The Preacher in Ecclesiastes pointed out how there is a time and a season for everything. In this part of town it is the time of early development. Since our house is so close to the center of the district, we are drawn into "what's happening now". The feeling or life style here is more about the future and what is to be than it is in the right here, right now. Folks naturally kick at inevitable change because we fear.
Holding this property is more about developing it to make it more valuable in order to sell it to the people who will occupy the house during the coming "hey day". Because, for this house to really enjoy a "hey day", it must receive improvements. Once the improvements are made, this house will no longer suit us. It will be more suited to younger people. A Mother and a Father with their children. There will be schools here again. There will be better security. Higher property values will bring more stable people with more to lose. Property taxes will go up and the people who pay them will have their say in what goes on here. The American dream will go on. They will spend more time walking and biking than riding in cars.
But as I see it, the only way of making these improvements is with the view of making them and then selling the house. The part that takes faith is that the momentum of development will continue. This momentum is directly and immediately measured by the price per square foot. Momentum of development is people working to make profits with faith in the future.
The only way we can afford to make the improvements is with the goal of achieving a higher price per square foot in order to sell at a profit. It is a gamble, a risk. There is a scale: cost of improvements to higher square foot price points. Knowing how much certain improvements cost and how many dollars per square foot those improvements will add is the holy grail.
Here's the thing: I believe that only wisdom can tell what those numbers are. Wisdom only comes by faith. Profit requires faith and profit requires risk. To hit the target in the exact spot at the exact time will require the utmost in study and planning, but also intuition which comes from God's Wisdom. Wisdom tells me to make this house what it should be then rather than what it could be now.
Monday, August 23, 2010
Monday, August 9, 2010
More Thinking
I have felt stymied. I sat down and thought things over, starting at the beginning. I concluded that I am on track and that I have to keep the faith no matter what the circumstances or situations. In so doing I was able to clarify my feelings and decide on a course of action. I am talking about our Argenta Craftsman Home, and my mission to move it's value up by making certain improvements. I am more clear that doing anything is like growing a garden. It is a miracle that in the spring a seed can be planted that after it's growing time yields some tasty ears of corn, or some other such crop. Nobody really knows how. Nobody knows how a baby grows in the womb. That's life - nothing stands still. It takes Faith.
Through the course of the last four years I have made a survey of everything I believe needs doing on this Our Argenta Craftsman Home. Through the same time I have educated myself on the real estate market and I have reconciled the list of improvements with the market. I have come up with the basic renovation program which would satisfy me. It's what I feel should be done.
If it was spring and I was to till up a plot the size of two city lots to plant a garden, I would have no more confidence in saying that come harvest time that plot will yield all this different produce. You just have to sow and put in the time everyday doing what needs to be done. Stuff just grows and you win some and lose some. Maybe fixing that wall in the picture above is like growing a mess of cantaloupes. The seasons will pass and the earth will yield. Though I may have doubts I can't reap if I don't press on anyway.
But you can't grow a thing until you make a start and break ground. Everything done is measured in financial terms. Here is what I figure and come to every way I approach it: The regular Craftsman houses in our neighborhood go for around $95 - $105 per square foot. The new condos across the street are listed at $250. I am convinced that with the certain improvements that this house will rise to the $250 value level, if not more. The improvements will add some more square feet.
Currently a conservative estimate of our square feet is 1650. At $95 that puts the value of our house at $156,750. Sounds about right. With the improvements I envision the square feet becomes 2000 and at $250 that puts our value at $500,000. Stop right there because you are thinking, "Impossible." If you were to lay out all the seeds to go into the productive garden aforementioned and calculated the predicted yield you would say then, "Impossible." So I think I can make this house everything it should be for $100,000. (No doubt.) So here it is: take that $500,000 and subtract the $100,000 improvement investment, subtract our current principle mortgage balance and that leaves quite a lot of money. So in that sense it works out. I still just feel in my gut that it is the thing to do.
