Sunday, November 3, 2013

ADU Loan Option & Electrical Costs

The current situation is that we do not have enough equity in the home to pull funds. The closing costs ate the additional equity.

So I looked into a home equity line of credit. I am allowed as much as 15k. The way I look at it, at 4.5% interest, and a $350 fee to receive this loan... I could avoid cleaning my entire 10 k of personal savings out, or at least pay for the build in it's entirety if it ends up being over 20k.

In the end, it is about $2500 in interest if we pay back in 2 years. To have a rental in the end? Likely worth it.  That DOES mean I will need to have a monthly renter consistently to pull this off, using every dime in rent to pay down the loan. Which does not seem unreachable. If it takes longer, that just means paying more in interest.

My biggest hurdle has been electrical. The bids have been over $5000 (many as much as $6800). We are now exploring a friend or a friend handling the electrical for about $4k, or handling demo of current wiring and another highly recommended local contractor adding the new 200 amp service in the home, sub box, digging, wiring, etc. Leaving me with a $5000-5500 bill.

Seeing I have a strict budget as it is, I might have to go with the friend of a friend from Tualitin (he is still bonded.. important!) for $4500 or less, doing the same work. He requires that I buy the supplies needed and pay him the labor. To save $1000 that could be used for framing an interior, or adding a front shed style porch... it is likely worth picking up the goods and having him do the work, over hiring a local contractor. He is pulling permits on his own/like the local contractor would have, and I appreciate that a lot.

I am waiting to say Yay to the loan until I have confirmed the costs that a main contractor quoted, meeting with a city rep at my home to get the low down on requirements with my architect present, and pulling the permits with that architect once he puts together the site map and engineering.

That's the latest!

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