Design Tools

We met with the HUD consultant and I played around with a few pieces of software that I thought might help make the design and layout more fun.

I am slowly learning that people like to take time off for long weekends so it was a pretty relaxing week, finally.

On Saturday, we met with the HUD Consultant. This was a whole thing that we had no clue about. Basically the consultant is responsible for making sure that the contractor’s work is done properly before he gets paid. At the beginning, the HUD consultant puts together his own estimate of what needs to be done and how much it will cost. This portion cost us $1500. Then, three to five times during the renovation, the contractor will request to be paid. The HUD consultant will come out, check the work and if satisfied, the bank will send us a check. If we’re happy with the work, we sign the check over to the contractor. Each time the HUD consultant comes out, we pay him another $250. All these random costs are really starting to add up.

I’ve also started trying to find online tools to help with the floor plan.

The first thing we tried was RoomSketcher. This seemed like the ideal tool for making a floor plan, but I could not for the life of me get it to do what I wanted.

Then, while watching Fixer Upper, I noticed that Joanna uses a program called SketchUp. I discovered that there is a free trial available online. I got started with that and although it was fairly easy to learn, it has a lot of capabilities, and I was not going to quickly learn enough of them for it to really be useful. But while playing around with it, I also learned that there was a way to draw a floor plan on AutoCAD and pull that into SketchUp for further editing.

So I downloaded a free trial of AutoCAD. I actually really enjoyed playing around with this and would like to continue learning how to use it, but again, there’s no way I can learn enough for it to really be useful right now.

So going back to graph paper for now but would love to hear if anyone else has good experiences with any floor plan or design tools.

 

Paint Colors

I submitted the Certificate of Appropriateness application, out new contractors got approved by the new mortgage broker, and we chose paint colors.

I submitted the 32 page Certificate of Appropriateness application. Thankfully everything we want to have done is considered minor work, meaning the staff at RHDC will review our application and get back to us in about two weeks. Major work requires a public hearing and a two month turnaround.

Jesse, the new contractor was approved at the new mortgage broker so we’re starting fresh.

We scheduled a structural engineer to come out to the house in a couple weeks and a HUD consultant to come out this Saturday.

Fun stuff: We stopped at Home Depot and grabbed a bunch of paint swatches that we kinda liked so when I got home I played around on BEHR.com and came up with a color palette I like.

Paint Colors

What do you think?

New Contractor

We have new viable contractor and mortgage broker options, we ordered a survey, and I started work on our Certificate of Appropriateness application.

One of the contractors we talked to on Friday got us a quote by Monday and it was well within budget. He had cut a couple of wish list items out because he wanted his price to be low so we asked for the items to be added back in and the numbers still worked out. Despite this, we were unsure about working with this particular contractor. He is very quiet and seems very easy going, which is not normally a bad thing, but since this is our first time doing this, we would feel more comfortable with someone more willing to take the wheel. Our realtor knew that he had done some work for a guy about a block away, so we met with him, saw the work that had been done, and left feeling a little more confident that we could work with this contractor.

We also got a quote from another bank that was in line with the original bank. So that’s another option.

Although the contractors all budgeted for a survey in their estimates, we decided to go ahead and order one ourselves to get that done with.

By Thursday we still hadn’t gotten an estimate from the second contractor. We realize we gave him a very tight timeline, but unfortunately that’s all we had to work with. We went ahead and signed a contractor agreement with Jesse, the contractor that got his estimate to us on Monday and has already filled out all of the forms needed to get him validated with the bank.

Our contact at the bank tried to convince us that the house isn’t actually a historic home and therefore doesn’t have to meet any historic preservation requirements because it doesn’t have a name. This is after he said we needed a Certificate of Appropriateness before closing. I managed to convince him otherwise though I have no idea why he cares. But I won the battle so I had start to work on our application for a Certificate of Appropriateness. I again spent a couple hot, humid, mosquito filled hours at the downtown luxury slum, this time taking pictures of everything on the exterior of the house that we will want to change or repair.

