Usonian Foundation Notes and Cost Notes

Talked to an old excavator guy today to get quote to dig our foundation (part of further pinning down the costs). He had some sagely advice for our new home. Said “A basement is a swimming pool waiting to happen…may take a year or five but it will certainly fill up with water.” This goes along the same lines as Frank Lloyd Wright’s comment that nothing good ever came out of a basement. Mike actually told us to dig a footer down one foot and that’s all the excavating you need. Build your frost wall up 3 feet 6 inches more and backfill the outside and inside and you have yourself a raised safe foundation. Can’t wait…learning so much from old school guys that things are finally falling into place in my mind.

Reran all the materials costs in detail again today. Still well with projected costs of around $120K to $130K including septic, util hookups and permits. Very cheap skilled labour here so I am not so worried about the unknown labour costs that might pop-up. Land price is still up in the air but we have budgeted $50 to $90K making a total around $170K to a max of $200K. Yeah the naysayers are saying there is no way to build it for that but my previous profession did include very accurate cost estimations and I think we will be within 10% of that cost.

Well we are off to Taliesin, Robie House and Wingspread and maybe a few more stops for a week. Updates when back. Make sure to enjoy your own summer and those that are on their own Usonian paths, I wish you great luck.

(sorry forgot the property that is on the previous plan is a potential property we are considering that is 150 feet X 250 feet (cost $50K with wiggle room of $5000 but it is on a major county road…still not sure if it will block sound which is what we trying to get away from here. One day I will take an audio sample here to see what I mean.)

Usonian Cooling

Thoughts on cooling our Usonian house in the future.

Recently, in our current home we have been able to keep the interior temperature around 15 degrees F below the outside house temperature using only passive cooling methods.

1. Our property is very shaded and  provides excellent cross breezes. The mature trees are fantastic and perfectly positioned to literally cool the whole house in the summer and they are mostly maples so in the winter the leaves fall off and the lower sun warms the house in winter.

2. We close the windows in the morning and open them in the evening. Doing so it is 90 degrees outside and 75 inside for a majority of the day even with high humidity.

3. Ceiling fans provide direct cooling on the body.

4. We do not use this but in my childhood home we had what is known as a whole house fan. The idea is it draws cool air from the lower level and expels the hot air out the roof. This will certainly be going in the new home.

5. Another note is that because the whole house is on one level, the upper level is not even there to collect heat. In our current home the upstairs level just collects heat and is unbearable at times. It will not be missed.

6. Open property or on the lake. This will provide a nice cooling wind.

Now, I know at some point we will have absolutely sweltering days with no air movement and have to turn the A/C on but not for a few more weeks at least and by then summer is half over.

In the new house we will likely be running A/C duct work under the slab just because it is open and cannot really be done later. We may not install the A/C or backup forced air gas system for some time but at least the ducts are in place.

Well those are my thoughts on the cooling situation.

Usonian Floorplans – Revised

adams_usonian_floorplans

adams_usonian_floorplans_plotThought I would post these quick to show everyone some of the refinements to our plans.

 

The most notable is the swapping of the tub in the main bath to the master bathroom. We thought hard about this one and figured the kids or guests would likely never use the tub so we shifted around to the master. This made room for the moving around of utilities and gave us some storage space for our tools and things we use in the house all the time (the same space that is currently in our laundry room.

Quick Update…

I apologize for not posting much but with winter FINALLY breaking (we had frost even in late May) we were both excited to get out into the outdoors and work on our property and my wife’s parent’s place.

We are planing a trip to Taliesin East and hope to also see the Johnson Wax Headquarters, Wingspread, Monona Terrace and a few other places if time permits.

I’m hoping to do some panoramic photography at as many places and I can. I really feel this will help preserve these locations into the future and let many more people access the beauty that is Frank Lloyd Wright architecture.

Will catch up more soon. I have the design really refined and will have more Google Sketchup models soon.

Revisit of Usonian Debt Concept…

I did a post awhile back about how purchasing and financing a typical car could have paid for land instead. I want to revisit that concept with some real figures as I feel it is super important to teach people this lesson. My nephew was over recently and I put pen to paper to show him this concept and he was shocked what you give up to own a new car.

