How have you paid for your shop?
 

It's that time. We've been in our current home since 2009 and with my mustang and repeated hail damage to all of my cars (3 separate hail storms that have caused over 20K in damage to my cars alone) my 2 car attached garage isn't enough.

My plan is to build a 28x30 shop with two 10' front doors and one rear "pass through" door with an enclosed double car port pushed against the back side for additional storage. I estimate that the cost will be around 25-30K as I'd like to use rafters that allow for upstairs storage. I'd like to go bigger but it is all I have room for.

We have no debt other than the house which is +/-2/3 paid for with +/-150K in equity. No car payments. No credit card debt.

I'm in the planning phase now and hope to start early next spring, but I'm having a hard time finding what the best financing option would be? I hope to have around 10K+ cash to use so a loan would only be 15-20K. My wife and I have both have credit scores over 800.

I also plan on only having the foundation, electrical, and shell done with a roof. I can enclose it, add the windows, siding, and interior.

I'm not looking for "keep saving and pay with cash", I just don't have time for that anymore. Even if I take out a 20K loan it will be paid back in 3-4 years. So how have you guys paid for your new shop?

Re: How have you paid for your shop?
 

How about a line of credit on your house? Its cheap money and you only pay interest as you use the money.

Re: How have you paid for your shop?
 

Second the home equity line of credit, the interest you pay is also tax deductible just like your mortgage.

Re: How have you paid for your shop?
 

With $10,000.00 cash on hand,I believe you can frame and roof a shop that size.
Maybe a small loan for the slab work,wiring and plumbing.
This will get your stuff under cover.
Then finish as you go or borrow enough to get a little farther along.
I,personally would never use my home/property as collateral for a loan.
Just my opinion.
Mike.:chevy:

Re: How have you paid for your shop?
 

Jesse my 28x24 garage cost $25,000 total. For everything. That was 10-15 years ago now. Mine has a room above that is also storage on both sides.
I barrowed off my 401 k and paid myself back.:chevy:

Re: How have you paid for your shop?
 

100%Chevy, normally I totally agree, but this has been pushed off for almost 5 years now, I'll be 37 soon and I can't work on my C10 and I'm sick of it. I'm also sick of having my cars repaired from hail damage. My wife's mustang has been damaged 3 times now. We've averaged at least one storm that causes damage every year the past 3 years, while they may be small storms that don't cause property damage, new cars metal is so thin the cars get damaged. Unfortunately concrete work has gone nuts the past few years and that alone may eat up my entire 10K. Ironically, out of all the hail storms we've had, none of our vehicles have been damaged driving or at work. Only at home :/

The only thing I'm not liking that I'm finding on the HELOC's is that most of them are adjustable rate. It looks like one of the few that *may* offer a fixed rate is Bank of American and that is who our loan is through.

I guess I'll have to talk to bank of america to see which is better for us, the HELOC or home equity loan? I do like the idea of being able to just add a couple grand more if I go over budget (like that never happens, right?)

Are those the only two viable options? It seems like everything else I look up (personal loans, etc) has a 7-8%+ interest rate?

Re: How have you paid for your shop?
 

Andy, how do you borrow from your 401K? Isn't there a lot of penalties and fees involved with that, especially since I'm only 36? My 401 is doing well, but I'm early enough in it that taking 15-20K out can greatly affect what I have down the road, especially since my current ROR is 16%. I don't think that's an option for me at this time.

Your garage is a good size, I just want a little more depth, I think my silverado is 20' long with the trailer hitch. I'd like to go 28' wide and 30' deep so I can walk around them and have bikes and work benches at the ends.

Re: How have you paid for your shop?
 

I'd be the third to suggest the homeline (house equity) credit. Tap in as you need it, claim the interest on your taxes.
We did a kitchen, improvements, and a car that way. Payments are lower too.

Re: How have you paid for your shop?
 

This is what I'm thinking. I can't build on the right side because that large green area to the left of my house is my septic tank/field AND there's a 100' power line easement that runs diagonally through there, and it comes within like 15' of my house.

On the left side I own +/-50' to the left. I want to offset the new shop 5' from the existing house because I have a serious slope that starts at the garage and goes up 4-5' over that 50', but even more so after 20' from the garage. There will likely be a short knee wall on that side.

The concrete drive in front of the garage *can* wait (but will likely be more cost effective to do all at once). Also, the "carport" addition is only a couple grand, (I just plan on pouring piers a few feet deep every 4' or so to anchor it down) but that too, can wait to be added. It will have a dirt floor.

Re: How have you paid for your shop?
 

If at all possible pour that floor too. I lived with a dirt floor in the carport as long as I could and paid more later than if I'd poured it with the rest. JMHO :)

Re: How have you paid for your shop?
 

That would be nice...

Or just pole barn the whole damn thing and do a 28x50.

I do want to match the house though. We're siding the house over the next couple of month so my wife is on board, but she wants it to match the house.

The intended use of the "carport" is storage for a boat, parts, and to put my truck during hail season, so it's not a big deal for me if it's got a dirt floor, but yes, I would love concrete, but I think it's just going to be too $$$.

Re: How have you paid for your shop?
 

For me it's a pay-as-I-go approach....I started with this 24 x 36 x 14 high....in 2008 I had it built for $6500.00

I first added a 12 x 36 lean-to one one side...

now I'm in the process of adding another 12 x 36 lean-to on the other side along with a 20 x 36 on the back.

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Re: How have you paid for your shop?
 

You are correct in that most lines of credit are variable rate. If you do a home equity loan you can usually get those at a fixed rate. Which ever way you go barrow it on the house for the tax deduction. I've done them all, pay as you, save till you have enough to do it, and barrow against the house. And for me barrow against the house wins out, mainly just because of time. Good luck, and enjoy the process.

