Financing a Garage... Options/Opinions?

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1/8/2018 4:40 PM

Bought a house last year, mortgage payments aren't quite so bad. It was a bit more than I originally planned to spend, only because I need a shop, and any properties on the market with a nice enough shop didn't have a house that was nice enough. So I bought this place with a decent house, and a nice sized garage that has a loft on it...
Turns out the garage has too many structural issues, due to a poor build by the previous owner (too cheap of a guy to do it right). It has to come down before the water damaged wall crumbles or all the siding blows away... The garage is maybe 10 years old. Also after reading the town by-law it doesn't meet code.
It's an old garage with a new garage added to it, sharing a "new" roof, the old garage pad was never brought up to the level of the new pad and is at grade, so concrete has to be added to make up for the 6" difference.

I spent a summer years ago framing houses, barns, garages etc, so I'm not afraid of doing the work, but I am just a one man crew... I'm sure I could convince a few buddies to come help lift walls if I pre-build them.
I priced out a garage "kit" from the local home center, everything for a finished garage was around $13,000. That's framing, siding, roof, drywall, doors, windows etc etc... I figure I can drop it to $10,000 by shopping around for used things like windows, doors, and I'll be re-using as much wood from the old garage as I can.

I called a contractor, and even with me doing all the interior finish work (electrical, insulation, walls etc) he quoted me $20,000 likely assuming I know nothing about the trade... Considering it's a 3 or 4 day job for a small crew of guys, the extra 10Gs is a bit hard to swallow.

My truck will be paid off within a year, freeing up $520/month, I plan to bring my line of credit down to zero as soon as I can after the truck is paid off... I want to do this the summer of 2019 as I'm in the military and I want to enjoy the new shop for a few years before I get posted.

How would you go about financing this? A buddy at work suggested I add it to my mortgage, which is fine with me, as it in turn increases the value of the house for when I go to sell. The garage is also the first part of bringing the rest of the property up to snuff (finally paving the monster driveway I have).

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1/8/2018 5:03 PM

Adding to your mortgage is fine, but if it were me I'd make sure of the following:

1) I would still have at least 15% equity in the property AFTER the new mtg. 20% if possible. This is your "Bail out at all costs" margin of safety.
2) Try to wrap it all into one loan and not a 2nd mortgage or HELOC with a separate payment.
3) Definitely look for a better interest rate than what you have now, so the refi will pay for itself eventually.


How long will you own this home? Will you keep it even if you get posted somewhere else, or sell and move? Can you get the new construction inspected and will it pass code? All things to consider.

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Braaapin' aint easy.

1/8/2018 5:07 PM
Edited Date/Time: 1/8/2018 5:08 PM

I am in a similar situation in that I am building a garage myself this spring-I also spent a few years building homes while in college and so it will be easy.
To make lifting the walls easy do smaller sections and sheet them after you lift them up. For me the biggest issue will be setting the gable ends and trusses..this is when I will get some buddies over to help and probably rent a crane for a few hours.


Depending on how much equity you have in your house you could pull some cash from the house- this is easy and you can amortize it over a few years or many years.

Anyways, our plan is to pay as we go....might take me all summer but that’s ok.

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1/8/2018 5:30 PM

The correct thing to do is the last thing you want to hear, pay off your truck and start saving until you can't stand it anymore . You're gonna hear a lot of people with all different ways to go about borrowing money. The older i get the more i can't stand having bills.

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1/8/2018 5:37 PM

I didn't spend much on the house, I'd say I already have 15% equity back in to it.

I'll be here for hopefully another 10 years, but plan on 7. When I get posted, I will be selling, which is why I'm trying to get the outside looking better, I want to pave the driveway but I won't do that until the garage is finished... The yard was a lilac bush jungle (literally had no yard) but I spent all last year clearing it up and it's actually nice now, aside from this massive gravel driveway that has an extra parking spot in the front yard... They had a car, an F250, a 5th wheel trailer, a boat and a school bus that all fit on the driveway... We just have the truck and the car, the Trans-Am resides in the garage. The race trailer and the boat can sit off to the side of the driveway along the property line, doesn't need to be paved for them.


