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Hi there! It’s time for an irregular update. Last time around was in August, when I mentioned the potential for increasing my mortgage in order to pay for a home remodel. I refinanced my mortgage a couple of weeks ago and have collected every spare penny I have, and the architect understands that we have a fixed-limit budget and will not exceed it.

Still, life is expensive when you start to do things like this. We have arrived at a mortgage payment that is $100 more than my payment was before (with the additional money I was putting into it, so if you decide to do the math, know ahead that it won’t work out perfectly). DH is going to contribute that from savings from his recent mortgage refinance, so our total payments to debt will be close to the same.

However, the total debt is still really worrisome for me. It’s a 30 year mortgage, which means that if I don’t pay it off early, it will be done when I’m 75. I don’t want to have a mortgage when I’m 75! The other part that worries me is being back to as much debt as I was in when I started posting on this board in 2005. Seven years of work. Argh. I’m in a much better overall financial situation than I was then. But still. Argh.

So that’s the hard part. The part that makes me really happy is that the roof won’t leak, the basement masonry will be repointed, the 70-year-old sink and tub will be replaced and re-enameled, the sunroom will finally be reconstructed, and I hope to get at least a master bath and a slightly larger bedroom, and the architect thinks we can rough in most of the rest of the original addition, even if we can’t finish it all. That will significantly increase the value and soundness of my house, which is something that’s been on my goals list for many, many years. (As in, ever since I bought the house ten years ago.)

With all that said, here are the new numbers. Goal: Pay off the mortgage in half the time I have and be done when I’m 60.

				5/31/2006	12/30/2011	
401(k) Loan: $29,173 Paid in full
Family loan/college fund $32,965 Paid in full
Family loan/car ($5k in 2008) $ 0 Paid in full
Total Non-Mortgage: $62,138 $ 0

Mortgage: $283,306 Rolled into new
New Mortgage $ 0 $ 352,000
Total all debt: $345,444 $ 352,000

Total paid: $108,097


This doesn’t really seem like a good way to show it, as I’m now in more debt than when I started, but I have in fact paid down $108k of debt. I hope it makes sense!

ThyPeace, really looking forward to the peeling paint on the ceiling going away, and the peeling paint on the chimney…
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This doesn’t really seem like a good way to show it, as I’m now in more debt than when I started, but I have in fact paid down $108k of debt. I hope it makes sense!

I find, for me, a better way to look at it is to look at your net worth, rather than just your debt. When I recently bought my more expensive house, my debt went up significantly, but my net worth didn't really change, because there is also more equity in this house than there was in the old house. (And actually since the market has gone up in the last few months, plus I've invested more, my net worth has grown.)

Presumably, although you have taken on an extra $70k or so in debt, your home's value with the updates/addition will improve as the project progresses and until you start actually paying for the project, you have the extra money sitting in a savings account, which offsets the debt.

That said, you may not want to post your total net worth, so another option could be that you post the current value of the home and the amount of money that is put aside for the renovations in addition to the debt. Then at the end of the project, post the new value of the home in addition to the debt. Hopefully the project will have increased the value of the home as much as the investment that you made, but even if it doesn't, as you point out, you will be buying some personal value in the updates.

Or, you could just start over with a countdown of your new goal (pay off mortgage in 15 years) and track your progress toward that goal, noting that you've paid off $67k in non-mortgage debt, too.

And, especially if savings rates go back up, with 3% +/- rate, and a minimum payment that won't decrease even if you pay the balance down faster, I would suggest saving up money to pay off the mortgage in a lump sum, rather than paying extra on it now. But I think we've had that discussion before, and you need to do what's comfortable for you.

AJ
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the architect understands that we have a fixed-limit budget and will not exceed it.
Hopefully this included contingency for hidden conditions, as these will inevitably be part of any remodel.

and the architect thinks we can rough in most of the rest of the original addition, even if we can’t finish it all.
Be careful about this. You will need to finish enough to get your final inspections and C of O, or you will be harming the value of the house, not improving it.
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I assume you mean the contractor rather than the architect. You need to have a contract that states specific work to be completed for a specific cost with no overruns allowed. But then you risk the contractor going cheap on quality to pad their profits. A better approach might be to give the contractor one amount but then pad in a 10% cost overrun for your own budget.

Having just completed a 3 year major renovation of my home, and having overrun my overrun padding through plumbing surprises, floor rot, electrical retiring, failed appliances and contractor deceit, I can tell you that it never ends up costing what you think it will cost.

