Insurance for the un-insurable.

Fun fact. When you have a piece of a home that was used to make a bigger home, but at one point someone just had that piece of home insured it turns out to be sort of a cluster f**k of a situation when it comes to insurance.

While my situation is not normal; it is also not unheard of (thankfully). There is indeed insurance for the un-insurable. To get it you (in Texas) you have to find an agent that will write a Government insurance plan for the property.

This is of course like Government cheese in the sense that it is indeed cheese, but its not a Kraft single by any means. Government insurance is meant to cover only the most wicked of situations (think, fires, explosions, meteors etc.). Some of the common situations you might encounter as a home owner, like a tree falling on your house is not covered.

When I was told about the insurance, I was skeptical that this would be very affordable as I had already heard rates from $3,500 to $4,000 per year or more for a home costing less than $200k. That was of course before they just outright denied any coverage due to the house build / situation.

Turns out that Government insurance is not that bad. Certainly not as affordable as I could get if this was just classified as a single family home but closer to that $2,500 per year range (which is still more than $1,500 per year than I pay for my suburban home).

You have to be careful though as this insurance does not cover everything a normal policy would and should only be used for the worst of worst calamities. You can purchase some supplemental insurance that helps which I will also investigate but for now if you are in a situation where you are being turned down by multiple companies for insurance and are in Texas, find an agent that can write a government insurance policy. Your 100% guaranteed to be approved.

Financing Home Buying Status Updates

It’s back!

I have not been totally transparent on the number of things that have seemingly killed this deal only to have it spring back to life. Like a cat it must have nine lives and it has all but chewed through 8 of them at this point. After thinking it was dead and gone for certain last week and going as far as to have my realtor draw up the cancelation for the contract to get the earnest money back — once again the sellers and both realtors have come together to find another way to close this deal.

Its not that this avenue was not tried in the past — it just did not pan out very well in the past and was avoided due to a bad initial experience.

The biggest issue that has come up with buying this property is the type of home that it is or is not. See, when you look at the pictures without going inside you might think that this was just a normal pier and beam home. In fact even going in side you might not really tell sometehing was off right away, but it is there. In the front of the home it is basically a full width living room with vaulted ceilings and a fireplace. Going from the living room to the dining room you notice immediatley that those vaulted ceilings are now only about 6.5′. This was the first give away that this was not a normal pier and beam home, but none of the paperwork we had told us otherwise.

It eventually came out during the insurance (or even before then, I forget) when they found paperwork on a mobile home being the primary residence. This is of course in stark contrast to what you see when you get there. There is nothing mobile about this piece of property as it has been so heavily modified the only thing that remains is a small piece of the structures metal framing. The rest is all add on including the front living room, possibly one bath room and one bedroom, the carport and shop area, breezway and prorches. Now I am not saying you cannot finance a mobile home. There are tons of people that will finance mobile homes. But there are very few people who will finance a single wide mobile home. The ones that will charge an arm and a leg for the privilege. Mind you – that is only if you have a single wide.

If this were a double wide mobile home then everything would have been fine. Nobody was sure what it was any more. My personal belief was that it was modified so heavily that it was more of a regular single family home than any mobile home. My realtor though the same, as did the broker and pretty much everyone else that had been there. At worse we though it would be classified as a double wide mobile home which was still fine for financing and insurance purposes.

The person that determines what kind of structure the property is lies in the hands of the appraiser. I ended up paying for this to be done early – right after inspections so underwriting would not get hung up. We were all blown away when he came back and classified it as a single wide mobile home. I ended up calling to see what was up with that and he explained that it was industry standard. Once a structure has been classified as one thing, it is always that thing. So even if the previous owners built a hotel off of that, it would still be a single wide mobile home.

This is what killed the deal last time. Once it was classified as a mobile home it ruled out any investors from the broker that I was using, meaning getting a snazzy 2.50 – 2.65% rate was out of the window. That was it for me. I was done, I am already kind of numb by this entire rollercoaster to be honest. I asked my realtor to draw up the cancelation so I can start looking again. This sparked a fury of work behind the scenes (honestly this is where my realtor starts to earn that commission (aside from crawling under houses in full business attire).

I was presented with an offer from a Farm CoOp financing offer that was better than the one I had pursued when all this mess about the mobile home started (to make sure I had a backup plan if my broker fell though and meet the 1/31 contract deadline).

Originally when I checked into this option the rates were 5.85%, but being a co-op means you do get some money back at the end of the year. The amount was not explained, honestly I was so put off by 5.85% when 2.5 – 2.75% was the norm (and with my credit I qualify for easily). Why would I pay double, the money did not make any sense. The P&I payment at that rate is nearly 50% more cutting into my savings goals for moving to this lower cost housing.

