Monday, July 6, 2009

A possible interesting venture...

I mentioned in a previous post that we really need to look at expanding our own homestead...whether that means occupying the whole duplex (not ideal - I *LOVE* my upstairs tenants) or moving on to another house for ourselves. Two people in the 1-bedroom flat is fine...two people and a ton of construction tools/supplies in a 1-bed is tight...two people, construction gear, and an infant is manageable. Two adults, construction gear, and a mobile baby is going to be impossible.

The trouble, though, is that all of our financial resources are tied up in the rentals. We can ALWAYS borrow money from SOMEBODY to buy another income property...heck, they pay their own bills! But banks get squicky when we talk about buying a house that doesn't produce on top of what I guess they consider 4 risky investments. What happens when we have problems! ACK! They don't seem to consider the fact that we live WELL below our means and in an average month set aside $1500 for emergencies/savings...and when pressed can manage $2500 a month. Above and beyond our expenses. They don't care. They like that cushion exactly like that. They don't want us spending it on a house just for us.

So...what to do? Rob has come up with a pretty sweet plan, and I hope he actually goes through with it. First, consider that he works for a HOME BUILDER. Someone who, you know, builds houses and sells them to other people. Someone who is rich beyond our wildest dreams ( the really wild dreams I can imagine it). Someone who understands the complexity of home mortgages and lending.

Can you see where I am going with this?

Rob proposes that he do a deal with his boss for him to build us a house (a BRAND NEW, NO RENOVATIONS, THREE BEDROOM MODERN HOUSE! WITH TWO BATHROOMS EVEN - MAYBE *THREE*!!!) and hold the mortgage himself. Obviously there are drawbacks to this plan, but Rob loves this job and the company he works for, he doesn't mind the implication that he will be tied to the company. And we can always refinance later. But the mortgage would not have to be approved by squicky banks, we could set our own terms, and, even better, it would not draw down our lending power unless his boss felt he had to report it to the credit agencies! It would just be a big chunk of equity.

In return, his boss will have a slightly tighter hold on his star engineer, and would be making money on the loan. If we default, it's no skin off his back to cut us loose.

I hope this becomes more of a reality than a late-night discussion.

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