We met with the architect this week and are trying to make decisions about how to work everything. There are a lot of questions to answer before we move forward with him, but I am convinced that he will be a great asset to optimization of space & style. The big question is one of liability. We'll figure that out over the next couple of days. Meanwhile, the underwriters are cloistered and pondering the details of usury. I would have thought they would be able to streamline everything and get back to me quickly, but they have shown an unwillingness to engage their cerebral cortexes when making decisions.
Specifically, we have bought 2 houses that have been converted into 1. We are interested in reversing this union and selling 2 houses when we are finished, therefore almost doubling the return that we will get. The underwriters have created a catch 22 as far as attaining construction financing. If we get a loan on the house then we will be in breech of contract by splitting it in two which is the course of action we specify in getting a construction loan. If we want to get 2 loans, one for each house,we must get them deeded separately which will be impossible because they are not yet separate houses.
The simple, but not wholly attractive solution has been to use alternative financing, ie 2nd mortgages on our existing properties. This way the underwriters have no knowledge of what is going on until we deed the properties separately after they are completed. At that point they have the option of forcing us to sell one of the houses to cover the mortgage, if they want to be a pain. Since this is exactly what we intend to do, I anticipate very little problem. In fact, the mortgage company that holds the note may not even notice the modification of the deed. We'll see. For now, we are tightening the construction schedule to try to finish the first house in 6 months. I've got a feeling this is going to get real tough real quick.