One caution I would provide is to not focus on increasing the value of your home. The market will make that determination and the amount and cost of work you put in will have little benefit. Until the real estate market picks up, home values will continue to remain depressed no matter how much work you put in to change it.

Fuskie
Who notes a lot of Paid In Full notes on your update and thinks that your remaining and reorganized debt is a positive one building toward the preservation and future enjoyment of a major asset...
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Fuskie,

You wrote, Having just completed a 3 year major renovation of my home, and having overrun my overrun padding through plumbing surprises, floor rot, electrical retiring, failed appliances and contractor deceit, I can tell you that it never ends up costing what you think it will cost.

WARNING: Slightly off-topic diversion follows...

Let me add my recent (relatively minor) renovation experience.

I just bought a new-to-me (town) home in the Seattle area. I put 20% down and had set aside about $19K toward improvements and repairs. The contractor bid $10.5K+tax on the improvements - the bulk of the labor just being a paint job - and I assumed from the inspection report that there might be another $3K in repairs, giving me nearly $4K in padding for surprises.

The improvements did not involve replacing the flooring; but I didn't like the existing carpeting ... and stripping the carpets would allow the contractor to spray the walls (smoother, cleaner finish) instead of roll and brush. Two weeks before I closed on the place I decided to replace it all with bamboo - which blew right through my budget of course, since it more than doubled the cost of the project. (It only added 2+ days to the schedule, so I moved the closing up a week.)

I seriously underestimated the scope of the repairs though. The inspector downplayed the issues I pointed out, so I assumed they were not serious. He was wrong; I was right and should have listened to myself. Turned out the repairs cost me about $8K. (The work not done by my contractor anyway.) And we both missed the leaky, improperly flashed skylights.

The contractor is finally wrapping up the work on the house (he's about 5 weeks late). I added a few more work items to the project which he's charging me for time and materials. (I might have added a day or two of work; but he's been dragging out completion.) All in, I think the General Contractor, Plumber, Landscaper, Roofer, Lowes, Home Depot, Lumber Liquidators and the Great State of Washington will have collected about $39K from me on this little project. So instead of spending $19K, I'm about $20K over my original budget.

None of these monetary budget overruns were my contractor's fault. Had I left well enough alone, I could have had everything done for just over the $19K I'd set aside. But of course I didn't know about the scope of the real problems with the house until I'd already committed to installing the new floors - which already had me digging into my remaining cash reserves. At least the contractor was pretty honest and stuck with his price commitments, though he could have done a better job with his time management. (If he did, I think his clients would be happier AND he'd be making more money.)

And BTW, contract labor rates are MUCH higher here than in north Texas. And the state charges sales tax on EVERYTHING here as well. (In Texas, they don't apply sales tax to labor.)

Also, I doubt anything I did other than the floors and replacing the vanity in the powder room will add any resale value to the house. Perhaps $10-15K at most. And none of that work was in the original budget. But it seemed to be what was necessary to get a place in a good location 10 minutes from work in a condition I could live with in the short time allotted for the original house hunt.

Of course your mileage will vary... :-)

- Joel
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Only $39k?

Fuskie
Who spent more on this renovation than he did to purchase the house 18 years ago and still didn't touch the kitchen, the last bathroom (partially) or the basement...
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I seriously underestimated the scope of the repairs though.
Remodel work is always more expensive than new work. Always. And often a lot more. You must hold budget contingency for hidden conditions - very often things uncovered are damaged, not to code, different than needed to support new work, etc etc etc. It's often not even possible to know what you will have until demo is complete.

Six years ago I replaced my roof. Was to have been $12K. Discovered that an inaccessible rafter was dry rotted out, and that the adjacent studs at the front of house were as well, which involved reframing & restuccoing.. None of this was visible prior to work being done as gyp was tight to structure. All in all I spent $40K. Work well worth doing, but not cheap.
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Sigh. Thank you all for the stories of remodels and the bad things that can happen!

I did mean architect -- we are still in the design and planning stages and have not signed a construction contract yet. I have already worked the budget with a cushion, and will increase the cushion based on this information. My goal is a solid house, whether or not I get to add on. If I can't add much, that's okay. But I will not go over the budget I've set.*

Thanks for the suggestions on how to show my new debt goals. I think I will simply report on the pay-down of the mortgage, and note as an aside the amount of other debt I've also repaid. After all, I have a specific goal that I can focus on. As for paying it off in a lump sum, I understand why that's a better idea.... and I'm sure I will still pay it a little at a time. It makes me more comfortable to know that it's really paid for.