The Garage will pass code when finished, I've read our local requirements and I can meet everything needed... The garage as it is now doesn't meet code because the loft makes it too tall.

The garage is full of tools, power equipment, bikes, car etc etc, so doing a slow build isn't really possible. All of the riding stuff will be in the race trailer, the T/A will go in my tarp garage during the build, and any tools that aren't required to build the garage will go in the basement until finished.

I figure if I buy things like windows, garage door etc when I find deals over the next year or so, then I can just price out what it will cost to get the old floor brought up to level and for the materials to get the main structure up and enclosed... If that is under what my line of credit is, I can just finish up the inside as I go. Also, we have a military credit plan that local businesses take part in, I can get a loan of up to $5g interest free, and our local home store offers that program...

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1/8/2018 5:39 PM

MR. X wrote:

The correct thing to do is the last thing you want to hear, pay off your truck and start saving until you can't stand it anymore . You're gonna hear a lot of people with all different ways to go about borrowing money. The older i get the more i can't stand having bills.

I also really do not like to borrow money. I can easily put a grand a month away in to a garage fund once the truck is paid off, but that puts me in to the summer of 2020 to start the build.

Once this is out of the way, I'm going to put some serious money in to the mortgage to try and get rid of it.

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1/8/2018 6:51 PM

Was the old garage permitted? It doesn't meet the current code but depending on when it was built it could be grandfathered in.

If it truly needs to be torn down then the above doesn't really matter.

How big of a garage/shop are we talking about? The guy that quoted you 20k could be in the ball park or way out of it.

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"Sorry Goose, but it's time to buzz the tower."

1/9/2018 1:56 PM

Second mortgage large enough to pay all your debts off and build the garage!

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1/9/2018 3:57 PM

7 years out at least, you're golden. I have real estate friends who are telling me my plan to buy a house in 2020 is a good one. Things are going to be expensive until then, but there may be another "adjustment" coming and stuff will get cheap again. You don't want to be in a "need to sell" position in times like that. By the time 7-10 years is up, you should be good.
Of course, all that goes out the window if the economy keeps going north like it has been. Your value may just keep climbing.

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Braaapin' aint easy.

1/9/2018 3:59 PM

The title ins company or seller might be on the hook for it if it's not code/permitted. When did you buy? Did you know about it and got a discount?
TM

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www.alljackedupinc.com home of the Switch Hauler, the only modular hauling system www.sprocketstuff.com home of the Counter Sprocket Tool

1/9/2018 4:36 PM

-MAVERICK- wrote:

Was the old garage permitted? It doesn't meet the current code but depending on when it was built it could be grandfathered in.

If it truly needs to be torn down then the above doesn't really matter.

How big of a garage/shop are we talking about? The guy that quoted you 20k could be in the ball park or way out of it.

The garage is 24x26. The pad is already there and in good shape, aside from the 12x18 section that needs to be brought up level with the new addition pad... I'm not sure the process for adding on top of that slab, it's in good shape as well so I'm sure with some surface prep they can apply on top of it.
I saw an advertised price for a 24x24, including the slab for $15g, on basically the garage shell (I finish electrical and the inside). They are local and I came across it later last night... They also offer financing.

If I were to "save" the garage that is there, the entire roof has to come off, it would need all the trusses replaced and there would only be one wall worth saving.

The old garage did have a permit, but as the rules are now it wouldn't meet by-law because the loft makes it too tall. The new garage would be fine with it's reduced height.

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1/9/2018 4:38 PM

kkawboy14 wrote:

Second mortgage large enough to pay all your debts off and build the garage!

Truck will be paid off, and I will have my line of credit to 0 when I pull the trigger on this... So there really won't be any other debt to throw on top of it.

