*
#31
It sounds like most of your questions were answered by your realtor. Real estate is something I am involved in with a share in several properties both residential and commercial. If you have a good job and plan to stay in the area for at least 5 years, my advice is to buy an existing small home in a decent neighborhood as your first house. Do it with your own downpayment funds and your own good credit. Find a reliable friend or two and rent rooms in the house to offset monthly costs. Once established you could cover 1/2 of your monthly mortgage payment with rental income and have a great experience with very little risk. I did this as well as one of my daughters and it worked out very well, resulting in a lot of equity allowing us to buy another house later with a fat down payment.

Foreclosures and build projects are best handled by someone with RE experience, great credit, a couple hundred thou in the bank and high risk tolerance. You can make a lot of money doing this but you can also get bogged down in red tape and have a bunch of cash tied up in an un-useable property for years. Not a great 1st house experience.
"Your sound is in your hands as much as anything. It's the way you pick, and the way you hold the guitar, more than it is the amp or the guitar you use." -- Stevie Ray Vaughan

"Anybody can play. The note is only 20 percent. The attitude of the motherfucker who plays it is 80 percent." -- Miles Davis
#32
Quote by Cajundaddy
It sounds like most of your questions were answered by your realtor. Real estate is something I am involved in with a share in several properties both residential and commercial. If you have a good job and plan to stay in the area for at least 5 years, my advice is to buy an existing small home in a decent neighborhood as your first house. Do it with your own downpayment funds and your own good credit. Find a reliable friend or two and rent rooms in the house to offset monthly costs. Once established you could cover 1/2 of your monthly mortgage payment with rental income and have a great experience with very little risk. I did this as well as one of my daughters and it worked out very well, resulting in a lot of equity allowing us to buy another house later with a fat down payment.

Foreclosures and build projects are best handled by someone with RE experience, great credit, a couple hundred thou in the bank and high risk tolerance. You can make a lot of money doing this but you can also get bogged down in red tape and have a bunch of cash tied up in an un-useable property for years. Not a great 1st house experience.
Thanks Cajun!

The thing is I really don't want to share the house. I'm done with having roommates. I could afford by myself and have great credit but it's just not a good buy, only the least bad buy.

What kind of red tape could I potentially run into?

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
#33
Quote by Xiaoxi
Thanks Cajun!

The thing is I really don't want to share the house. I'm done with having roommates. I could afford by myself and have great credit but it's just not a good buy, only the least bad buy.

What kind of red tape could I potentially run into?


In Calif. a hundred things can cause a build project to grind to a halt. Construction financing delays, zoning laws, failed inspections, utility connections, curbing and sidewalk requirements, plan changes, contractor delays, NIMBY complaints etc.. We saw them all on one of our commercial properties 30 years ago and the codes and regs are much tighter now. Porsche has been constructing a new experience center here in LA and their projected completion date was Apr. 2014. They might be up and running by Nov. 2016 and they have nearly unlimited resources at their disposal. A one year build project turns into a 3 year build project and you have to live somewhere. This is the risk, with no guarantee that you can build cheaper than buy an existing property.

Anything can be done but a build project has a lot of inherent risk. If you want your own place that is affordable now, find a 1-2 bedroom house or condo in a nice neighborhood and buy it, get the best rate you can on the loan and move in. You will build equity slowly but surely over time and have a good nest egg in 5 years with very low risk.
"Your sound is in your hands as much as anything. It's the way you pick, and the way you hold the guitar, more than it is the amp or the guitar you use." -- Stevie Ray Vaughan

"Anybody can play. The note is only 20 percent. The attitude of the motherfucker who plays it is 80 percent." -- Miles Davis
Last edited by Cajundaddy at Oct 2, 2016,
#34
Wow, that's definitely something I didn't take into consideration. But what you described sounds like commercial property which could be vastly more complex than a residential property, no?

Quote by Cajundaddy

Anything can be done but a build project has a lot of inherent risk. If you want your own place that is affordable now, find a 1-2 bedroom house or condo in a nice neighborhood and buy it, get the best rate you can on the loan and move in. You will build equity slowly but surely over time and have a good nest egg in 5 years with very low risk.
The housing here is so expensive that, depending on how this works out, it may still be cheaper for me to build a new house. And it's not expensive in the sense that it's unaffordable to me (mostly), but rather in the sense that the perceived utility / benefits aren't very good for the asking prices. That's why if I'm going to dump so much money into such a burdensome ball and chain, it better be exactly how I want it.

...modes and scales are still useless.


Quote by PhoenixGRM
Hey guys could you spare a minute to Vote for my band. Go to the site Search our band Listana with CTRL+F for quick and vote Thank you .
Quote by sam b
Voted for Patron Çıldırdı.

Thanks
Quote by PhoenixGRM
But our Band is Listana
Last edited by Xiaoxi at Oct 2, 2016,
#35
Quote by Xiaoxi
Wow, that's definitely something I didn't take into consideration. But what you described sounds like commercial property which could be vastly more complex than a residential property, no?


