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Started By
Message
Building new home on current lot
Posted on 6/9/20 at 10:09 am
Posted on 6/9/20 at 10:09 am
I am currently deciding if I want to move from my current house as my house is starting to get too small with my second child due next month. I currently live in a 3 bed 2 bath 1400 sq house with about $100K in equity in it. We have been looking at doing a new build in the same city we live in. My issues I am currently having is I love the location of our current house and I really like having a very large yard. We are currently a corner lot in the neighborhood with about half an acre of land which is not common.
Here is my question: I am open to potentially looking at completely tearing down my house and building on my current lot, potentially a 5 bed, 3 bath and around 3000 sq ft. I dont know what happens with the equity that I currently have in the house: does that go away or can I use that to the new build. My other thought is that all of the other homes in my neighborhood are build in the early 80's. We have about 250 homes in our neighborhood and I dont know if it would be smart to out price the neighborhood even though I would have plans to stay in this house long term. My hope is this will help encourage others in the neighborhood to do the same, but I have no idea is that would happen.
Is this a wise thing for me to do or would it be smarter to just move to a new home?
Here is my question: I am open to potentially looking at completely tearing down my house and building on my current lot, potentially a 5 bed, 3 bath and around 3000 sq ft. I dont know what happens with the equity that I currently have in the house: does that go away or can I use that to the new build. My other thought is that all of the other homes in my neighborhood are build in the early 80's. We have about 250 homes in our neighborhood and I dont know if it would be smart to out price the neighborhood even though I would have plans to stay in this house long term. My hope is this will help encourage others in the neighborhood to do the same, but I have no idea is that would happen.
Is this a wise thing for me to do or would it be smarter to just move to a new home?
15
Posted on 6/9/20 at 10:18 am to Tkbk
quote:
Is this a wise thing for me to do or would it be smarter to just move to a new home?
You said you plan on staying there for the long term and that you're on a half-acre lot which is uncommon in your area. With a brand new house there, sounds like it may not be a terrible idea but I do not know the ins and outs regarding the equity in your home though.
As others have said, you would lose money in the long run and it’s probably not worth it. Only way you make money is if a buyer really likes the new house in the desirable area and pays you more than the total of your existing mortgage balance plus your new construction cost. Chances are that won’t happen.
This post was edited on 6/9/20 at 12:49 pm
Posted on 6/9/20 at 10:27 am to Tkbk
Do you have an HOA? I know some have restrictions on size and style of new builds.
Posted on 6/9/20 at 10:37 am to Tkbk
quote:
potentially looking at completely tearing down my house
Literally tearing down money
Posted on 6/9/20 at 10:44 am to Tkbk
Is an addition not possible?
Tearing down the house to build a new one and out class the neighborhood you're definitely going to lose some money.
Tearing down the house to build a new one and out class the neighborhood you're definitely going to lose some money.
Posted on 6/9/20 at 11:07 am to Tkbk
quote:
dont know what happens with the equity that I currently have in the house: does that go away or can I use that to the new build.
If you tear your house down nothing happens other than you still owe the bank for what you borrowed and you no longer have a house to have equity in. Don't do this.
This post was edited on 6/9/20 at 11:08 am
Posted on 6/9/20 at 12:19 pm to slinger1317
Your equity goes to zero and your bank note stays the same.
then you add another construction/house note on top of it.
horrid idea. Sell the house. Find somewhere else to buy/build
then you add another construction/house note on top of it.
horrid idea. Sell the house. Find somewhere else to buy/build
Posted on 6/9/20 at 12:20 pm to Tkbk
quote:
I dont know what happens with the equity that I currently have in the house: does that go away or can I use that to the new build
i'm trying to understand how you'd think it was possible to use the equity you have in a house that you tear down to build another house
Posted on 6/9/20 at 12:29 pm to Tkbk
I never would want to be the biggest house in the neighborhood but that’s me. I would sell and move it’s not worth it if you ask me.
Posted on 6/9/20 at 12:32 pm to Tkbk
Permit for demolition will be the intial hurdle.
Posted on 6/9/20 at 2:19 pm to Tkbk
lets keep it simple:
lets say your home has value of 150k.
100 home value
50k lot value.
it's going to cost money to tear down your 100k value. So lets say it cost 15k to tear down your home.
That's 115k down the drain. Left with a lot value of 50k.
You might as well go overspend on a lot elsewhere than tear down your home.
lets say your home has value of 150k.
100 home value
50k lot value.
it's going to cost money to tear down your 100k value. So lets say it cost 15k to tear down your home.
That's 115k down the drain. Left with a lot value of 50k.
You might as well go overspend on a lot elsewhere than tear down your home.
Posted on 6/9/20 at 9:11 pm to Tkbk
Having equity in something you no longer have. This thread is GOLD.
you ate up with the dumbass ol son.
you ate up with the dumbass ol son.
Posted on 6/10/20 at 12:12 am to Bawcephus
If you like the location and plan to stay there long term would it not be possible to do an addition.I have been in people’s house with very nice additions.I have also seen some that were pretty crappy.
If the neighborhood is in decline it might be wiser to move.
If the neighborhood is in decline it might be wiser to move.
Posted on 6/10/20 at 12:47 am to Tkbk
quote:
am open to potentially looking at completely tearing down my house and building on my current lot, potentially a 5 bed, 3 bath and around 3000 sq ft. I dont know what happens with the equity that I currently have in the house:
Fha 203k rehab loan
Posted on 6/10/20 at 2:01 am to SDVTiger
For all of the “poor” comments I hear from you and 93&99, my home is nearly 1000 more square feet than you and nowhere near a swamp.
Thank you for making me feel better about myself. ??
Thank you for making me feel better about myself. ??
Posted on 6/10/20 at 5:57 am to Tkbk
Wouldn’t an addition solve your problem?
Posted on 6/10/20 at 7:07 am to hungryone
I would just remodel or move your throwing away alot of money with a tear down...unless you have a small fortune and are extremely wealthy...
Posted on 6/10/20 at 2:18 pm to Tkbk
Look into a renovation plus addition and if that doesn't work for you sell.
Lately I've been doing the structural on a good bit of additions for a smaller architecture firming. I can put you in touch with them if you want.
Lately I've been doing the structural on a good bit of additions for a smaller architecture firming. I can put you in touch with them if you want.
Posted on 6/10/20 at 6:27 pm to Tkbk
LOL, ole boy is definitely ate up with the dumbass.
Posted on 6/10/20 at 7:12 pm to shackleford318
I’m in the dc are so you can do this. In Arlington the value of the lot alone as dirt is $750-$1mm and the value of the old home sitting on the lot is $150k. So value is in the land and this works all day up here.
In your economics, no bank is going to loan you this money as they would have a lot of money out the door and no collateral for it initially. You would have to payoff your first trust to get a construction loan and you’re upside right away. No way you can rebuild the equity to satisfy the bank and make it a worthwhile investment for yourself with the value of land that low.
In your economics, no bank is going to loan you this money as they would have a lot of money out the door and no collateral for it initially. You would have to payoff your first trust to get a construction loan and you’re upside right away. No way you can rebuild the equity to satisfy the bank and make it a worthwhile investment for yourself with the value of land that low.
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