They’ve started on the footings up on the mountain. Almost 2 months after our loan closed the first dirt is dug. That is very frustrating, it took forever. It had been so long and our job was so stale that everything had to be revisited, none of the bids were current for anything. People gave up hope we’d ever get funded. So firing that all back up took time, and that is really unfortunate, because after delaying a year, another 2 months is like a dagger. I want to be living there already. My original plan, way back was to have the castle done and finished by August of 2015, back when I started this process in, I don’t know, 2010 or 2011, I thought it was doable. We may have the 3rd floor framing done by then, maybe.

So, at least now they’re starting the footings. What are footings? Well, they’re the feet of your building. You always dig down into the earth a ways (how far depends on a lot of factors, including your climate) to put in your footings. You put in steel, or a lot of steel as in my case, and pour concrete into these trenches. Then you have a firm level base on which to build your walls. I’m told this will take a couple weeks, then we’ll put up our pool patio basement walls, then the ICF main house basement walls, they will start on the 1st floor in June, then maybe 2nd floor in July, 3rd floor in August. Maybe we’ll get closed in then by Halloween.

So I guess the loan is real, I have the paperwork, signed, sealed, delivered, no backing out now. I guess I can safely talk about it without jinxing anything.

I thought, all along, that I would provide a litany of the banks that said no, but we’d be here all day. Pretty much, you can assume that if the bank exists, at some point they said no to me. I probably spoke with 30 banks all told. Some told me no straight off the bat, they either didn’t do construction loans, or didn’t want to do one this large. Others lead me on for awhile before saying no, some loan officers tried really hard but ultimately could not get the approval.

A few of them said they would loan me the money, but only if I deposited a nearly equal amount with them first. Some said they could do it, but at half the required amount. Many blamed federal regulations making it too hard for them to do it. Many told me the problem was the appraisals, our appraisals were high enough, but they were nonconforming to regulations because our comparables were too old and too far away. It has to be sometime like sales within 90 days within a mile – so good luck if you’re out in the country. There are many places where you’d never find 3 homes that have sold in the last 90 days similar to yours within a mile of yours. Then of course, many simply thought that if I was building a McMansion it would be okay, but they worried that, even with my 50% down payment, they would take a loss on it in the (inconceivable) event of a foreclosure, because, who wants to live in a castle? I mean, yuck, right?

Ultimately I actually used some website, because I thought, what could it hurt? To get “multiple loan offers” blah blah, I’m sure you’ve seen the ads for sites like it. Through this site a mortgage broker out of Florida contacted me. He said he thought he could get me a loan, he worked on commission, 2% of the loan. That is pretty steep, but I didn’t have a lot of options. So I said okay. I was still free to keep looking for banks, but if I went with one he referred I’d owe him 2%. Ultimately, he got me back in with two banks that had told me no before already, Sun Trust and BB&T. Sun Trust sort of dragged their feet and while their initial offer was really nice, it was hard to work with them and they didn’t respond very quickly, and we’re already about 9 months late on starting. BB&T worked steadily through the underwriting and ultimately approved the loan and I went with them. I got a $2 million construction loan that converts to a permanent 30 year mortgage on completion. The rate floats within a range for now, Sun Trust was going to lock a rate in the low 3s which I would have preferred, but like I said, they were taking awhile and their approval was not guaranteed. So now I owe the mortgage broker $40,000.

What? I mean seriously, I want to be angry at him, $40,000 for a phone call and an email? Nice work if you can get it. Just for “selling the sizzle not the steak” as he said. But I can’t be angry at him, all he did was exactly what he said he would do, and I agreed to it, and ultimately without him I would not have this loan. So I can’t be angry at him, and as much as I’m going to dislike writing that check, that is his money. I can be angry at the banking system overall for forcing me to use him. I should be an ideal borrower, wealthy, well employed, large down payment, excellent credit, and our banking system was hard for me to use. No wonder the middle class is still hurting. Our government has this habit of gross overreaction. So we had a banking crisis largely caused by poor regulation, and the solution is more poor regulation swinging the pendulum too far in the other direction. When what we needed was not more regulation, merely smarter regulation. So now, instead of being too easy to get a loan, it is too hard. One option presented to me was to put my home into an LLC and then I could have gotten a commercial loan on it because the regulations were more lax for those so they could get it done.

So BB&T is the winner, but even then it wasn’t a perfect situation. They had to charge a slightly higher interest rate because the loan wasn’t going to be underwritable enough to market it as a security or ever sell it. So BB&T was going to have to keep it in-house no matter what.

