Purchase and Remodel a home with only 3.5% cash out of your pocket

Today I attended a class on the FHA 203 K loan.  It has always been one of those things that sounds really good but is practically impossible to get done.   But I met a team of peeps all working together and getting the FHA 203k loans closed and people into their beautiful homes.

One of the challenges in todays market is that so many of the homes (foreclosures and short sales) are in poor condition.  Having items and issues that need repair in order to get a loan on the property; and with both short sale and foreclosure properties being “As Is” transactions, and no repairs being completed by the seller, getting a loan approved, funded and closed can be like pulling teeth without any Novocain.

In comes the FHA 203K team!

Together, a lender who will complete this type of loan; the home inspector, termite inspector, general contractor, HUD inspector, and a handful of other people that together know what is required, are working in unison to help people purchase these distressed properties, make the needed repairs and do some remodeling and updating at the same time.

How does it work?

The home buyer finds out what they will qualify to purchase.  Working backwards from there, if you qualify for 200,000 and you are going to put 20-35,000 into repairs and remodeling; look for homes priced around 160,000.  At the same time you have the home inspection, also bring in the general contractor and maybe the HUD inspector too.  Find out the cost for what is needed to be repaired and what you would like to have remodeled.  The cost of repairs and remodeling are rolled into the final loan amount. At closing the general contractor gets in the house and makes the repairs and remodeling, a few weeks later the home owner gets to move into their beautiful newly re-done home.

This takes an experienced team, a well oiled machine and fantastic communication.  I am glad to know the players! and to have been invited to join the team and help a few more buyers get into their dream home.

It is time for a talk about Air Conditioners and what you need to know!

It is time to think about your air conditioner, and not because summer is around the corner. There are new laws governing air conditioners. Freon systems (R22) can no longer be installed. This is due to the Clean Air Act of 1990. As of January 1, 2010 air conditioning systems that use Freon (R22) are no longer allowed to be manufactured. All new systems must be Puron (410A).

The challenge is the two cooling chemicals don’t work together. They are like oil and water; like putting regular gas in a diesel vehicle. It just won’t work. So if your compressor goes bad, you could have to replace the compressor and air handler! And that is a huge cost.

What does this mean to you? Well I had a chat with Tara Carter from Old Republic Home Protection and learned a few things. She said that there is no specific time frame for parts to be available. Depending on your AC unit, and what needs to be replaced on your unit, there could be a shortage of parts, starting right now. Parts could be found out of state, and across the country. So understand that repair times could be longer than desired. If a part is not available anywhere in the country, you will have to have the whole unit replaced. That could be a cost of 6 or 8 grand and up.

That is why if there was ever a good reason to have a home warranty, it would be now. A few things to check before you choose a Home Warranty company make sure they will cover the full replacement of your AC both the air handler and the compressor. (like Old Republic) If one or the other goes, both will have to be replaced.

If you have a newer unit, you may not need to worry. Be sure to get your unit serviced annually and keep it in good working order for as long as possible.

Remodel of office complete

Well 2 weeks solid of hard work and we have the new office fully remodeled. (not moved into fully yet)  We ripped out drywall, windows and sliding doors and now have a fully insualted!!! west room.   The deck outside was refinnished as well.

We are enjoying having the blinds open (with the low e window we don’t have to block the sun comming in all the time) and with the brightness of the room (painting over dark blue walls help too) we enjoy working and almost doing the taxes this weekend…

The new office

Adobe homes in the Southwest

St. Francis de Assisi Church in Rancho de Taos 


St. Francis de Assisi Church in Rancho de Taos


When people think of the Southwest and homes, many times they think of Adobe built homes.  I often get asked why all the homes are stucco and why there isn’t much adobe. 

I used to live in New Mexico, and know that real adobe homes are very labor intensive.  Mud bricks stacked together then more mud over the bricks to give the smooth texture we are familiar with. 

Super green, a great insulator, and the thicker the walls the stronger.  The St. Francis de Assisi Church in Rancho de Taos, well known for being photographed by Ansel Adams and painted by Georgia O’Keefe, has walls that are over 6 feet thick at the base.  The whole community comes together every year to re-mud the exterior.  The rain and snow make the natural dirt/clay walls soften and wash away.  Yes, the buildings last a long time, the church was built in 1815, and the Taos Pueblo is over 1000 years old.  Keeping up the mudding can keep the adobe standing indefinitely.

Meanwhile, stucco lasts a lifetime (not sure how many years that is) but with a fresh coat of paint every now and again, the work to maintain it is much less.

I love the look and feel of the real adobe homes, and I have been in many while living in Taos and Santa Fe.  They are a bit challenging to hang a picture on, when remodeling, taking down walls is not an option, making the stucco homes of Arizona much more practical.

