Potential Future Options

In case it wasn’t clear at the end of the last post, I have hit a major crossroads with the project.  I am evaluating my potential options going forward.  I have two main concerns.  The first is my apparent inability to get a loan for the septic and well, and the second is whether or not I can complete the work before snow flies. 

These are the paths forward that I see:

Cultivate other contacts for a loan.  One of my coworkers, Glenn, sometimes invests in small startups.  Tim knows a guy from a non-centralized bank.  

• This would be the ideal situation, but both are low probability.

Complete the home, refinance the mortgage on the land and get an equity loan. This requires that the home be completed before I can go in for the loan, it also requires an assessment be done.

• Pro – This would consolidate the loans. 
• Pro – It would be on a mortgage, which would have a better interest rate than I have on the land loan (and could get with a personal loan).  It also gives me a longer term, though I would hope not to have to use it.  This likely would result in the best terms for the loan.
• Con – Tiny homes are still a novelty in this part of the country.  This carries a lot of risk.  
• Con – If I don’t get the right assessor, he might value the home at less than 20k based on its size, or see it built on a camper frame and appraise it like a mobile home (which I have seen for free on Craigslist up here before...)  I really don’t know.  If either of those happen, I won’t have enough equity to cover the septic and well.  
• Con – Even if I do get a favorable assessment on the house (say 30-35k), most banks only lend equity up to 75-85% of the assessed value.  With a 30k assessment + 40k for the land, that gives me a value of 70k, minus the 24k I still owe on the land, I am pushing the limits of what I can get in an equity loan.  There is a good chance that unless everything is best-case scenario, I will still need a supplemental personal loan.
• Con – mortgages take months to get to closing, and I need to finish the house before I can start the process.  This would push me out until next spring at the earliest, possibly next summer or fall.

Bring the tiny home to a mobile home park and rent a lot.

• Pro – Don’t need the septic and well until later.  This gives me time, gets me out of my apartment, and will drastically reduce my living expenses.
• Con – Doesn’t actually solve the problem.
• Con – I still have to pay rent, though as noted, it would be much cheaper.
• Con – Mobile home parks are uncommon.
• Con - The size might also be a problem.  I might have to get an exemption from another town to haul it there.  Just because it is a park doesn't mean it is exempt from zoning laws.
• Con – Requires the trailer be completed.  Meaning tires, trailer brakes, lights, etc.  I am already wavering on whether I can complete the home this year, this would guarantee I can’t.  
• Con – It means my home, where I need to work, would be far away from the shed and my tools (what ones I have left anyways).  I don’t have interior space to sacrifice for a workshop either.

Try something like a gofundme page.  To be honest, I don't really know a lot about this kind of thing other than they exist.

• Pro – Not a loan.
• Pro – Could potentially bring in revenue from places where tiny homes are more popular and appeal to people more amenable to the idea.
• Meh – This would also publicize my tiny home effort.  This requires a lot of the details be made public.  Not sure if this is a pro or con.  
• Con – 31k is a sizable goal.  
• Con – A lot of unknowns.  Could potentially involve me digitizing a lot of my plans to give people a reason to bite.  Might have to advertise it, etc.
• Con – No guarantees of getting anything; potentially not viable.

Complete the tiny home and save up for the septic.

• Pro – Only need a small personal loan.  I got approved for one already.
• Pro – Only would accrue a minimal amount of debt.
• Con – Would be stuck in my apartment, paying rent for another year or potentially 2.  I have run the numbers and this does cost me more than the interest on a loan.

Complete the tiny home and sell it.  Build another next year.  As long as the size is about the same, I wouldn’t have any issue with the building permits or anything like that.

• Pro – no loan.  I would have the cash required for at least the septic from selling the home.
• Con – As mentioned before, these are still a novelty type thing in this area.  There are a lot of towns that don’t allow them.  Many people in this area shun mobile homes in general (even though modern ones are as good or better built than a modular).  What kind of market is there for one of these here? 
• Con – It would require the tiny home be truly complete – meaning the trailer brakes will have to be fixed, tires replaced, etc.  All the things I am intending to put off would have to be completed.  This significantly increases the scope of work I need to do.
• Con – Timeframe.  This means next fall is a best case scenario.  I also have to keep in mind that my building permit is only good for a year, it would have to be finished by September next year. You may notice some conflict with those statements.
• Con – This might just be my laziness, but the thought of doing all this again is rather daunting.  It wouldn’t be as bad; I have learned a lot, but that is still a ton of work.  
• Con – I assume that I can get almost 30k for the home.  There is an inherent risk here.
• Con – Liability.  I am not a carpenter/plumber/electrician, nor do I have a PE (professional engineer) license.  I could do some basic testing of these systems, but if there are problems in a year or two, I could be liable for that.  I don’t know the legality of this avenue.  It is one thing for me to have to deal with the plumbing if I own the place.  If there is something that doesn’t meet building code but I did it anyways for space constraints or whatever reason, am I on the hook for it?  I would sell it in as-is condition with no implied warranty, but houses are a fickle thing legally.

Complete the tiny home and sell it, Use the money to put down on a real home next year and include the well and septic in that transaction.

• Pro – I get the real home in far less than the original 5 year plan.
• Pro – Everything is wrapped up in a conventional mortgage.
• Con – Everything that applied to the above scenario applies here.
• Con – I would need to get another building permit.  I don’t believe it possible to get everything in the works before next September.
• Con – This kind of screws with the whole “get out of debt” long term plan.  I would be taking on a large mortgage while still having the truck payment, student loans, etc.  Originally I wanted to pay off my debts before I accrued a large mortgage.
• Con – Similar to the previous con, this eliminates the “cheap living” situation.  A full-sized house will have full-sized bills.

I also originally had another option: get an excavator and do the excavation work myself to reduce the cost, but that plan isn’t feasible.  The excavating is a rather small part of the cost of the septic, less than 3k, and is only a small part of the well, only about 1k.  To add insult to injury, Barry said he doesn't think his excavator will break the old foundation.  If it is thin enough, it might be able to lift the corner and break off chunks that way, but that is unlikely.