ThyPeace, will also provide an occasional update on the remodel progress.




*Note: If there are any long-lost relatives in the audience waiting to let me know of a major inheritance, please do let me know soon. I have a really lovely vision for a home remodel and for DH's and my early retirement from public service...
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Fuskie,

You wrote, Only $39k?

Well I did say it was it was relatively minor, yes?

Of course in some parts of Texas and Oklahoma I could buy an entire house for that. Land is fairly cheap there and the building industry there is full of (relative to here) low-cost labor, much of it from south of the border. Buying a plot of land and building new for $100K or so isn't that uncommon in North Texas.

In any case, my "renovation" originally only involved fixing one minor structural issue. Some idiot had cut through a floor joist in the crawlspace and failed to support it. Originally it was just supposed to be paint throughout (including refinishing a built-in bookcase in the library), a new stair-rail cap, rerouting some duct work and addressing a few other minor issues. Nothing major at all - just prepping a house for move-in that hadn't been quite "turn-key" ready.

I didn't buy this house for it to be a "project" I could renovate; but I will readily admit there were (and are) some issues with the space as well. My intention was to buy something "reasonably" priced for the area and move in as quickly as possible. I had a fixed deadline of 60 days from the start of my move before my temporary corporate housing benefit ended. That set an upper limit on how much I wanted to spend in terms of time. I needed to be in before Thanksgiving, or I'd need to rent other digs.

Also, when I set out to make this purchase, I had identified $90K in total I could use toward a house. Had I bought a much cheaper house I could have done more in renovation, time permitting. As it was, I decided after the purchase that I had the time (and money) to take on some of the less important updates to the house.

In the end, the time ran over - we moved in even though parts of the house were still unpainted - as did the money. As for money, because some of the preferred stock in my taxable account was called early I happened to have cash on-hand without having to dip into my e-fund, so I did the floors and just kept going when the drainage, crawlspace and roofing issues were identified. (Taking out a second lien just to make a place move-in ready was out of the question.)

We do have more projects to do with this house though. It's only seen a minor kitchen and master bath update since it was built in '87.

Next up: We need to put in a closet organization system. The master closet is large, but a very odd shape and standard closet organizers don't fit well. The previous owner let a lot of that space go to waste. That probably means I'm going to be buying some power tools and building something myself soon.

After that:
- Expand the master bath shower. (Small and wastes space.)
- Add an upper cabinet (over the toilet) to all 3 bathrooms. (Completely wasted space there.)
- Repaint, reface or replace the kitchen and bathroom cabinets.
(The finish on all the cabinets is ruined / peeling.)
The kitchen also has room for some additional upper cabinets (more wasted space).
The existing cabinets seem to be stock, builder-grade oak cabinets (I found identical ones at Home Depot).

That is all in my "5-year plan".

Beyond that, aj485 wants me to push a wall out into the current garage area to encompass the space occupied by the furnace and hot water heater. Doing that creates a proper mud and/or laundry room and potentially could be used to expand usable kitchen space. In the process we'd upgrade the hot water heater to a hybrid. The hybrid water heater would be a small wall-mount unit and she thinks we can move the furnace into the crawlspace. There is nearly 7' of clearance down there, mostly wasted. Worse-case, the furnace might require abatement (such as building a separately ventilated enclosure in the crawlspace).

Also aj485 bought a house as well...

So don't worry. You're not the only one on this board helping (or planning to help) the economy by spending (too much) money on renovation work. ;-)

- Joel
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Joe,

We used http://www.easyclosets.com/ to buy components for our closet. I don't know if your odd layout will work but we were able to "build it" on the web site and look at each wall with the components and see how they fit together and how it lays out. It was easy to build once everything was shippd to us and worked out well.

LLR
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And yes - an architect can estimate budgets. At least an architect who works as a full service one, and not just a design architect. A large part of what I do is budget estimating for my corporate clients.
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LLRinCO,

You wrote, We used http://www.easyclosets.com/ to buy components for our closet. I don't know if your odd layout will work but we were able to "build it" on the web site and look at each wall with the components and see how they fit together and how it lays out. It was easy to build once everything was shippd to us and worked out well.

I believe we already looked at easyclosets.com. We couldn't put anything together that really utilized the space with their online design tool. I suppose we might be able to use their products; but I'd have to go back and look at individual components manually.

BTW, the master closet is complex because it has 7 walls. Also only 2 walls face each other at a 90 degree angle and all but one are fairly short or interrupted by a door...

