PolishPete

Ok,

So long story short. The g/f and I are in the market for a home. First time home buyers. We've been looking for about 6 months and are committing to buying in about 2 months. It's currently my mom and I living in a house worth maybe $600K in this market, and was appraised at over $800K before the big burst. Our block and town has gone through the whole tear down and build bigger faze, so...all the houses are now either big and new / (2 of them) are old house with HUGE additions built on. Each house has very nice architecture / design (one of them looks like a castle, etc)...no cookie cutter, so its a very great neighborhood architecturally to live in. Also, we're in a very good suburb of Chicago, so to get any land is impossible...it's all sold and the only way to buy land for less than $300K is to move very West/North/South.

Anyway, since we are moving out, my mom has offered to basically give us the house. She doesn't want to live alone, and we have an acre wooded lot. She would like to have a guest house built in one of the corners right by the road. So basically build a one car garage, short driveway, and kitchen, bedroom, bathroom, etc. For 1 person. We would then do a cash out loan and have my g/f and I on it. The house hasn't been updated since the 90's, so basically everything needs to be fixed/updated. We don't want to do a sale as we couldn't afford the house straight out + fix it...so we would basically be added to the loan and deed of the house, and she would still own it and we would live in the main house, and she would live in the guest house.

Now, to get to the question. Where do we start on the guest house. Where do I find plans for a house, or a builder, or contractor, or whomever to get the ball rolling on what we could build there?

Basically...where do I start? Aziners....please help!!

NSXNEXT

iTrader: (2)

Talk to the local building inspector and make sure you can build that second house.

spdy0001

Don't do it
I can't possibly see how this can turn out well

indoMFP

Possible issues and sticking points:
1. You live in a house which I assume is paid off, by your mother, and you want include your girlfriend (not even a wife, but just a girlfriend) on a loan for something that valuable and that is yours and your mothers? Not smart and may hurt you in the end if she decided money is worth more that the relationship; your family just lost out on half a valuable property and only recourse is to sell and give her what she is due.
2. Building restrictions may prevent you from building a one story garage or dwelling due to the surrounding structures that are to be and have been built.

Some Solutions:
1. Marry the girlfriend and have her sign a pre-nup saying the property is destined inheritance and she has no right to it.
-or-
You keep the property in your mom's name or get your mom to obtain a loan for a property improvement and attach your name to the improvement loan.
-or-
If your mom is still paying a mortgage on the property, have your name attached to the property and thus no tax consequences or if any, very little.

2. Steel buildings. They are cheap and can be finished very inexpensively. Get codes from the city to see if this is allowed. You can get small 800 square foot place down here finished for under 80 grand... but that is Texas...

Good Luck.

PolishPete

Thanks for the tips guys.

I'm not really concerned about the g/f. We have been together 6+ years, and she would love to be married...but I'm not ready. Though she's the one, there's just not enough money to buy a house and pay for a wedding at the same time. Buying a house together first was our plan. We've been looking for about 6 months, and will be buying in the next 2. But yeah, she's the one, and not at all a threat.

My mom who I live with has been aware of this (us moving out soon), and is now offering to just give us the house if we build her a guest house and she stays there. The house has a $150K mtg, and we would refi/cash out with mom/me/girlfriend to get money to build the guest house and upgrade the existing house. We would need to be put on the loan and deed because she couldn't just give us the house (tax problems), or sell it cheap. According to the research I've found. If the house is worth $800K, she can't just sell it for $300K. That's what I've found, but if someone knows better, please let me know.