All construction projects have issues and usually cost more and take longer than planned. If you really want to build, start by talking to a bank to see how much construction financing you qualify for. That will clarify your possibilities. In the worst case, you lose your shirt on the deal but you are still young enough to recover and start over. Good luck!
"Your sound is in your hands as much as anything. It's the way you pick, and the way you hold the guitar, more than it is the amp or the guitar you use." -- Stevie Ray Vaughan

"Anybody can play. The note is only 20 percent. The attitude of the motherfucker who plays it is 80 percent." -- Miles Davis
#36
Quote by Fat Lard
^ Real property differs from non-tangible property (assets you cant feel in your hand, like options or whatnot. That's where the term real property comes from (not abstract secret-formula-of-Coca-Cola property))


How Can Estates Be Real If Our Non-tangible Property Isn't Real

Quote by bass.desires
staring at your forum avatar relaxes me.
#37
Quote by Xiaoxi
Been conflicted on how to proceed with living situation for many months and think I've finally reached the perfect idea!!! But know too little about the subject to know if it's feasible or not and all the logistics...

Background: I really like the idea of a decent apartment but can't reconcile with the fact that it would cost almost as much as a mortgage with no possibility of return on that use of money. At the same time, I hate the average house....old, bland designs, too much space that's underutilized, 1-car or no garage, exceedingly expensive around here (avg ~$500,000).

So I was talking to one of my closest friends who already owns a few houses. There's one that's fully paid off, in a good area but downtrodden neighborhood. We never thought much of this place because the house itself is a POS that he's renting out.

But just yesterday I remembered...this house has a huge backyard, like much bigger than the house itself....

What if I just bought partial ownership of the property from him, and then built a separate house in the empty space?! This is where every box could be ticketed: much cheaper than traditional property, will be fully new and how I want it (2 car garage, sleek modern design, relatively small and not that many rooms).

He liked the idea so much that he's offering to split the property ownership at no cost on the condition that I pay 100% of the building cost, saying that it would raise his property value. And down the line, if I decide to move out/sell, I would be getting a return on my portion of the ownership.

So now that I don't even have to pay for the property itself, that just leaves the problem of actually building another house. This is where my knowledge breaks down...

1. how much would it cost to contract out a build for a new house? I'm vaguely aware that there are "pre-designed" plans with aspects of customization which might be cheaper. Is 60k-100k a realistic range? How would financing work...because I assume this doesn't fall under mortgage category.

2. does zoning laws usually allow this?

3. anything else I should consider?? What do you think of this idea


calling all arbys



I have a good friend who sells real estate who also used to work at a bank assisting in underwriting construction loans. I sent her a link to UG thinking it was going to be this thread and I accidentally linked to the Guilt After Car Crash thread and she was really confused why she thought I needed her help.

Quote by EyeNon15
Thats too bad, I was under the impression I was arguing something profound


1 3 5 R
2 4 6
#38
Quote by Xiaoxi
Been conflicted on how to proceed with living situation for many months and think I've finally reached the perfect idea!!! But know too little about the subject to know if it's feasible or not and all the logistics...

Background: I really like the idea of a decent apartment but can't reconcile with the fact that it would cost almost as much as a mortgage with no possibility of return on that use of money. At the same time, I hate the average house....old, bland designs, too much space that's underutilized, 1-car or no garage, exceedingly expensive around here (avg ~$500,000).

So I was talking to one of my closest friends who already owns a few houses. There's one that's fully paid off, in a good area but downtrodden neighborhood. We never thought much of this place because the house itself is a POS that he's renting out.

But just yesterday I remembered...this house has a huge backyard, like much bigger than the house itself....

What if I just bought partial ownership of the property from him, and then built a separate house in the empty space?! This is where every box could be ticketed: much cheaper than traditional property, will be fully new and how I want it (2 car garage, sleek modern design, relatively small and not that many rooms).

He liked the idea so much that he's offering to split the property ownership at no cost on the condition that I pay 100% of the building cost, saying that it would raise his property value. And down the line, if I decide to move out/sell, I would be getting a return on my portion of the ownership.

So now that I don't even have to pay for the property itself, that just leaves the problem of actually building another house. This is where my knowledge breaks down...

1. how much would it cost to contract out a build for a new house? I'm vaguely aware that there are "pre-designed" plans with aspects of customization which might be cheaper. Is 60k-100k a realistic range? How would financing work...because I assume this doesn't fall under mortgage category.

2. does zoning laws usually allow this?

3. anything else I should consider?? What do you think of this idea


calling all arbys



I have a good friend who sells real estate who also used to work at a bank assisting in underwriting construction loans. I sent her a link to UG thinking it was going to be this thread and I accidentally linked to the Guilt After Car Crash thread and she was really confused why she thought I needed her help.


Quote by Xiaoxi

What kind of red tape could I potentially run into?


Have you asked your friend if the property was built upon an ancient indian burial ground? That always throws a wrench in the plan.

Quote by EyeNon15
Thats too bad, I was under the impression I was arguing something profound


1 3 5 R
2 4 6
#40
Quote by Xiaoxi
2. does zoning laws usually allow this?


afaik no
It was my privilege
Page 1 of 2