The average new car price in the US is around $25,000 right now. The average payment for that car is around $500/mn. The average full coverage insurance rate (which is required by the lender) is around $250/mn but this figure can be as low as $150/mn up to over $500/mn. We are talking an average here. So the average car payment for the next 5 years of the loan is $750/mn or $45,000 over the life of the loan. At the end of the loan the car’s value (accounting for 20% depreciation/year) is around $8,100 but will likely sell for half that. So at the end of 5 years of loan payments and full coverage insurance you literally burned through around $40,000.

The Tax Man commeth. OK let’s also factor in the 20% (average) of that $40K you had to pay the Government. So we are now at $48,000. There is also the sales tax on the original $25K which can be as much as say 7% or $1750. Also a full drive train policy at say $1500. OK so a grand total of around $52,000 average to drive that shiny new car.

Now let’s try this scenario. Go buy a used car (maybe even the one the guy just got rid of after throwing away $40,000) for $2500. If you think they are not out there you are wrong. Cash talks and because you saved your cash you can say a lot! You only need to carry liability insurance which averages around $100/mn. So at the end of 5 years you spent a total of $8500. Let’s also say you have to put $2000 in repairs into the car one day so we are around $10,500. Pay the tax man for income tax and sales tax on the $2500 and we are around $13,000 for 5 years of used car ownership.

You could have taken that extra $39,000 and invested it and maybe ended up around $50,000 total . Now lets move 5 years forward again. If you then invested that $50,000 in land which historically appreciates at 10% (and maybe much more into the future, will explain why in a later post)…after 10 years that $50,000 would be worth around $75000, plus you will have another $50K to add to that.

So buying used for 10 years would allow you to shove $125,000 into land that is worth more and more money as time goes on instead of a 2 new cars that are literally garbage after 5 years.

These are hard figures. They are not made up and the typical American or Canadian is literally throwing away the ability to have bought and paid for land simply because they want to drive a new car every 5 years.

The concept does not only apply to cars, it applies to everything. The second you borrow money to pay for stuff, it is the same second you are a slave to that stuff forever. It is Frank Lloyd Wright’s concept exactly (even though he did not always follow it earlier in life).

I have been watching youtube videos about a financial adviser named Dave Ramsey that will likely back up everything I have said above. He actually has a very sane plan to get you to land ownership (outright owning it…imagine the concept!) within a very short amount of time.

Here is one video that made a lot of sense to me:

Just a note I want to address about car ownership again is the misconception about owning a new car is more reliable. Some of the most expensive problems I have seen with cars happen within 2 years of ownership. Even if you put $100/mn aside for a repair fund, you would still be tremendously ahead on the reliability factor. So what if the used car breaks down. A cab and tow truck cost maybe $100. A “new” used car would be $2500. Again, so what?

The last note I wanted to make was in regard to an economical-on-gas-car versus a larger car or truck. Again these are based on hard figures made with countless studies. Some of the cheapest cost of ownership cars in the world are huge Cadillacs. I have NEVER owned a small, gas-mizer car that didn’t break down and cost a fortune to fix. I have however owned V8 trucks that yes cost more on gas but only depreciated a few dollars a month. In fact, my last truck I owned for 5 years and sold it for only $1,000 less than what I paid for it. Yes I spent maybe twice on gas over the years but I did not put one repair into it except a $100 battery. On the same token we bought a used neon, put $2500 in repairs, its been on the road for only about 2 months in the past 3 years and it is worth literally nothing. “But it was good on gas!” Bottom line, really consider the total cost of ownership, not the MPG and study this just as I did. You may be shocked what you learn.

The lesson I was trying to teach my nephew is don’t be a slave to your stuff. Really keep a goal in mind and for my wife and I, that is our Usonian Dream…I only wish I learned these lessons at his age.

Usonian Property Considerations…

A lot has been going on with the progress of our Usonian dreams over the past two weeks.