Road Blocks

This week, we almost lost the downtown luxury slum.

This week was full of speed bumps and potential road blocks.

Tuesday: We learned that the mortgage requires the renovation to start within 30 days of closing, which is a problem because Corey, our contractor, isn’t available to start until the end of August.

We also learned that the bank needs to approve of the contractor we’ve chosen and they need plans drawn with measurements in order to order the appraisal. If I didn’t mention it a few weeks ago, the bank had informed us that the appraisal needed to be ordered 40 days before closing, of course this was after we offered to close within 45 days, as advised by the bank. Anyway, obviously the appraisal still hadn’t been ordered despite the fact that our due diligence period was supposed to be over on Wednesday at 5pm.

So we had Corey fill out a bunch of forms for the bank and got them submitted.

Wednesday: Of course by 4:45pm, we still hadn’t gotten a response from the seller about our requested price drop. We knew that with the current price of the property and the cost of renovations, the whole project just wasn’t going to be feasible. So we sent the seller notice that we were terminating the contract. Goodbye downtown luxury slum.

Shortly after 5pm, we got notice that the seller had signed an amended contract with our requested price reduction and an extension in the due diligence period in exchange for an extra $1000 of due diligence fees. We also pushed back the closing date to August 25th. This was a result of a stroke of genius from our realtor, Louise. The seller had bought the house in August of 2016 and it occurred to Louise that if he kept it for just a month longer, he would pay 10% less in capital gains tax as a result of owning the house for a full year.

I spend the next hot, hot, humid hour at the downtown luxury slum getting eaten by mosquitoes and taking measurements so I could draw plans for the bank.

Thursday: The bank informed us that our contractor could not be validated. Awesome. Glad we just gave the seller another $1000.

The bank also informed us that since the property is historic, we would need Raleigh Historic Development Commission approval before finalizing the loan. At this point I’m really starting to wonder why they don’t have a checklist of documents needed, rather than coming up with a list as they go, and letting us know the requirements the day after they are needed.

But we’ve come this far so I’m going to work on drawing a floor plan on fancy graph paper. Just in case. We also reached out to a couple more contractors and a couple other banks. At this point I’m super irritated with the bank and love our contractor so if he can get approved with another bank, that would be better than having to start over with another contractor and continue to get blindsided by the bank.

Friday: We had two more contractors come over to the house and asked them to put an estimate together.

And I finally heard back from the North Carolina State Historic Preservation Office about the tax credits. Basically if we want any tax credits, we need to only make changes to “promote the long-term preservation of the property’s significance through the preservation of historic materials and features on the exterior and interior.” Meaning no open kitchen, no knocking down walls, keeping the plywood floors, and turning the enclosed porch back into a porch, thus decreasing our square footage. Thanks, but no thanks. While we absolutely love the exterior of the house, the crumbling 19th century interior just doesn’t make sense in the 21st century.

 

 

Previous Residents

We got our renovation cost estimate this week. It was over budget. And we did some research on the history of the house and its previous residents.

We got our renovation estimate from Corey this week. It was $100,000 more than we had budgeted. Awesome.

After reviewing the estimate, our realtor was able to get it down to only $37,000 over budget primarily by removing luxury items that we didn’t want in the first place. At that point, I was able to look at the estimate without my head exploding and was able to work with Corey to get it down another $12,000.

If you’re doing the math, you’ll see that this still puts us over budget. So we went back to the seller with this information and requested a lower sales price. Our argument was basically that after renovations, the property wouldn’t appraise high enough to justify the cost. By the end of the week we still hadn’t gotten a response back from the seller.

