All Forum Posts by: Nik Kov

So I'm doing some comparables on what sold in the last 3 years in an area we're actually looking to do a new construction. We're looking to build something unique/contemporary with of course elements of the local area (mountain town). All of the stuff that has sold in the last 3 years, I'd say 95% is that classic boring ski chalet/log cabin look. The very few builds that have sold that even come remotely close have sold for a fairly nice premium. 

How do i look at this? The optimist in me states that if I build something beautiful/unique, I can stand out. Furthermore, I know that there actually are really cool homes in the area, because I see them on Airbnb, seemingly killing it. So it seems to me that folks are probably happy to sit on the money making machines rather than sell. Are these bullish signals?    

So I'm new to this, bear with me here.

I'm trying to understand how to think about equity in a new construction. I've seen folks say things to me like, we spent 400k to build and then the house was appraised at 550k upon completion. How does that happen? Is it as simple as: "most houses in the area sell/appraise for X, figure out how to build a house for X-20%" and there's your 20% immediate equity in a new build? 

Furthermore, I could've sworn appraisals are done when you have some level of construction documents so that a bank can loan you appropriately. If that's the case, at what point can you save money on the build? Do you do change orders to cheapen out on certain materials? I'm pretty confused here about the whole thing. 

Quote from @Bruce Woodruff:

Quote from @Nik Kov:

Rather than finding the right deal, is doing a custom build something worth considering at all? We're looking to do that right now, and a big part of the allure is to save money on airbnbs when we travel ourselves, but also break even on our loan. Alternatively, we can pay all cash too. Looking to leverage that though. 

 It just seems that any kind of new build, let alone a custom build, can make money right now. SF build prices are just too high. Might be areas that will work though, but be careful....

Can or can't make money? Looking at 350$/sq ft in a certain vacation area with a decent CoC% based on comparables

Rather than finding the right deal, is doing a custom build something worth considering at all? We're looking to do that right now, and a big part of the allure is to save money on airbnbs when we travel ourselves, but also break even on our loan. Alternatively, we can pay all cash too. Looking to leverage that though. 

Quote from @Michael Baum:

Yeah, I think he is right on the neighbors if you deviate from the local style.

It will take some work to get them overturned or changed. It could cost quite a lot.

I feel pretty sure that the single home only is county so I would check that.

You need to decide if the juice is worth the squeeze. 

The interesting thing is when we drove around the area, the houses weren't in any particular "style" -- one looked to be like a classic large ski chalet, another was a different type. Their only commonality was "expensive" 

Quote from @Bruce Woodruff:

Michael got most of it, I would add that:

1) IMO you should let 200 SF ruin a deal for you

2) When they say 1 property do they mean 1 house? Because you can build a house with an attached guest house, then just seal off the door and have 2 houses.

3) If you have to have chickens then you need to move on because they ain't gonna change that easily

4) If the random crap bothers you, also move on

5) You have your extra structure already in the old cabin so that's a bonus. re they making you tear it down.

Sounds like way too many restrictions for me, especially out in the country on a 5 acre lot. I don't like restrictions and they're usually County driven, so I'd look in another county...

1) Sorry, should or shouldn't? 
2) It states -- "No structure shall be erected on any residential lot other than one detached family dweling and an attached or detached or build in private garage for not more than three automobiles. The floor area of the main structure, exclusive of porches and garages shall be no less than 1500 sq ft of livable space." 
3) not too serious about the livestock/poultry 
4) It only does but legally. If I build something contemporary, will my neighbors sue me? 

Also, the craziest part of all of this is that the house wouldn't even be visible whatsoever from the main road. There's a little driveway that goes back quite aways into a lot of trees and its all tucked away. 

Quote from @Michael Baum:

Hey @Nik Kov, so is this in some kind of neighborhood?

I will say that these restrictions look like something the county put in place due to zoning or whatever and not some kind of HOA.

If that is the case, they will be nearly impossible to remove.

The size of the house is pretty typical of a lot of county guidelines. 200 extra SQFT is not that big a deal IMHO.

The property is a zoned SFR1 or whatever the New York state zoning codes are. That is something that isn't going to be changed.

Regarding the cabin, that could be considered a fixed structure. Even with no power to it. We have a garden shed on a foundation that is considered a permanent structure. Temporary structures would be something like those steel, freestanding carports.

That "random crap" is a way to keep the area looking typical stylistically with other homes. They don't want a super modern home build in an area filled with craftsman or farm style homes. That can really throw off property values.

Just move on to a different lot if you can't live with these restrictions. Even if they are for the neighborhood, they are very difficult to remove.

It's in a town. It's a mountain town, essentially, mostly full of second home vacation owners.

The restrictions were created by the original parent parcel owners before they subdivided it all. But they are recorded at the county level at this point. I think overturning some of them will include getting some of the nearby lots to vote on it as there is a clause stating that that's allowed.

The thing that scares me the most is regarding the stylistic stuff -- there's a clause stating -- "The homes shall be harmonious with and reflect the exterior design characteristics of these homes already erected on the property" and that combined with -- "it should be lawful for any peron or persons owning any real property situated in said tract, to prosecute an action or proceeding at law or in equity against a person or persons either to prevent him or them from violating these covenants or to recover damages for such violation"

My RE lawyer friend said that its such a broad clause that it could potentially open you up to getting sued if a neighbor really wanted to depending on the stylistic choice of your home.

Looking into a lot that my wife and I love, but comes with some deed restrcitions written in 1985 that include:

- liveable area cannot be smaller than 1500sq ft (we want something like 1300)

- no poultry whatsoever 

- only one property can be built, 2 family max. this is 5+ acres, we want the flexibility to build 2 houses on it! 

- no temporary structures (this property comes with an off grid cabin which is super cool) so it looks like previous owners already broke the deed restriction.

- bunch of other random crap about how the house should look, similar to an HOA

Can anything be done to overturn some of this stuff?

Quote from @Chris Seveney:

@Nik Kov

Take a course at a site like getrefm.com

Great courses

Note I have zero affiliation with them and do not get compensated in any way from them.

 Thank you! Will definitely look into thi

Quote from @Jeremy Jareckyj:

I got a good STR one I have tweaked. Happy to share.

 Would love it! Feel free to DM me