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1/9/2018 4:44 PM

Falcon wrote:

7 years out at least, you're golden. I have real estate friends who are telling me my plan to buy a house in 2020 is a good one. Things are going to be expensive until then, but there may be another "adjustment" coming and stuff will get cheap again. You don't want to be in a "need to sell" position in times like that. By the time 7-10 years is up, you should be good.
Of course, all that goes out the window if the economy keeps going north like it has been. Your value may just keep climbing.

Totally different markets between CA and a little military town in New Brunswick... The good thing about it, is every year there is a big shuffle of people, and any young guy/small family that doesn't want to spend a fortune would be interested in this place... It was the cheapest I could find on the market that was presentable inside with a garage... The yard was a disaster, and I think that's why this place was overlooked combined with it not being posting season... Was an old retired couple that had moved to PEI and took my first offer... They just wanted it off their minds.

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1/9/2018 5:57 PM
Edited Date/Time: 1/9/2018 5:58 PM

-MAVERICK- wrote:

Was the old garage permitted? It doesn't meet the current code but depending on when it was built it could be grandfathered in.

If it truly needs to be torn down then the above doesn't really matter.

How big of a garage/shop are we talking about? The guy that quoted you 20k could be in the ball park or way out of it.

White_Trash wrote:

The garage is 24x26. The pad is already there and in good shape, aside from the 12x18 section that needs to be brought up level with the new addition pad... I'm not sure the process for adding on top of that slab, it's in good shape as well so I'm sure with some surface prep they can apply on top of it.
I saw an advertised price for a 24x24, including the slab for $15g, on basically the garage shell (I finish electrical and the inside). They are local and I came across it later last night... They also offer financing.

If I were to "save" the garage that is there, the entire roof has to come off, it would need all the trusses replaced and there would only be one wall worth saving.

The old garage did have a permit, but as the rules are now it wouldn't meet by-law because the loft makes it too tall. The new garage would be fine with it's reduced height.

I don't know what shape the old structure is in but it might be easier just to start from scratch. We're in different parts of the country but I'll say the 15k option you found is in the ball park. I'm in the Ottawa region and for a shop you're looking at $30-50 a square foot depending on the extent you finish it.

Honestly that's probably your best option. You'll still have to do the interior work yourself but if you're handy enough it shouldn't be too difficult. Let them do all the framing, windows, roof and exterior and worry about the interior. Not to mention no heavy lifting on your part. Just make sure to wire the shop before they do the exterior, unless you don't need exterior outlets. I would advise against that.

I'd look more into it if I we're you. Call them up and let them see your place for a more accurate price. They'll see your slab problem and might or might not know what the best solution is for it. You might have to talk to a concrete contractor. They would know more about it anyways.

As for financing that's up to you. Personally for 15-20k I'd try and save up for it or throw it in the mortgage. Monthly payments wouldn't change all that much.

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"Sorry Goose, but it's time to buzz the tower."

1/9/2018 6:11 PM

The Original garage is about 50 years old... And the old guy just built on to it.

I figured 15k was reasonable. I already have the electrical planned out, I just put in a new panel and breakers last year, I'll re-use all of that stuff and as much wire as possible. My only extra will be new LED lighting for the interior. To finish the inside of the garage, I'll be saving as much of my current chipboard that is on the walls now. The ceiling is pretty much already covered since I'll use what constitutes as the floor of my current loft... I'll be in to the interior for under 2g doing it myself.

I'll give that company a shout to see what kind of ballpark figure I can get. Even if I just put 1/3 of the price down, that really brings any payments down to being super affordable.

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1/9/2018 6:28 PM

If you plan on financing it the more you can put down the better. Don't forget to keep a couple grand for your interior.

Should be a good little project.

How do you plan on finishing the interior walls? Drywall, sheet metal or simply insulate with vapor barrier? LED + white sheet metal makes for a very bright space.

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"Sorry Goose, but it's time to buzz the tower."