We found the area we likely want to purchase in and found several properties that are basically lakefront on a bluff and extremely affordable. It is approximately 40 miles from our current location but suitable in the future. However, once we began to research this, the more possible expenses, risks and considerations came up.

1) Conservation Authority.

Because the bluff erodes away at apparently about 1.5 feet per year average (sometimes more, sometimes less) the setback for the house must maintained a safe distance for at least 100 years and more likely 180 years. The current regulation is around 180 to 300 feet depending on the location. Not a problem unless someone builds closer to the bluff and sort of blocks our potential view.

2) Foundation.

I have been speaking with both the local building authorities and a reader of this blog regarding the unknown expenses that may arise from building in this general location. One is the soil. It is considered “fox gravelly loam” which drains very well but you may run into soft spots or high water tables that will add expenses. The other is that in the area, an engineered foundation is required adding yet another expense. We are still considering about 3 foundation methods, piering/suspension foundations, Frank Lloyd Wrights slab on grade method (which I suspect would work well in this situation but apparently is harder to get approved in that area) or standard footer/4 to 5 feet foundation walls. The building authorities told me to consider up to twice the normal footer specs depending on the soil conditions…which add another expense…the soil report. My rough estimates after calling around a bit would be around $50K for a solid foundation which is about double or higher my original estimates. However, the soil is more suitable for a septic bed which can save some of that added cost. This is a significant consideration because we can literally be paying more for those two items than 4 acres of land!

3) Real Estate.

After some preliminary research, not many properties are selling in that area which changes our purchasing strategy. I’ll describe this more in a moment. For now we realized…we can wait a seller out. Not much is moving in the price range we have looked at. In some cases, if the seller does not sell within the next few years, the authorities won’t let them sell it as a building lot…period. So eventually we may be looking at a reverse bidding (more selling) war where the people purchasing the properties and building will begin to be courted by the land owners at the last minute. That my friend is a good bargaining position!

4) Financing.

I spoke to a friend that manages a mortgage department for a major Canadian bank about our financing options again. He basically told me what we heard before…banks do not want to take the risk of financing land because of the lack of potential equity in the land versus a fully built home. In other words, a piece of land is likely harder to sell in the case of a default than a built home.

This falls in line with Frank Lloyd Wright’s comments on the subject which was paraphrased as “Banks don’t finance homes to live in they finance homes to sell”. We have certainly found that in our own lives and were stuck in that thinking before we realized we may build a house we can spend forever in. A very romantic and real notion.

However, my friend had a fantastic idea. Because we are not likely ready to build for about 2 to 3 years time he said take what you would have put into that property in interest and taxes for 3 years and put that amount into an interest baring account each month instead. That way at the end of the 3 years we have a significant down-payment and a private mortgage lender will likely finance that…no problem because they are protected with our 35% down. This allows a better bargaining position all the way around, better rates and lets us wait to see if someone else is building in that area to predict the risks we are going to encounter with the soil and foundation situation (which we found out happened a few miles away). Also, we will have more equity in our current home which we can then refinance to use for building costs on the new property. Made a lot of sense to me because instead of losing money each month, we are gaining in the long run on interest and taxes saved. It is entirely possible to have the entire property paid for in that 3 years which puts us in an amazing situation because then we can build with the equity in land and not touch the equity in our current home. I was stunned at my friend’s thinking because it is a totally Usonian way to do things because at the end of the day, we will be carrying very little debt throughout the process of achieving our Usonian dream!

Update to Possible Property

Dealing with Sellers inflating their properties seems to be the norm here!

Dealing with Sellers inflating their properties seems to be the norm here!

Oh man! Grrrrr! Once again dealing with someone inflating their property beyond belief. Not sure why we keep running into this as the market is very soft here.

Many land owners have decided to divide off their property and sell it themselves. Now I have no problem with doing so but when they literally double the price of their properties compared to others on the same exact street for no logical reason…that I find frustrating.

My wife really loves this property yet judging from Google Maps history feature, it has been listed since at least 2009! I don’t mind paying a bit extra if it is something unique or selling like hotcakes…but it just isn’t.

Anyone have ideas how to deal with a private vendor such as this? Please leave your comment. Thanks.