Anyway the new rates were only .85% less (4.99%) but the co-op side of it was explained more. Average is 1.1% over the last 14 years with one year being 2.5% back. 4% is high given current rates (shit is is higher than what I have currently for the McMansion) but in the end it is about $80/month more than what I had planned on — for the property I can live with that. So we are back on.

This deal can still die (again) and I will not resuscitate it again — its too much for me. Also the owners are kind of fucked now for selling this property. It would take another person like me willing to jump through all these hoops and pay more to close it. I also understand that I will be in this same position when I go to sell it (if I sell it) but I do have plans to improve the property and get the value off of the primary house (by adding another regular modular home).

It should be clear if this deal is going to close in about 3 weeks once the CoOp does their appraisal – which is not necessarily based on the house but more on the land (probably should have explained that this is why this option works — its basically a farm loan).

Financing Status Updates

Its dead

Welp. Its is officially dead. After calling 6 local banks and two national manufactured home lenders it is as dead as a doornail. There was one local bank that was possibly on board, but I would need to toss another grand at it to have the honor of having a high mortgage rate. I also called two national mobile home mortgage companies and the rates started at nearly double the going rates (around 5.75%).

So there it is. Dead. A very expensive lesson learned. The search for some woods for this geek continues!

Status Updates

This dream is dying. I am crushed.

The financing for this dream has fallen though. The broker that I am working with does not have any investors that will finance a single wide (though this is certainly not a single wide). Finding easy financing for this deal has ended, but it is not over. I am still going to be calling local banks on Monday (as recommended by the appraiser) to see if they can finance this deal as they are more than likely used to seeing property like this in their local area. The problem with the smaller banks is that they are typically not going to be offering industry low rates, even with my amazing credit, down payment and income to support the deal.

Right now the options are to either take a agricultural loan at nearly 6%, or end the contract. I will still get my earnest money back, but I will have lost the price I paid for the inspections, appraisal and option fee (about $2,000).

Part of me is in – do what ever it takes to make this happen, you are not likely to find a setup like this again. The money side of me says — while you would still save about $400 a month moving out there, this is not what the plan was. The original deal was to take advantage of the cheap money that is out there and save $1,000 plus per month. At 6% the P&I is actually more expensive then where I currently live, the difference only comes into the taxes.

At this point I am willing to take a bit of a hit on the cost of the loan (and save a little less), willing to go up to 4% basically to make this happen. I would have never in a million years thought that I would be obsessing over this land the way I am. Everything about it feels right (other than the mildly terrifying part about moving into the woods and all that). I can see in my mind me living here for a long time, something I have never ever really done in any of the homes that I have owned. They always seemed like temporary investments I get to live in for a while before I move on.

Monday will be a calling frenzy. There are about 3 super local banks and 3 other banks I want to give a call. The plan is to just put it all out there on the table since my contract time only last to the end of the month. If it can happen I should know on Monday.

Networking Rural Internet Tech

How to get rural internet access in Texas.

Probably my biggest obstacle to tackle here in the woods is the task of internet access. As you can imagine there are not many options and at the moment it looks like it is going to be 4G wireless. There are several towers within 5 miles with both T-Mobile and Verizon access. No fixed wireless providers service this area, DSL may be an option but is still under investigation — I do not have high hopes. The previous owner had Huges satellite internet service, but it kept his kids glued to their screens so they turned it off to try and get them to go outside.

For the moment I have joined the Calyx Institute to get ahold of one of their unlimited 4G hot spots. I am uncertain if this will work off of the towers as the device I ordered will only work on post merger T-Mobile service, at worse I am out $150 for the first 4 months of service. If this works then I will pay out the rest of the membership and keep that going ($500/yr paid annually). While visiting the property for inspections and what not I did test with my Mint phone and was able to get about 6Mbit down and 0.5Mbit up with varying latency. These were just spot checks from the porch and just in front of the property. I will spend more time finding the best spot to lay that 4G hot spot.

Speaking of that 4G hot spot, it would not be a very geeky blog post if I didn’t at least go into some detail about how I plan on getting that to work. When you join Calyx you are given two options of devices you can order. Sadly neither of them have antenna connectors so you end up with either getting a device that can be tethered or a device that cannot be tethered. For my use a tethered device would be great since I can connect it directly to my router as a USB modem and use it that way. The non-tethering option could still work, but I would have to use the router to connect to it via WiFi as a bridge and then connect my other WiFi router to that to provide service to the rest of my devices. To be honest I am not sure why you would get the other device at all. You just have a better device all around by getting the tethering option.