I can do nothing without a true set of plans. The next step is to begin having real plans drafted and that requires money. I have contacted a man who claims to have the kind of qualifications for this and I am going to find out how much it will cost to develop detailed plans. Another thing I have done is to set up a calender. I want to be finished with the work by our anniversary in November of 2012. This would allow for a grand Thanksgiving in our newly remodeled home. I want a plan so complete as to have the work done start to finish in six months. That means a starting date of May 1, 2012.
I want to pay for everything as I go. The plans will take months of work to develop, this I know, so I should be able to pay the man some money every month between now and the start of construction. I will superintend the project and pay all the bills as they come in. Right now I have only a vague idea as to how I can earn the money required for the construction. But I do know with the skills I have acquired in a lifetime of construction work, that I can do some of the work myself, and that will be my extra benefit. I can float all the wallboard and do all the painting. That will be a substantial savings. I will be able to do some of the demolition work myself as well. I can rent a dumpster and do the tearing out and clean up work. I will be a general laborer throughout the job. This will help keep it moving and keep me aware of the possible snags, while saving some real dollars.
Instead of trying to cut any corners I want to use my extra benefit to go above and beyond. We cannot replace the windows, so I think I have a plan to refit them and make them more air tight, however, that will cost "X" amount per window, but still less than replacements, and the energy savings and noise reduction will add real value. I am thinking that I can do this myself with scaffolding. My extra benefit should go to making this house in this historic district the house all others are measured by. This would make me feel that all the years I spent gaining my stock and trade were the best investment I could have made.
If it was spring and I was to till up a plot the size of two city lots to plant a garden, I would have no more confidence in saying that come harvest time that plot will yield all this different produce. You just have to sow and put in the time everyday doing what needs to be done. Stuff just grows and you win some and lose some. Maybe fixing that wall in the picture above is like growing a mess of cantaloupes. The seasons will pass and the earth will yield. Though I may have doubts I can't reap if I don't press on anyway.
Currently a conservative estimate of our square feet is 1650. At $95 that puts the value of our house at $156,750. Sounds about right. With the improvements I envision the square feet becomes 2000 and at $250 that puts our value at $500,000. Stop right there because you are thinking, "Impossible." If you were to lay out all the seeds to go into the productive garden aforementioned and calculated the predicted yield you would say then, "Impossible." So I think I can make this house everything it should be for $100,000. (No doubt.) So here it is: take that $500,000 and subtract the $100,000 improvement investment, subtract our current principle mortgage balance and that leaves quite a lot of money. So in that sense it works out. I still just feel in my gut that it is the thing to do.
I can do nothing without a true set of plans. The next step is to begin having real plans drafted and that requires money. I have contacted a man who claims to have the kind of qualifications for this and I am going to find out how much it will cost to develop detailed plans. Another thing I have done is to set up a calender. I want to be finished with the work by our anniversary in November of 2012. This would allow for a grand Thanksgiving in our newly remodeled home. I want a plan so complete as to have the work done start to finish in six months. That means a starting date of May 1, 2012.
I want to pay for everything as I go. The plans will take months of work to develop, this I know, so I should be able to pay the man some money every month between now and the start of construction. I will superintend the project and pay all the bills as they come in. Right now I have only a vague idea as to how I can earn the money required for the construction. But I do know with the skills I have acquired in a lifetime of construction work, that I can do some of the work myself, and that will be my extra benefit. I can float all the wallboard and do all the painting. That will be a substantial savings. I will be able to do some of the demolition work myself as well. I can rent a dumpster and do the tearing out and clean up work. I will be a general laborer throughout the job. This will help keep it moving and keep me aware of the possible snags, while saving some real dollars.
Instead of trying to cut any corners I want to use my extra benefit to go above and beyond. We cannot replace the windows, so I think I have a plan to refit them and make them more air tight, however, that will cost "X" amount per window, but still less than replacements, and the energy savings and noise reduction will add real value. I am thinking that I can do this myself with scaffolding. My extra benefit should go to making this house in this historic district the house all others are measured by. This would make me feel that all the years I spent gaining my stock and trade were the best investment I could have made.
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