The fun thing this week: My friend, Emily, did a title search on the property. The earliest recorded deed transfer was in 1899. If I’m counting correctly, there have been eight other owners since then. Emily also found a document that lists all of the houses within the East Raleigh – South Park Historic District, along with their character defining features, date, and status as a contributing structure. This lists the house as pre-1900 as a “5-bay hipped-roof duplex with hipped metal roof and weatherboard siding; original 4-over-4 doublehung-sash windows; attached porch with flat roof, twin wood-post supports, jigsaw-cut brackets, wood railing”.

We found the 1896 Directory of the City of Raleigh which listed the widow, Mrs Charlotte King along with three sons, two daughters, and a Lee Coy as residents at that time. The men all worked at Caraleigh Mills, which is now a unique downtown Raleigh upscale loft style condo community, but was built as a cotton mill in 1892.

Here’s some more history for you: Joel Lane sold 1000 acres of land to the State of North Carolina in 1792. William Christmas carefully drew a plan for how the city of Raleigh would be laid out. The downtown luxury slum sits in square #1 of this original City of Raleigh plan. Check out that map!

East Raleigh – South Park Historic District

I designed a kitchen with the IKEA Home Planner and researched our historic designation.

I spent the better part of my day on Saturday fighting with my computer, experimenting with multiple browsers trying to get the IKEA Home Planner design tool to work for me without repeatedly crashing my computer. So I probably should have made note of which browser ended up working best in the end so I can access my design again, but obviously I don’t remember. First world problem for another day.

Corey, our contractor, is working on putting together a detailed estimate for us so he had an electrician over to the house this week to provide his estimate. The plumbing subcontractor was able to provide an estimate just based on knowing the proposed floor plan.

I still haven’t heard back from the tax credit people so I tried to do more research on my own. I discovered that we’re part of both a local historic district (Prince Hall Historic District), and a national historic district (East Raleigh – South Park Historic District.)

The national historic designation is what would make it possible for us to receive tax credits if our renovation plans meet their requirements.

If we make any changes to the exterior of the house (which we will), we need to apply for a Certificate of Appropriateness from the Raleigh Historic Development Commission, the governing body for local historic districts.

Under Contract

We paid our due diligence and earnest money, met with a couple architects, decided on a contractor, and started looking into historic restoration tax credits.

This was a busy week on multiple fronts. On Sunday, we finally got a signed contract from the seller so on Monday, we got to fork over a bunch of cash for due diligence and earnest money.

We also met with a couple of architects (one of whom works with a design-build firm) to get their thoughts on the project. They basically said it would be doable but tight with our budget, and they’d be happy to provide their services, but for now we should focus on choosing a contractor.

We decided to offer Corey the contractor job. He asked us for a basic drawing of what we envisioned, a couple pictures to give him and idea of what sort of style we wanted, and a wish list. Our second attempt at drawing a floor plan resulted in ending up with just two bedrooms since realistically, there just isn’t space for three without compromising the overall vision.

I found and joined the neighborhood Facebook group. It isn’t very active, but I assume I’ll work on changing that after we close.

And today, I emailed some people at the state about historic restoration tax credits. There are tax credits available for historic preservation from both the federal government and the state so I wanted to see what we might qualify for, and what we needed to do to qualify.

 

Love At First Sight

Although we had hoped to purchase a house downtown eventually, we weren’t really looking yet. But a friend asked us to go look at a house with him and we fell in love. After consulting with a couple contractors about the cost of renovation, we put in an offer and after a few counter offers, we had a contract.

A good friend had been looking for a fixer-upper for a while, found one that he was interested in, contacted his realtor, and asked us if we’d like to go see it with him.

Of course!

It was love at first sight.

Two days later we returned to the house with a couple contractors to get a quick estimate as to what it would cost to make the house livable again. Their numbers were a little higher than we had hoped, but workable.

So the next day we put in an offer. We offered much less than the seller was asking for and did not really think our offer would be considered. We were told there were two other offers and surely they were professional house flippers making an-all cash offer.

Much to our surprise, the seller came back to us with a counter offer. We countered again, and then he countered again. And we accepted.

We have until June 14th to do all of our research (due diligence).

And we close on July 7th.