The following is a quick ASCII layout:

    /---|  |-+
/ |
| |
| +---+
| |
| |
+-----+


Obviously that's not to scale. The closet also has only one long wall, if you don't count the one interrupted by the door. Obviously I could just install shelving (with clothes rods). I could probably hang that in an afternoon and just get Home Depot to rip the boards to size for me. But I'm not sure that is the most efficient use of space.

- Joel
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I think you can send your dimensions to easy closets and tell them what you are wanting (type of shelves, etc) and they will design it for you. When we were planning to build a house we were going to use them for our closet and I spent a lot of time designing closets. Then we ended up buying a house and we've just used the rods and shelves already here. Maybe I'll look at redoing it someday.
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Joel -

You might consider moveable shelving/rack untis for that rear area (think along the lines of rolling shelves seen in law offices...they can either slide on a track or swing out on a hinge), especially if the width of that portion is too small to allow for clothes rods on each of the parallel walls (and still have space to walk in between. Also, putting cubby cubes along all walls up high at ceiling level will keep the floor space open and add lots of useful storage space.

Finally, you might want to consider checking out IKEA (I think there is one in Seattle). Even if you don't purchase one of their systems, you might get some good ideas for design to maximize your space.

MakingTrax
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MakingTrax,

You wrote, You might consider moveable shelving/rack untis for that rear area (think along the lines of rolling shelves seen in law offices...they can either slide on a track or swing out on a hinge), especially if the width of that portion is too small to allow for clothes rods on each of the parallel walls (and still have space to walk in between. Also, putting cubby cubes along all walls up high at ceiling level will keep the floor space open and add lots of useful storage space.

I hadn't thought about making the shelving movable. I've also been in a few law offices and don't recall seeing anything like you describe; but then (with one exception) I don't know that I would have been shown where they store files and records. I'll have to look into that.

BTW, one thing that might complicate the design is that attic access is through that closet. Let me place that on my drawing:

    /---|  |-+
/ |
| |
| ++ +---+
| ++ |
| |
+-----+


That could limit my ability to place some fixed storage since I have to be able to access the attic. However if storage were movable, that might solve the problem.

One complication though: When I replaced the carpet, I had them remove it throughout the house. The closets have bamboo floors. If I install a movable system, it may need to be something that won't score the floors ... else I'll need to place a piece of track or carpet on the floor just to accommodate it. (I do have some scrap/spare carpet in the garage; I but would have to nail down a carpet tack strip and a transition in that back corner to accommodate it.)

As for Ikea, aj485 and I have looked on their online catalog and could not find anything useful. However, we've not gone into a store. And yes, there is an Ikea in the Seattle area. It's in Renton, not far from the SeaTac airport. I've never been to it; but I know about where it's located and it's probably 20 minutes from the house.

As for clothes rods...? As I'd said before, clothes rods and shelves are pretty easy (other than deciding where they should go). Even without a track system, I could put up a clothes rod and shelf along any wall. That's fairly simple to do with cheap, off-the-shelf items from Home Depot.

Along the far back wall (bottom of drawing), you can simply put in a wide ledger board around the perimeter where you want to have the shelf. The shelf could just float on the ledger and the ledger would give you a spot to screw in dowel supports. The dowel could either be cut from wood or more likely be cut from pipe using a standard pipe cutter. (They sell sections of pipe with various finishes for this purpose at Home Depot.)

Shelves along the other walls get a bit more complicated. Ideally you really don't want the end of a shelf or clothes rod to stand free. But it's possible to build them that way. You just put in inexpensive wall brackets that have a dowel support. Ideally mount them to wall studs. Home Depot sells decorative / protective end-caps for closet dowels. Depending on how fancy you get and how long the shelf is, you're talking maybe $20 to $50 per shelf & rod.

Track systems add to the cost a bit, but make it possible to move pieces either horizontally or vertically, depending on the system. However, I also think track systems eat up a bit of the space, as (vertical) tracks tend to push things out an inch from the wall. Also while track systems are not terribly intrusive, they tend to detract from the aesthetic appeal of the space. Finally, a lot of track systems have fairly wimpy plastic rod supports. This seriously limits the amount weight you can put on them.

My problem gets a bit complicated if you want to install along that 45 degree wall you see in the diagram. (I do.) That would likely involve 4 22.5 degree miter cuts to get shelves to wrap around those 3 walls. Also, wrapping a wooden dowel around that corner would be almost impossible ... but you could use a pipe bender to turn the corners if you're using metal dowels.

