Tag Archives: barndominium budget

How to Quit Your Job

How To Quit Your Job & Build Your Home Full Time

Hansen Pole Buildings’ DIY clients Kevin and Whitney Hart are today’s guest bloggers.

Hey everyone! My wife and I have been building our barndominium since about March and have been documenting the whole thing on social media. The most commonly asked question that we have gotten so far has been how we are able to afford to quit my career to build full time and I’m assuming there are some people here looking for ways that they might be able to do the same. Our method is really simple but requires a lot of hard work and persistence over what will probably be a longer period of time than most would hope for. It’s all about optimizing what you need with some clever ideas on how you can minimize your expenses and maximize your profit and time while you are saving. Hope this helps!

Here are the main points that allowed us to get where we are though the video will go into better detail. https://youtu.be/YoAnoQ9W3JY

1.) The Simple Equation: have more in the bank than you need for your project plus the income deficit of expenses and whatever income you have for the duration of your build + some buffer room. 

-if you don’t have enough you gotta change one or all of the above. What you’re building, where you’re building, when you’re building, or how you’re building it.

2.) The Prerequisite: Whitney and I think it’s absolutely necessary to get your finances locked down before you do anything else 

– Dave Ramsey’s Financial Peace University was the thing that really helped kick us down the road and we would highly recommend anyone to take that course regardless if you are wanting to build your house or not.

3.) Our Story: For us it took us about a decade to save up to the point where we are today where we could afford an adventure like this. However while we did want to get out of debt that whole time we only knew we wanted to build our own home in the last couple of years and it’s probably only been 4 or 5 years since I’ve started to do home improvement so I believe if your intentional about it you could probably do it a bit faster than we did.

4.) Minimizing Expenses: 

– Financing everything is extremely expensive. You will probably end up paying two to three times the price of your home over the duration of your mortgage so paying with cash will save you a bunch of money in the long run.

– going out to eat is super expensive so avoid doing that as much as you can.

– make sure you have a budget for food and additionally delicious and cheap meals to cook with them. There is a lot of info out there online (including our plan on our channel at some point in the future) on this topic so with a little bit of research I think you could find a solution that fits well for your family.

-living on your property pre-build is super cheap. Land taxes without any permanent home on them are quite cheap (at least in our area) so if you’re able to stay on your land while you build that will probably be the most economical way to live.

5.) Maximizing Income: 

– renovating an RV is something you can do before you move. You could either keep flipping them and selling for profit or you could rent your RV out during camping season for some additional profit.

– when your income increases don’t increase your standard of living along with it.

-monetize your free time (especially if you don’t have kids!) find a side hustle that is something a little different than you do for your 9-5 to keep things fresh. Super bonus points if it’s something that will allow you to acquire home improvement skills along the way.

– If you are renting you could potentially make trades with your landlord on small simple projects in exchange for a discount on rent.

-when you’re at work give it your all. Put yourself in a company where there is upward mobility and put in everything you got while you’re there. Love people, be passionate about your work as it will eventually lead to your dream coming sooner, get noticed and possibly promoted. If you have to be at your 9-5 for a while you might as well make it as profitable for you as possible and it will probably make it more enjoyable for you.

-If your job isn’t great or doesn’t have much potential maybe you should check out getting a trade job. They pay pretty well and you have the potential to save yourself from hiring professionals and will learn some needed skills along the way.

– our most successful endeavors have been our home flips. Choosing to buy and live in homes that need some TLC is super time efficient, gratifying, and can be quite lucrative. 

Those are the high notes. As mentioned the video goes into a bit more depth than I have time to type here but I hope this helps. Whitney and I are in no way financial advisors so you really need to do your own research and find out what’s right for you. Good Luck and I hope this is helpful to you all.

Things to Complete Before Going to a Barndominium Lender

Folks who are contemplating building a barndominium come in a variety of shapes and sizes, as well as financial positions. Some are at or near an end to their working careers and are downsizing, selling or have sold a long term family home and have equity to be used for their last home. Others are at an opposite end of life – young(er), working hard, have a few dollars squirreled away, but need assistance from a financial institution in order to put everything together.

Prior to delving deeper into this financial pond, I will give you my one most important piece of advice to successful barndominium financing (drum roll please)……

Do not EVER say, “I need a loan to build a barndominium”. (Barndominium can be replaced by shouse, pole barn (or post frame) home with equally bad results.

Should you choose to ignore this advice, it will result in eyes glazing over and most often hearing these dreaded words, “We do not do those types of loans”.

What you DO say is, “I need a loan to construct a fully engineered, custom designed, wood framed home with steel roofing and siding”. Period.

But won’t my lender send out engineers and inspectors who will “catch” me building a barndominium, shouse or post frame home?  No. Your lender will be concerned about progress, not how you are getting there.

Before going to a lender you will need a place to build (land), blueprints (floor plans and elevations) and a budget (or contract subject to finance approval with a builder).

Lenders for construction loans have to know a few things:

Your mortgage ceiling. No matter what you will not be approved for a construction loan higher than an amount you would be approved for a mortgage. Obviously this is because when construction is done this loan has to convert to a mortgage.

This is your top end budget.

Your lender needs to appraise both land and plans. Where you are going to build needs to be, at a minimum, under a purchase contract. It doesn’t matter if you owe on it, but it can’t be just “a place we’d like to get”. In addition they’ll need your blueprints with a fairly solid idea of finishes. These do NOT need to be structural drawings, but must include complete floor plans as well as elevation drawings.

You can get those floor plans and elevations done with a minimal investment here http://www.hansenpolebuildings.com/post-frame-floor-plans/?fbclid=IwAR2ta5IFSxrltv5eAyBVmg-JUsoPfy9hbWtP86svOTPfG1q5pGmfhA7yd5Q

They need this because they need to appraise your land and your future house. They need to put a value on it so they can give you a funding total.

Normally they’ll fund 80% of their appraised value.

Your builder contract (or your budget). This lets them know how much you NEED to borrow to pay off  land (if you owe on it) and build whatever was in your plans they appraised.

You can use this to help develop a budget: https://www.hansenpolebuildings.com/2019/07/how-much-will-my-barndominium-cost/

If your costs are below 80% of their appraised value you don’t need to pay them any money down. If it however is HIGHER than 80% of appraised value, you’ll need to put down money to cover this gap.

Basically no one can loan you money unless they have a very detailed idea of what you are going to build, how much you are approved for, and what it is going to cost. Pretty much every detailed aspect of budget, plan and approval need to be nicely put into a package and tied with a ribbon and a bow prior to heading to a lender.