Re: How have you paid for your shop?
 

Sometimes its worth checking your local municipal rules and land types etc. I know some guys who live more rurally have loans available for Farms (i.e. building a barn, even on a hobby farm) or who have logging land (garage for wood storage/drying) who can qualify for different loan types and government and municipal breaks (taxes, permits etc).

Otherwise im in the pay-as-you-go camp, so allow me a story:
I go to Jamaica whenever possible, and I've had plenty of late night (and heck, mid afternoon) long conversations about life with locals I've befriended outside the resorts. Culturally, Jamaicans exist in a world where "modern" credit is still something that only exists for the wealthy...most other folks operate on cash, trade, or personal credit (i.e. tabs) like we would back in the pre-plastic era.
When a Jamaican man decides to marry and build a home, he is often doing so brick-by-brick. If he has some money coming in, and is liked in his community, he buys as much material as he can afford and relies on friends and labor trade to build his walls. If he only gets 2 rooms done, then he has a 2 bedroom house until he can afford the rest. Sometimes, he may run out in the middle, and only have a few windows until he can afford the rest.

The reason I say all this, is that when a Jamaican man finishes his home, he OWNS every stone, nail, and board. If he dies tomorrow, his family owns the same. Yea, its a romantic thought that is less practical in our society, but the ability to live without while building your dream is an incredibly powerful bit of mental Ju-Jitsu.

Re: How have you paid for your shop?
 

I built a pole shop about 2 years ago now. I wanna say it was about $27K with loan fee. I did the site prep and electrical so that came outta my own pocket there. It is pretty plain being a 40x30x14, standard metal siding, R-7 insulated, no eves or windows with 1 man door and 2 roll ups that are 14x12 and a 12x12.

What I did was I got in touch with some of the local builders. Got estimates and went with who could provide best price and loan rates. Most builders have a preferred bank lined up for this reason and you can usually get a better % rate that way. Them getting their money is easier too, since they worked together before.

I had my loan set up with staged dispersals. I paid the down payment to get on the books and in line for the next available building slot. They dropped materials, I disperse them with loan money, they built the shell, I dispersed more money, they poured concrete, I dispersed more money. Basically if I felt something was not correct they had to fix it before they got more money. Time is money to them.

I would suggest you do what ya can to get concrete inside the building when building it.. And keep in mind outdoor concrete can cost more. I opted out on the outside concrete as an 8k extra. Gravel will do for now. I'm happy with what I got. My wife however,, not so much. :lol: She didn't see how I was compromising when I settled with a 40X30 instead if a 40X60. BTW: she don't know it, but I almost have it paid off now....:haha:

Re: How have you paid for your shop?
 

I had a 24x30 with 10 foot she'd out. Cost around 12000. Insulated and 9'insulated garage door. One entry. I did electical. I had Amish build it. They did great.

Re: How have you paid for your shop?
 

Look around there close to your shop...there should be a pot of gold right there...!:lol:

Re: How have you paid for your shop?
 

Jesse as long as you atake it out in a loan and don't take it out of the 401k it's not subject to penalties and fees. Your money is froze and it's like it's not making interest but you pay yourself back so the interest is paid by you.
At least that's how D/E is.
it took about 4-6 weeks to get it. :chevy:

Re: How have you paid for your shop?
 

I like the Jamaicans approach. Remember the economic crash of 2008?

Here is some information from Dave Ramsey on 401k loans.

https://www.daveramsey.com/blog/raid...could-cost-you

Re: How have you paid for your shop?
 

Don't borrow on a 401k.
Be aware that putting a 2nd lien on the house means that fail to pay, and they take the house. Most laugh and say they'll pay but it happens. Do you want to roll the dice w/ that 150k in equity?

With the OP's debt situation, I'll guess they have stellar credit (~800) and banks would love to make an unsecured loan at a somewhat higher rate.

Re: How have you paid for your shop?
 

I'm with Andy. ..I've borrowed a few times from my 401...I can borrow up to 60% of what I have in it and have 2 diff 401 loans at the same time...they deduct a payment from each check..interest goes back into your 401..you'd just need to research your 401 to see your options if you decide to go that route

Re: How have you paid for your shop?
 

If you change or loose your job you need to repay the loan immediately or you pay the penalties and fees...

There is always risk involved when borrowing money.

Could you get the roof up and park on gravel for awhile, kinda like a carport?

Re: How have you paid for your shop?
 

Damn....you guys have it good. Tax deductible mortgages...reasonable real estate prices and nice big lots in a lot of towns, etc.
You guys probably saw that thread about the ridiculous prices of real estate in a lot of Canada so this kind of fun, leisure, space shop stuff....is increasingly few and far between for a lot of folks...particularly young folks up here.

So that comment aside.....always add at least 2 to 4 ft in all directions to your final shop size decision.....lol. You will never regret it!!
Cement and foundations are cheap...so are knee walls or pilings if you have a sloped wall...but by all means, enlarge that shop!!...lol.
All good
Coley

Re: How have you paid for your shop?
 

...always add at least 2 to 4 ft in all directions to your final shop size decision.....lol. You will never regret it!!
Cement and foundations are cheap...so are knee walls or pilings if you have a sloped wall...but by all means, enlarge that shop!!...lol.
All good
Coley[/QUOTE]


My sentiments exactly

Re: How have you paid for your shop?
 

How have a I paid for my shop?

Mostly my gigolo service both online and locally. LOL :lol:

I really want to move so I can either buy a bigger garage or build one. N