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Oh, the Money!
January 5, 2009
Most of the posts about the cottage have been about how much money I’ve saved by using recycled materials. It’s true. I have saved a TON of money. But I’ve also spent a ton of money. In fact, I’ve spent all my money.
The original budget for the project was $71,000, which was the amount of my home equity line. In the beginning, Builder Scott told me he could turn the garage into something rentable for that. He even made me some budgets, which I found not so long ago and showed him. How naïve we were!
In June of 2008, I realized that we were going to run out of money. So I applied for an increase to my equity line. Since my house has increased in value more than 300% since I purchased it, I was fairly certain this would be a no-brainer. I asked for $50,000 more. Unbeknownst to me (and just about everyone, at least right then), the mortgage crisis was unfolding in all its glory. Bank of America took 12 weeks to decide that they would increase me, but for $25K instead of the $50K I asked for.
As of January 2009, I have about $3000 left. I’m currently paying more on the equity line than I pay on my mortgage. So, basically, I’m paying for two houses every month. Except one of them isn’t finished. One of them has no roof, no wiring, no plumbing, no walls, no floors and no tenant. It has some really nice framing. And an unfinished wine cellar/storage area. It has uninstalled cabinets which currently live in my dining room. It has a really nice refrigerator, currently on my front porch. It has the Cadillac of wood stoves, the Tulikivi, which is in pieces all over my house.
I pay 4-5 guys every week to work on it. Yes, we have a lot of free/cheap materials, but there is lots of pricey wood from Nature Neutral. I feel like I’m the one that’s keeping Allied Concrete in business. I pay to rent scaffolding. I buy a lot nails. I still have to pay for the roof. The electrical. The plumbing. Flooring. More kitchen appliances. And what seems like a million other things.
How to do it?
Since I can’t afford to pay back any more than I’ve already borrowed, my only hope is that I can somehow EARN enough money to finish the cottage. I have no idea if this will work, but I’m going to give it a go.
1PJ | February 1, 2009
While I don’t know the rate you are paying on your line of credit perhaps it’s time to consider refinancing you mortgage and folding in your line of credit balance and taking out some equity all at the really nice percentage rates which currently prevail. Perhaps you can repackage your debt at a more attractive monthly rate and get some more much needed cash to complete the construction on your Interminable Cottage.
Be Brave Debra! Soon you will have to choose a tenant.