1/9/2018 6:42 PM

I could price it out with sheet metal, but I'm hoping I can save the majority of the OSB that is on my walls now and re-use it and then just paint it white. If I can save what I think I can, then I have the supplies for about 90% of my ceiling and probably half of the walls.
Plan is to paint all of my storage lockers and shelving Yamaha blue to sort of give it a theme.

I tell you, it will be nice to have a draft free, insulated, bright work space in there... It sucks working on the car in a dim, drafty, cold shop.

I'm saving the current siding and the floor joists to build a garden shed too... Won't cost me much to get all of the gardening and lawn care stuff out of the garage.

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1/9/2018 9:13 PM

Sell a testicle.... they’re going for like 20k.

Boom - problem solved

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Washed up moto and enduro weekend warrior.

1/9/2018 11:44 PM
Edited Date/Time: 1/9/2018 11:45 PM

MxKing809 wrote:

Sell a testicle.... they’re going for like 20k.

Boom - problem solved

No shit? I gotta get the wife pregnant one more time then I don't see the need for any testicles. Sign me up!

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1/10/2018 2:30 AM

My buddy put one of those steel buildings up a couple years ago , he said after pricing different ways ,wood was completely off the table,steel buildings are much cheaper.

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1/10/2018 7:48 AM

MxKing809 wrote:

Sell a testicle.... they’re going for like 20k.

Boom - problem solved

Just remember, a guys gotta have some balls to sell one!

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1/10/2018 9:34 AM

In case you don't know VA first mortgage loans can go to 100% of value on a "cash-out"refinance. May or may not work for your situation but if you are going to finance it they are a great option.......

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1/10/2018 9:42 AM

ToolMaker wrote:

The title ins company or seller might be on the hook for it if it's not code/permitted. When did you buy? Did you know about it and got a discount?
TM

Highly doubtful. Title insurance usually has nothing in it about codes it is simply for protection of ownership. They have no way of knowing if structures, especially a garage or shop has permit/code issues. Same with seller to some extent depending on local laws a what the seller disclosure part of the real estate contract looked like.........

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1/10/2018 10:41 AM

ToolMaker wrote:

The title ins company or seller might be on the hook for it if it's not code/permitted. When did you buy? Did you know about it and got a discount?
TM

Tracktor wrote:

Highly doubtful. Title insurance usually has nothing in it about codes it is simply for protection of ownership. They have no way of knowing if structures, especially a garage or shop has permit/code issues. Same with seller to some extent depending on local laws a what the seller disclosure part of the real estate contract looked like.........

Which is why you use a competent home inspector to reveal any and all possible defects with structures/systems before signing the papers.

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1/10/2018 11:04 AM

ToolMaker wrote:

The title ins company or seller might be on the hook for it if it's not code/permitted. When did you buy? Did you know about it and got a discount?
TM

Tracktor wrote:

Highly doubtful. Title insurance usually has nothing in it about codes it is simply for protection of ownership. They have no way of knowing if structures, especially a garage or shop has permit/code issues. Same with seller to some extent depending on local laws a what the seller disclosure part of the real estate contract looked like.........

So I may have misspoke on that but when you're in escrow there is a fee you pay for finding all
that information. I'm not sure which entity it is, however, If they fail to find and disclose it to you it's on them.
It's worth exploring if you have to take the whole garage down. Here in CA, I helped my parents sell a house a few
years back. there was an unpermitted room addition. I recall the realtor telling me that if we didn't disclose that it
was unpermitted the information would be found out anyway through xyz. And if it wasn't found out through that search
the buyer could later come back to us for compensation if we knowingly sold it without divulging the info. However,
he said that if we didn't know (perhaps we bought it that way and the previous owner didn't tell us) and xzy didn't find out, that the buyer could later go back to (I thought he said title company but this is not the first time memory has failed me) xyz company for compensation as they were paid to find out all this info.
TM