So now, I think, I can take the banking stress out of my life, and instead replace it with building stress.

I had to just add some stuff up to help some bids get put in, and I thought I would share.

The castle has a total of 10147 square feet conditioned above grade that you can stand on. I phrase it like that because we have some double height ceilings and some people count that as double square footage, but you can’t stand on air, so I don’t. Additionally there are 2632 partially finished partially conditioned basement square feet, 1035 unconditioned basement square feet. Then there is an attached unfinished unconditioned bare concrete floor/wall/ceiling patio basement (an artifact of the bedrock, slope, and position of the house) essentially a parking garage, that is 3544 square feet.

We will have 9 bathrooms. It seems like a lot, what governed our decisions on bathroom placement was making sure one was accessible without you having to walk halfway across the house or up or down a stair. You have to plan for things like the pool, do you want people to have to walk, dripping wet, across the house to use the bathroom or do you add one near the door to the pool? Many of these bathrooms are just half baths though. There will be 8 bedrooms, though not all of them will be used as such.

There will be a total of ~179 light fixtures, including things like fans and garage door openers. The kitchen is 314 square feet, which is just 3% of the conditioned total, and even less of the gross total.

Our total acreage is 20, and most of that is wooded forest.

After dealing with banks for a solid year, I’m happy to announce I finally have a loan. We could close as early as Friday, construction will start soon, I’m really happy, though now that it is finally real I am also a little anxious. In the time that has passed there has been some material inflation but I hope it isn’t too bad. I’ll post more details after we close, I don’t want to jinx anything.

I visited last weekend to do some business related things and took some more pictures of the lot. This was after some of the final grading was done and some rocks were moved around. It was also right after what Chattanooga called Snowmageddon, but as I’m from Michigan I found that adorable. The whole property was covered with snow on Friday and Saturday, but gone by Sunday.

Then I thought I would include this picture, what I call the best undeveloped view of Chattanooga. This is the lower 5 acres of my property, you can’t even get the entire view in the picture, if I had panned to the left you’d see more of downtown as far as Veterans Bridge, so essentially it is an unobstructed view of everything between Veterans Bridge to Lookout Mountain, and as low as Moccasin Bend. I’ll sell it one day or put cabins on it or something, I prefered the larger building site up higher for my own build as I like land and gardens, this is more of a brow spot, but it sure is a nice view.

I’ve really been wanting to use a local bank for the build because I think they understand the Chattanooga market better than a national bank and I think they would be easier to work with and have a better grip on what I’m trying to do.

I’ve been told by two banks that if I was building a boring plain McMansion it wouldn’t be a problem, I’ve been told repeatedly my numbers are good, my downpayment is good (I’m putting nearly 50% down if you can believe that), credit good, income good, castle… not good. They don’t understand the castle, they don’t want to finance the castle. Why don’t I just build a generic house, it wouldn’t be a problem?

They worry that, apparently, in the event of a foreclosure (again, remember, my numbers are all excellent) they won’t be able to sell the castle because…wait for it… no one wants to live in a castle. Please. If you’d like to live in a castle, go ahead and comment on this post. But whats more, they worry that people would hate living in castles so much, that they would despise it to such a high degree that they will be forced to liquidate the property for more than a 51% discount (remember, I’m putting 50% down) creating a loss for the bank. So even if your dream isn’t to live in a castle, go ahead and comment if you would “accept” a castle at the same price of an equivalent square footage McMansion. I mean, if you had to choose between two houses with the same size/amenities, and one was a McMansion, and one was a castle, which would you choose?

The first bank, recommended by the architects, the loan officer was all gun ho, and I thought it was a sure thing, I was told it was a sure thing, at the very last minute they pulled the plug because the management at the bank rejected it at the final stage of the process. This caused delays, we wanted to start building last Spring, all this summer has been finding other banks.

Of course, as I’m contacting other banks, the first thing I say is, its a castle, are you sure thats okay? The plans and those nice 3D renderings have been done for awhile, so it isn’t as if they can’t look and see exactly what I mean. Another bank, recommended by someone else, said okay, and I’ve been working with them… and then just now they pull the plug. They said the article made them realize it was more castle-y than they thought. But seriously, they’ve had the plans for months, and it was the very first thing I asked them.

