TinyHouse43's Building Blog

From Texas-sized 2 Tiny House For Three

Empty Pockets & A Naked House

Now that the hubbub surrounding our rush to make the house roadworthy and ready to be shown to the Dallas Tumbleweed workshop attendees has died down, we had to have our atheist version of a “come to jesus” meeting with ourselves over the current state of our tiny house and our even tinier bank account balance. Needless to say, stomach acid was in high supply!

We thought we were going into our build with about $5000 cash-in-hand to knock out the exterior and the plan to take our time and build as money became available, but we kept running into issues with both our Big House and the Half-Way house that required profe$$ional help and expen$ive purchases. Our Barn Raiser came prepared with water-resistant materials on all the exposed surfaces (ZIP System wall sheathing, as well as ice & water shielding and roofing felt on the roof), but “water-resistant” does not equal “weather-proof” the way a well-built house is shielded from Mother Nature. Those products have a “shelf life” that requires they be covered by appropriate siding or roofing materials, and even though we did buy ourselves a little extra build time with the addition of house wrap and extra ice & water shielding, we still have to finish the exterior of the house almost immediately in order to prevent actual damage to the structure. It would be an awful waste of money to have our $15,900.00 investment in our Barn Raiser ruined simply because we weren’t speedy enough with the exterior finishes. No bueno.

On my way home from work Wednesday morning I called Brandy to discuss the four options I see for us as far as how to handle weather-proofing the house ASAP and the costs involved. Here they are:

  1. Finish applying the house wrap on the dormers, don’t install the new windows, and halt all building until we save up enough money to purchased the remaining 11 windows (~$4200), siding (~$2000), roofing (~$1500), door (~$100-500), chimney vent kit (~$500), and all the other incidental purchases (nails, caulk, flashing, shims, etc etc) we might need. This could take months to manage, all the while the house isn’t fully protected from the elements.
  2. Borrow enough money from Dad to buy everything we need to finish the exterior of the house, and then dedicate every spare penny of money earned to paying him back before we make any other purchases. This is not ideal because it’s not Dad’s responsibility to be our personal banker. He’s done enough for us already!!
  3. Get a loan to buy everything we need to finish the exterior. Buy nothing else until loan is paid off. Requires bank approval.
  4. Max out all the credit cards necessary to buy everything for the exterior; buy nothing else. We would need to either:
    1. pay off each card one at a time starting with the highest %APR to the lowest while buying nothing else
    2. get a loan to payoff all the credit cards at once and then have only a single loan to pay off; buy nothing else

Obviously none of those scenarios are particularly good ones to be in, but they are the reality of what we have to choose from. We talked about it over my 40min drive home and concluded that the second option isn’t an option at all for the aforementioned reasons, and the first choice leaves too much to chance as far as maintaining the structural stability of our house as it is now. That leaves us with a loan or maxing out the credit cards, the latter of which we already have access to and don’t need approval from any bank to use immediately. Our credit isn’t poor by any means, but we do still have our $220k house, two vehicles (don’t get me started on why the 2nd one isn’t gone – grr – but at least we have no payments on it until May 2015), and a couple of 0% large store purchases on our credit report. *WE* know we can handle taking on more debt and make the payments needed without issue, but that doesn’t necessarily mean a bank will agree.

We decided that the easiest thing will be to use the cards we have and then apply for a loan to pay them off so that we will have only one single payment to make each month vs. however many cards we end up using. We did that once before to mixed success (i.e. we ended up with unexpected expenses and ran up charges on a couple of the cards before we’d paid off the loan), but we are absolutely willing to put all efforts into paying off whatever debt we accumulate BEFORE we start making any additional purchases no matter which version of repayment (one-at-a-time on the cards or a lump sum payoff loan) we end up using. The only hitch with the payoff loan is that the interest rate is usually higher than our lowest %APR cards, but then again it was lower than our highest cards were, too. I guess that all comes out in the wash, so to speak. If we aren’t approved for a payoff loan, though, we’ll just default back to plan A and pay the cards off one at a time with the highest %APR cards being the first to go. It’ll be a total pain in my butt all over again, but I’ve got a good system for tracking due dates that keeps me from missing payments.

So, now we have to actually find the time to get all these orders placed and products delivered so we can make sure the Barn Raiser remains structurally intact. Along the way I need to research our options for payoff loans again, too. It’s been several years since we paid ours off, but I’m hoping that bank would still be willing to extend a similar offer. I for one am looking forward to the challenges ahead as we plunge in on the exterior of our house, and I’m determined that we will remain vigilant and dedicated to not getting ourselves in over our heads, be it with the actual install/building or in the finances needed to undertake this project. We worked really hard to pay off the vast majority of our credit & store cards over the last couple of years, so the idea of maxing them out just to buy building materials is palpitation inducing to say the least. I remind myself, though, that we’ve been there and done that and know exactly what it takes to bounce back from debt, so we’re going into this adventure with eyes wide open.

I suggest anyone making the leap into such a radically different lifestyle be honest with yourself about your finances and ability to pay back any debt you incur in the build process, because it seems like a defeated purpose to build a tiny house to avoid a mortgage only to be strapped down with thousands of dollars in credit card/loan debt. We will likely not be 100% debt free by the time we finish building our tiny house, but once the Big House is finally sold next summer we’ll have zero actual house debt and can focus on paying off anything left. We’re still feeling the pinch from the unexpected moving & make-ready expenses, but we have paid the final bills on all the Big House utilities now and should start noticing the excess funds we are no longer paying out soon. We knew our build would be a marathon and not a sprint, but apparently we signed up for a triathlon of debt-incurring speed building>debt-eliminating building stagnation>pay-as-you-go finishing touches type build. Yeesh! I’m tired just thinking about it, but whatevs…

We’ll roll with it! 😉

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