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www.alljackedupinc.com home of the Switch Hauler, the only modular hauling system www.sprocketstuff.com home of the Counter Sprocket Tool

1/11/2018 10:23 AM

ToolMaker wrote:

So I may have misspoke on that but when you're in escrow there is a fee you pay for finding all
that information. I'm not sure which entity it is, however, If they fail to find and disclose it to you it's on them.
It's worth exploring if you have to take the whole garage down. Here in CA, I helped my parents sell a house a few
years back. there was an unpermitted room addition. I recall the realtor telling me that if we didn't disclose that it
was unpermitted the information would be found out anyway through xyz. And if it wasn't found out through that search
the buyer could later come back to us for compensation if we knowingly sold it without divulging the info. However,
he said that if we didn't know (perhaps we bought it that way and the previous owner didn't tell us) and xzy didn't find out, that the buyer could later go back to (I thought he said title company but this is not the first time memory has failed me) xyz company for compensation as they were paid to find out all this info.
TM

That is usually information in the Seller Disclosure portion of the Purchase Agreement. However, every state has different laws and stuff like this often isn't worth the $$ to pursue as proving negligence, etc. is pretty difficult. Especially since it isn't on the actual home.
Even a home inspector isn't a structural engineer so can't be expected to catch every issue. I also don't think they are going to advise to deeply on permitting issues as that becomes a legal issue & often requires digging into public records. Add to that there are often different rules/laws for contractors and homeowners doing work depending on area....

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1/11/2018 10:36 AM

Falcon wrote:

7 years out at least, you're golden. I have real estate friends who are telling me my plan to buy a house in 2020 is a good one. Things are going to be expensive until then, but there may be another "adjustment" coming and stuff will get cheap again. You don't want to be in a "need to sell" position in times like that. By the time 7-10 years is up, you should be good.
Of course, all that goes out the window if the economy keeps going north like it has been. Your value may just keep climbing.

White_Trash wrote:

Totally different markets between CA and a little military town in New Brunswick... The good thing about it, is every year there is a big shuffle of people, and any young guy/small family that doesn't want to spend a fortune would be interested in this place... It was the cheapest I could find on the market that was presentable inside with a garage... The yard was a disaster, and I think that's why this place was overlooked combined with it not being posting season... Was an old retired couple that had moved to PEI and took my first offer... They just wanted it off their minds.

The numbers may be different but the principle is the same. Economists have been calling for an "echo bubble" in the real estate market for a few years now and you definitely don't want to get stuck with a property that is worth less than you owe. I think you have all the bases covered, however, with the equity at 15% - especially if you won't have any other debt when you pull the trigger.



BTW, I'm starting to hear all the same radio commercials that were on back when the real estate bubble was about to pop: "Take cash out of your home's value!" "Refinance now!", etc.

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Braaapin' aint easy.

1/12/2018 6:04 AM
Edited Date/Time: 1/12/2018 6:04 AM

I just came across an ad for a company called versa tube . Wasn't sure what you had in mind as far as construction.

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1/13/2018 5:41 AM

Dont do it Cheap....please no OSB on the walls...painted or otherwise.

For the floor...I regret having epoxy put down...if I had it to do again I would just stain and seal the concrete floor.

Once you begin...do it all and do it quickly and complete...dont drag it out...if it cost you a little more dough...get it done.

If you can get the 20k and add it to your mortgage...thats a no brainer.

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2019 KTM 350 XCF
Single Track Warrior



1/13/2018 6:26 AM

Deal Brothers Trailers wrote:

Dont do it Cheap....please no OSB on the walls...painted or otherwise.

For the floor...I regret having epoxy put down...if I had it to do again I would just stain and seal the concrete floor.

Once you begin...do it all and do it quickly and complete...dont drag it out...if it cost you a little more dough...get it done.

If you can get the 20k and add it to your mortgage...thats a no brainer.

He's from canada. You ever walked on sealed concrete with snow on your boots ? Its dangerously slick.

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