I don’t blame the loan officers at either bank, they were on my side, the first one even said he would loan me the money personally (if he had it), I blame their bosses, the people making the final decisions. Our whole banking system is a mess because of the recession and Washington and everything else. I’m incredibly successful, I have a credit score near 800, I’m putting 50% down, and I still can’t get a loan.

It is incredibly frustrating to me to be told “Hey, great income, great credit, great downpayment, but sorry, we can’t lend to you because my boss doesn’t understand why you want a house that looks like a castle.”

Do you know what banks are supposed to do when they have no idea how much a house is worth? Get an appraisal, duh. So I paid, out of my pocket, $3000 for two appraisals (it has to be two, because of the size of the loan). Guess what? According to the appraisers, these being the people whose job it is to figure out how much houses will sell for, my castle would do perfectly fine on the real estate market, better than fine. I’m still sitting pretty with a loan to value of near 50%. But even then, the bankers say no, despite having the appraisal in front of them telling them what they could sell the house for, they say no.

I tried other local banks too, many told me know right off the bat, it was just too big of a project for them to handle. All is not lost, I have one more bank, the most likely bank, they did another high end vaguely castle-like home recently, still working the loan. We hope to close on that in 3-4 weeks. Since the first bank bailed on me I learned not to put all my eggs in one basket, but now that another bank bailed I have just the one egg left, and that makes me nervous, and stressed, and angry.

So maybe I can turn that article in the newspaper into something beneficial, since the cat is out of the bag and apparently everyone in town now knows about my house, if anyone is a banker or knows a banker in the Chattanooga area who might be interested in this project, please, let me know. I’ve had the rug pulled out from under me too many times not to be intensely worried about that one wee egg left in my basket. Of course, everyone please comment if you’d like to live in a castle so I can have a sort of moral victory over those stuffy bankers, and if anyone is looking for a bank recommendation, I’ll post giving them my whole hearted recommendation.

Originally, with this blog, I was hoping it to be anonymous, I didn’t think of building plans being public record, a journalist seeing ours, Googling my name, and voila. But now the cat is out of the bag, and everyone in town, apparently, knows what I’m doing. So, let me put that to use. In addition to me wanting a backup bank, just in case, we still haven’t picked many of the trades who will be working on the house. If you think you have something to offer please let me know. I will be continuing to blog about construction, and apparently, there will be media interest, so it could be good promotion for you as well if you’re chosen. Also, my wife still is looking for a job, she is a child psychiatrist and they’re so rare they’re basically in demand everywhere, she has interviewed at different hospitals or healthcare providers down in town, but hasn’t signed a contract anywhere yet. If you know someone who might need a doctor with her training, we’ll certainly take the referral. Erlanger specifically we’ve never heard from, through I hear through the grapevine they need someone like her. Oh and hey, I guess, since HGTV is just up in Knoxville, since this is no longer a secret I guess it can really not be a secret if anyone knows anyone who works up at the network.

For almost a month now they’ve been digging on my mountain.

I think I mentioned before, but I’ll mention again, what you pay for your land is not the only thing to consider when choosing your land. Assuming you’re not building in a graded flat subdivision you’re going to have costs associated with putting your land into a buildable condition. In my case I bought the high point of the ridge and it needed to be brought down to where I could have roughly 80×120′ of flat area for the footings, patios, parking, etc. The driveway and front turnaround drive also had to be built up and leveled, a septic field built, etc.

I had looked at one lot that was cheaper than this, and way way way worse than this besides, but also it likely would have had 250k+ of excavation costs, making it, in the end, not cheaper. Additionally I toured a house under construction nearby where I was told they had a million dollars in site prep. They took a lot that was hardly flat at all, the peak of a little foothill that was all rock, and had to blast it apart (literally) to create a level surface (and a large one). Though they got tons of “free” rock to landscape with.

My lot is great by comparison. It was a high point, but not so steep or severe, and mostly soil, very little rock. Around 2 feet from subgrade we did reach a really compacted layer of almost-sandstone. Not quite rock, but not quite soil anymore. That has slowed us down and cost more money. All told it is looking like site prep costs of around $100k, if you include the tree clearing. Cheaper than other options, but still quite expensive. Of course, that isn’t the end of the earth costs, on the backend things will need to be put back into order, the foundation backfilled, the lot graded with soil, etc. Plus this isn’t including the long driveway, which I categorize under concrete, but which could also have been less (or more) with a different lot.

Excavation on our property was done by Joe Palmer of McKinnley Excavating.