herlihyboy wrote:
- quote -


what is $40,000 getting you? some new walls, new electrical, new
foundation? Implying if you upped this to $50k could you get another
400 square feet?

If you added a room instead of redistributing, do you gain what you are
after at a lower cost? Keep the brainstorming going. For that part of
Indiana, I would expect $40k to go much further. I have visited there
3-4 times before (visited Jasper, IN and Owensboro, KY). I know the
ruralness you describe and understand the limitation of comparison
appraisals.

jIM wrote:
- quote -


That's the difficult thing. We live in SW Indiana in the country on
about 4.25 acres. It's hard for appraisers and realtors to find
adequate comps. Maybe we're not finding the right appraiser/realtor.

The addition would probably only "add" about 100 sq ft. It would
redistribute some existing space and add a bedroom, bathroom, and
laundry room.

I think we're leaning toward the "don't do it" side right now and would
opt to buy somewhere else. It's an old farmhouse and the layout sounds
like it would be a bit odd after it was done (regarding doors,
hallways, etc.) because it's complicated adding onto houses like this.
Also, we'd have to live through or around the construction.

what do houses in your neighborhood sell for? what would your house
sell for? If you spent 40k to build an addition, how many square foot
would you gain, and how does this compare to any house on your street?

In article <1114201573.555871.155070[at]f14g2000cwb.googlegroups.com> ,
"herlihyboy" <ryan.parmenter[at]gmail.com> wrote:

- quote -

One question to ask is by how value will your home increase
by adding on the addition. If it costs $50K, and you only
increase the value by $25K, I wouldn't do it. I'd consider
moving to a bigger place. Most homes in established
neighborhoods have prices that are pretty well set by the
houses in that area. You normally do not get a return on
investment on additions or gut-rehabs.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

My wife and I have started writing down our short/medium/long term
personal and family goals. One goal is to either add onto our house in
the future or move to a home that is more adequate in size for our
family (2 adults, 3 small boys).

We had a contractor out today simply so we could gauge what we were
facing if we decide to add on (i.e., 30K versus 80K). We're still
probably a couple of years from doing anything either way. My question
has to do with how to pay for an addition.

We have decided that we are done with debt other than mortgage debt and
are almost down to only a mortgage (go Ramsey). However, if this
addition costs 40K, we don't have 40K in cash ready to spend. Our home
is probably worth about 120K and our mortgage balance is 80K.

Let's say in 2 years our home appreciates to 130K and we pay our
mortgage down to 78K. Now, we have about 50K in equity. If we
refinanced and used part of the equity (plus any cash we had saved up)
to pay for the addition, is this wise? We would make sure the refi was
no longer than 15 years and that we maintained at least 80% LTV to
avoid PMI on the mortgage.

If we don't add on, we'll likely move in a couple of years and will
probably buy a house for around 140 - 150K with a 15 year fixed and at
least 20% down. Are the two financing scenarios (refinancing for the
addition versus moving) more or less the same?

Thanks guys/gals,

Ryan