In fact, the 45 degree wall is a large part of what complicates the closet. [The others are: 1) I have essentially 6 short walls, and 2) I have a convex corner I need to build around.) If we want to use 45 degree wall, I have no doubt that we either need to mount a bookcase or at least a set of shelves there. It won't work well for clothing. Mounting shelves is an interesting option because I can extend them out into the adjoining space by just using 45 degree miter cuts on the shelves. To maximize the space, I could also mount the shelves by screwing them down to short ledger boards along all 3 walls, eliminating the need for support brackets.

Anyway thoughts and discussions along those lines have led me to suspect that a custom build may be the only way to maximize the use of that space... However, I will entertain the idea of mixing kits and custom, if I can figure out a way to make it all work.

- Joel
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Joel,

Another possible store for you is the Container Store. There's one in Bellevue:

http://www.containerstore.com/locations/showStores.htm?city=...

I love the place. As in, am not allowed to go there without a specific reason and a shopping list. I can walk around for hours while my brain happily studies how they have everything stored incredibly neatly.

My current thoughts are about organizing the new shed (replaced the one that lost the battle with the tree). I seriously want most of the organizing stuff they have. A place to hang bikes, ways to store the grass seed and crab grass killer, a hose hook and another for electrical cords.... these are the things that make me happy at a level far beyond the benefit. :-)

ThyPeace, thinks more than she buys these things, which is probably good.
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ThyPeace,

You wrote, Another possible store for you is the Container Store. There's one in Bellevue:

http://www.containerstore.com/locations/showStores.htm?city=......

I love the place. ...


I certainly like The Container Store as well. I believe the first store was in Plano or Richardson, not too far from where I used to live. I've been there several times and still have a couple of items from them. I also think I know where the one is in Bellevue. It's in the Lincoln Square Town Center off of 8th St. I've already been shopping in that area a couple of times.

However, I've also looked online and I don't think it's worth visiting the store. They have lots of storage containers and hanging ... things. But their one and only storage solution offering is Elfa shelving. I bought and used a small amount of Elfa shelving in my house in the '80s and '90s. The lack of a solid, level shelf was extremely annoying - you couldn't put anything small on it or it might just fall through. Of course you could hang things through the wire - that was it's only saving grace. And since my application was in a laundry room, it worked out well enough that I never replaced it.

My new house had Elfa (actually it was an Elfa knock-off) shelving in the bedroom closets before the painter took it down. However on close inspection, we realized that all of the shelves were contaminated with some kind of dirty, tacky residue of an unknown origin. Manually cleaning the shelving was impractical - we could have just had more cut if that was the right solution. A pressure washing would have done the job; but I had to give away my $400 pressure washer before I moved because the movers said they wouldn't take equipment with gas or oil in it. So rather than try to clean up shelves I didn't really like anyway, we decided to try designing storage for the closets ourselves.

Ironically, I could probably slap up replacements for ALL of the previous owner's Elfa for a bit over $100 - less with the Elfa knock-off stuff. That would give us a place to put stuff at least. I believe the previous owner only had like 3 walls covered in the master bedroom and 2 walls in the guest with only one shelf per wall. Either they didn't need the storage or they were intimidated by the cost or complexity of the job.

BTW, I actually don't know if a previous owner or the builder put that shelving in. I'm the 3rd owner of record, so it's possible the previous owners never changed it. But I've never seen a builder use Elfa-type shelving in a home before. So I have to wonder if this was original and if not, what was in here originally? Anything? After all, if you're replacing a storage system, the normal impulse is to put in MORE.

FWIW, we have a white Martha Stewart Living closet starter kit that's supposed to be delivered Friday for the guest bedroom. That should at least cover one wall in that closet. (I actually think if we buy a few additional parts, we might be able to fill out the entire closet with it.) Once we have that in, it should relieve some of the pressure we have to be able to hang and/or store things. Right now all we have to work with is one hanger hooked over the master bedroom door, two clothes baskets, a dressing table and drawers, a gentleman's chest and a couple of suitcases. We still have wardrobe boxes down in the garage we've yet to unpack...

- Joel
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If we want to use 45 degree wall, I have no doubt that we either need to mount a bookcase or at least a set of shelves there. It won't work well for clothing.

Cubbies for purses, shoes, scarves, gloves, other accessories?
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makasha,

You wrote, Cubbies for purses, shoes, scarves, gloves, other accessories?

Precisely.

- Joel
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