Construction Loan

[Christopher]

I am looking to build a Yurt 735 sq ft I saw Smiling Woods love the design. I called the bank and I didn't get a no but the loan agent said it would be difficult for the appraiser they would need similar houses to appraise to get a value? It wasn't a no but it was discouraging. How do I get this done? I want a Yurt.

[MicheleLovesHawaii]

Great question. I'm curious to know if it's possible too! Following your post!

[MicheleLovesHawaii]

Originally Posted by Christopher

I am looking to build a Yurt 735 sq ft I saw Smiling Woods love the design. I called the bank and I didn't get a no but the loan agent said it would be difficult for the appraiser they would need similar houses to appraise to get a value? It wasn't a no but it was discouraging. How do I get this done? I want a Yurt.

I have done a little bit of research and you can definitely put your yurt on a credit card. Typically you pay half to order and pay the other half when it's ready to be picked up. Maybe you can find a contractor to put a platform up and a deck and put that on a credit card as well. Or get a personal loan of some sort. If you find a bank to do a construction loan, it'll be a small miracle, but i believe in miracles! Maybe try your credit union and start printing out ads of similar ones on land for sale. Just my thoughts.

[P Darrah]

So has there been any progress with a loan as of yet?
I'm getting ready to have the same problem I believe.

[Jafo]

I don't know if this will help, but when I built my yurt, I had part of the property selectively logged. Since the woods there are mostly hardwood, this was possible. Some of the trees themselves were bought for over $1,000 a piece. Selective logging is done up here in the winter when the ground is frozen and covered with snow. When they are done you can barely tell they did anything as they only take the mature straight trees of value. You generally split the profit of the log sale with the logger.

This did not pay for the yurt, but it did pay for the platform. A larger lot could have paid for both.

Just a thought.

[Wintergreen282]

I was reading Becky Kemery's book "Living in a Yurt". She said banks worry since yurts are "portable", someone could take out a loan and then disappear with it.

[hierony]

Heh, that seems like a reasonable argument until you consider car loans :P

[HawaiiYurts]

Originally Posted by hierony

Heh, that seems like a reasonable argument until you consider car loans :P

Or RV loans, modular homes, etc... I remember talking about this with Becky at one point. I disagreed with her findings. When we have worked on this in the past we haven't been stalled because they might be considered portable... once you have a permanent, residential permit and the yurt is on a permanent foundation, it is no more portable than many other forms of housing.

No, where we consistently stall is in the comparative market analysis. That's where the banks want to see more than one comparable structure sell within 10 square miles or less. In this way they can determine what the value of their investment would be should they have to foreclose. We have been building yurts in Hawaii for over 10 years and we have less than a handful of people who have decided to sell their yurt, none of them within 10 square miles of each other. Therein lies the issue. We have considered purposely building then selling within a certain area, but we're not that committed to letting the banks get involved.

[MT Rod]

Originally Posted by hierony

Heh, that seems like a reasonable argument until you consider car loans :P

That makes sense, until you consider you can't buy or sell a car without registering it with the state, and that car has a VIN number that is tracked, neither of which is required on the yurts I sell, ;-) .

I'm sure that illegal chop shops get a small percentage of vehicles, but not too many.


Rod
rodyurtlocker.com
Home Page.

[HawaiiYurts]

Yes, Vin numbers can be swapped, components swapped. Bottom line though, the banks don't balk at lending because of portability. A loan is given using social security numbers and any number of other personal info. Regardless of whether something is portable or not, they know where you 'live'. They know how to collect.

We put in a few years of part time work toward breaking the 'no construction loan' rule and heard the portability argument just a couple of times. Each time that argument was easily pushed through by pointing out the obvious - modular homes, vehicle loans, personal loans, etc. The wall that came up and stayed up was the Comparative Market Analysis. The ingredients needed to test the next phase are 2 or 3 yurt homes sold within 2 or 3 years of each other within 10 square miles. The yurt homes have to be built, then sold as a whole unit. It will set value for any future potential loans. Unfortunately, even if it is successful, it would only pertain to that general area because property prices vary wildly place to place. But at least it would set some precedence.