Remodel – tear out complete

The first day of our construction/remodel in our town home in McCormick Ranch.  As suspected there was very little and in fact some areas had no insulation in the west wall.  No wonder the room was so hot in the summer and cold in the winter.  Adding insulation alone will make a huge difference in the comfort of this room.   

Look - no insulation!

We made great progress, the carpeting is out, all the carpet tacks, dry wall, the limited amount of insulation, the room is clean and we are prepped for tomorrow and putting in the Low E windows

Remodeling in McCormick Ranch

All of this talk of construction methods comes from me as I am remodeling my second bedroom in my McCormick Ranch town home.  This room is the west room, upstairs above the garage; so no chance of planting a tree and getting a spot of shade on that wall. 

The room has been HOT in the summer and COLD in the winter.  It boasts a single pane glass window and single pane glass sliding door, and an assumption on our part that the insulation was missing in the walls.

Our plan, remove the wall board, replace the windows with Low-E,  and replace the sliding door with a dual pane French door, and insulate the walls to the max!

Here goes our transformation!

The Basement Phenomena

Basements are rare in Arizona.  You would think that since the earth is cool, that basements would be popular and a pleasure in the summer months. 

Let’s first give some thought to basement construction.  In the great white north, you have to dig down a few feet to get below the freeze line where the water and sewer lines are located, then dig a bit further for footers, then have a few steps up to the front door so there is room for snow to pile up…

Getting the picture?

Our freeze line is only inches below the surface, builders don’t have to go far (18 inches) to hook up water and sewer.  The front door is also at ground level.  Meaning if a builder is going to dig down for a basement, they are doing some serious digging.  Our ground can be a bit on the hard side, making digging a bit of a challenge.

When builders do build a basement home, the basement is rarely the same footprint or square footage of the rest of the home.  The newer communities offering basements have them fully finished, used as game rooms, spare bedrooms, and they even have a bathroom complete with sump pump.

Arizona Construction or “How we do it here”


Arizona Home under construction

Arizona Home under construction

There are different construction standards across the US.  What consists of a standard in one area would be a poor choice in another.


An example:  In the north, the front door of your home opens inward.  This is building code.  The reason is a safety standard.  Just a small amount of snow would block the door trapping people in the home with no way out.  Head down to Florida, and building code has the door opening outward.  Again this is for safety.  Florida and other coastal cities in the south get hit with some mighty big storms and wind (hurricanes).  Having the front door open outward secures the home and keeps the door from blowing in during a storm. 

Arizona construction fits Arizona.  Over the next few posts I am going to explore some of the differences in “How we do it here”.

A/C problems, possible quick fix

As if not getting much sleep with a new puppy was enough of a challenge, this past week our upstairs air conditioning unit stopped working as well.  No big challenge we thought, since we still have cool air downstairs, we will just sleep on the floor and the couch.  Wow, talk about no sleep.   We got the air conditioning repair folks out there first thing the next morning.

Our unit would blow air with the fan, but it was not turning on the compressor to cool, or even to heat.  The repair company came out, walked up to the thermostat popped the cover off, and as I looked on to my amazement, there were batteries in the thermostat, and we had never changed them.  Didn’t even know they were there.

Long and short of it, those were some pricey AA batteries.  So before calling your A/C repair folks, replace the batteries in your thermostat.  And get a great night sleep.

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Artesia a New community next to McCormick Ranch

As you gaze across Camelback Lake from the McCormick Ranch Golf Club you see a strange site in this area.  You see new construction.  Starpointe’s new community Artesia is not in McCormick Ranch, but is just next door and so I am including it in the area communities.

The community located off Scottsdale Rd just north of Indian Bend Rd is in a great location, with restaurants (including the soon to open Roka Akor) and shopping walking distance from the homes.  The community will have a fitness center, yoga and aerobics room, massage rooms, lap pool, spa, clubhouse with theater, event/ game rooms, state of the art golf simulator, pet spa and much more.  The community besides being on the golf course will also have 10 acres of private park area, four miles of walking paths, and water gardens.

In Artesia there are two styles of buildings.  The first has what they are calling Residences, single level condos, starting from $354,900 for a one bedroom unit, on the first thru third floors, and two bedroom units starting from $434,900.  On the fourth floor they have the Penthouse with 2260 sqft, and 1211 sqft of private wrap around deck, I am sure the views will be stunning.  The pricing is $1,199,900 for the penthouses.

The second style is the Brownstone collection, three story units starting at 2907 sqft with private garages, and  views of the Pines course at McCormick Ranch.  The prices start from $1,064,900.

If you are looking to be close to everything Scottsdale has to offer, and looking for new properties in an urban setting, Artesia may be right for you.