HURRY UP...AND WAIT!!

Following the last posting, I honestly felt that in a few days we would be able to announce that last step in the pre-construction fiasco was complete and demolition was eminent. Wrong again!! It was so close that we felt that “the following day”, we would have everything secure and be able to break the big news and show you pictures of a demolished house. Here it is almost three weeks later and the house is still standing. What's up with that? So in lieu of having some sort of big news to announce, you’re stuck again with my ramblings, rantings and ravings. Very frustrating for all!!

While working on all the prerequisite pre-construction stuff, we were also finalizing all that was needed for our Construction Loan. This was never the route we wanted to go. Original plans were for Gina and I to orchestrate the entire construction ourselves, acting as the general contractor. We both have organizational skills, we both have been involved in working with contractors (and artists) and we both know we can play well with others. Knowing that a General Contractor takes 10-15% of the costs as his fee, this was also an opportunity to save some money and to actually be able to afford all this.

To say this project quickly got out-of-control, is an understatement. We went into this thinking this would be just a remodel that would give us the space we wanted. We felt that if we juggled our limited resources a little, we could afford all this without too much bleeding. Wrong once again!! Our good intentions for a variety of reasons, quickly snowballed into a major construction project that required a complete teardown of the existing building and costs that challenge the national debt. I’ll try to quickly summarize the evolution of this power-shift.

The existing house is about 1100 sq. feet and was built in 1951. Unlike most homes now built in California built on a concrete slabs, it has an elevated floor with a crawl-space (not basement!!), under the house. A cute, yet small house (and single-car garage), that had old plumbing and electrical wiring. We have a great location, and though a couple blocks from the ocean and considering well never be able to afford beachfront property, we have a pretty good view of the water. The goal was to build a second floor, rewire and replumb the entire house and create at least, a two car garage. At some point during the process with the architect, it became clear that for structural and construction code reason, much of what we wanted was not achievable using our existing foundation and wall structures. Things quickly escalated and somehow, a complete teardown was the most logical option to pursue. Though “logical”, the construction of a brand new home was nowhere close to what we had to spend. Time to find that magical money tree in the backyard...I think it’s the one the unicorn is lifting his leg on?

To make a long story short, Pandora’s Box was now open.

#1 You cannot tear down your existing house without really pissing-off your existing mortgage company. If they find out, they can demand immediate payoff on the loan. Trying to get a new loan from the bank on property that’s been demolished is pretty tough and more expensive that need be.

#2 The only way to properly take care of this is by acquiring a Construction Loan. This temporary loan not only funds the new construction, it also pays off the existing mortgage. Of course, the interest rate on this is higher than a traditional mortgage and there’s bank fees involved. I’m now seeing the tip of the iceberg. This is the first of many hands that will be reaching into my wallet.

#3 To acquire a Construction Loan, a licensed contractor needs to be “set-up” to make the banks comfortable. Though with great perseverance and filling out even more documents, we could have possibly positioned ourselves as some sort of “owner/builder” thing, there are some battles that just are not worth fighting.

#4 For some silly reason, the banks will only loan you money if you a) can show them that you have the ability to pay them back and b) have enough money and assets to pay them if you default on the loan for any reason. We now somehow had to show them that we were worthy of receiving a loan from them.

The entire Construction Loan process has taken months. That would be more than understandable if we had shitty credit or a God-awful FICO score, but we don't...and to make matter worse, we got trapped in some sort of sub-prime limbo. I guess when the Pope recently declared that limbo, the place where the souls of unbaptized, innocent babies spent eternity, did not exist and was no longer part of the church's doctrine, it had to go somewhere!! Just our luck, it became a resting spot for us prior to our entry into “Construction Hell”!!

After investing considerable time in the process, weathering the holiday (which for some reason, people can’t operate in any professional capacity during), we were very close to getting everything locked-up. Did you hear this week about how IndyMac let go 24% of their work force this week? Guess who we were getting our construction loan through? You guessed it!! I called Tim (our IndyMac rep), up on Wednesday to confirm that he received the final documents he requested from us and to receive an ETA from him with regards to final approval. When his answering machine told me that he “no longer worked for the company”, I was floored. Not only did we get nailed by the current Sub-Prime over-reactions by the financial institutions, we now got hit again with staffing reductions. Unfriggenbelievable!!

Once the blood pressure settled, we hopped back into the fray to see how best to continue. At that point, we learned that our files had been handed over to Dana in Atlanta, GA. Maybe we were spoiled and got use to dealing with a rep in CA, but Atlanta? For some reason, John (Tim’s assistant here in CA), did not get canned and was trying his best to service our account. Though everyone at IndyMac was running around in some sort of post-apocalyptic state, John asserted himself and did his best to keep the process moving. We suddenly actually received some unexpected good news. John asked me if we would like to lock-in our interest rate on the loan. Not only was this good because it gave us hope of impending closure, but he also offered us a 6 1/2% rate...with no points!! All of these delays we experienced finally paid off for us. Because of the extremely crappy current state of our economy mixed-in with the impending elections, interest rates went down radically. The previously bandied rate of 8 1/4%, just dropped considerably which will save us thousands of dollars every month. Yahoo!!

That’s were we currently stand. We have been told that we should have approvals and documents to sign by the end of next week. We will keep you posted and will hopefully providing you with a very positive update shortly.



Not intending for this to run so long, I will conclude this week with two thing. The first is a glimpse of the elevation plans for the house. They may not be 100% accurate, but they are the last set of digital cad files we received. Everything else has been provided to us in the form of traditional blueprints. Take a look. We should have a great ocean view from the first floor, an even better view from the second floor deck and an incredible view from the third floor deck. If we can make this all work out financially, it should be perfect!!

...and because we can do whatever we feel like on this our blog, I'd like to close this entry with my thoughts and opinions on possible Super Bowl outcomes. Though it's likely that New England will win, in my opinion, it's far from a shoe-in. All four of the remaining teams have the talent to go all the way, but now we get to see who really wants it and who can best handle the intangibles of the sport. Here's my comments on all four teams:

NEW YORK GIANTS...I think they may be the surprise of the year. If they can survive the cold of Green Bay this week, I'd really consider putting some money on them. Screw the house, I'll take all the construction loan and "invest" it on the NY game!!

GREEN BAY PACKERS...I really do not believe they can pull this off. I think we should all make some sort of blood pact with Brett. We'll give him one last Super Bowl win only if he promises to retire immediately after.

SAN DIEGO CHARGERS...They have the potential but they just don't seem to be able to make it happen with any consistency. If Rivers is unable to play this weekend or the Super Bowl game, all bets are off!! They'd need a miracle to even have a chance to make it happen.

NEW ENGLAND PATRIOTS...They of course are the obvious favorites. Though the announcers are making their "perfect season" unbearable, they have the ability to win if they don't start believing too much of the hype themselves. They're good, but their shit still stinks. If they're not careful, their attitude may be their downfall. On a bright note, Gina will be very happy if the Pats win. If they lose, I really don't want to be around...it will get ugly!!

Enjoy the games and enjoy the weekend. Keep your fingers grossed that the next entry will be complete with photos of an empty lot!!